Thread by @Ms_ZamaNdlovu

Youth unemployment is 100% a structural issue, however, graduates not being taught entrepreneurship is not the problem. That narrative adds to the overall pitch that young people must solve a problem they didn’t create.

I’m going try explain something that I’ve been trying to understand for three years. Bear with me if it’s confusing.

We are all taught that the banking sector’s role in society is to coordinate excess funds with demand for funds, largely for commerce or ‘the real economy’.

But actually, since about the late 1970s, deregulation changed this. The simplest explanation is that deregulation allowed different forms of financing, putting banks under pressure and making them look for alternative markets for profit else where —-> individuals.

This is financialisation. You see banking changing, you see the creation of the financial sector as a stand-alone sector whose profits are not driven by the real economy (I.e lending money to Jabu Lorch to start a business). Instead, you see banks building consumer products.

BUT! Before the 1970s, western governments were largely welfare focused, they tried to build a social floor - free housing, free education, some kind of grant for those living below poverty. THIS DID NOT WORK FOR BANKS! So what happens from the late 1970s?

A new theory of change starts to emerge in government policy: the ownership model of development. More and more Govs start selling the public the idea that they should be owners. Own your house, save to invest in your education. Make your own retirement decisions.

So Western governments like the US, start offering first cheap but no longer cheap finance for education, instead of free education. There’s less and less focus on building public housing, healthcare is not free, but you get insurance for it. Who do you think benefits? Banking.

Here’s what we need to understand, by the time 1994 hits and SA is exposed to global policy developments, the public policy model is to financialise and individualize social policy, encouraging people to: BUILD THEIR OWN ASSETS TO GET OUT OF POVERTY (imagine!).

So new SA, who dis! Our policies also follow this global public policy development: Enter Tefsa, now NSFAS, enter giving medical aid to all public servants instead of free public healthcare, enter only building social housing for the most poor (compare with Singapore & Malaysia)

Now you wonder what this has to do with youth unemployment. Everything. A banking sector that can grow at much higher rates than the real economy is not incentivized to invest in the real economy. This is a global phenomenon. In some Countries, household debt has exploded while

while real income has remained benign.

Here’s the thing, if there’s limited investment in the real economy you can’t create jobs. So basically our consumption-based economy is driven largely by consumer debt and not by the entry of new wages into the market.

That is what we mean by structure, so please tell me how teaching young people entrepreneurship is going to circumvent such entrenched interests?

And this is why I problematise the concept of financial inclusion in my research. Financial exclusion was first conceptualised in 1993 by Andrew Leyton and Nigel Thrift, academic geographers who wrote about how banks were using CRM tools to ignore geographically distant customers

Very soon the World Bank started taking over the conversation about inclusion, making it about usage and access to financial services. Amyway, I’ll do that thread another day. My only point is this: financial inclusion has been coopted as a means of including more people in a +

Sector where success is based on access to financial resources (usually generational wealth) and other attributes that poor people don’t have.

But more directly, if you look at all financial crashes since the late 80s, they are all preceded by some form of financial inclusion narrative.

But to build this case I’ll need 15 tweets so I’ll save it for when schools open ❤️