Johan Fourie's blog

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Posts Tagged ‘Stellenbosch

The stories we do not tell

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One of my favourite scenes in Love, Actually is right at the beginning of the movie. The setting is an airport arrivals terminal. As travelers arrive through the gates, they are welcomed by family and friends, smiling, laughing, hugging and kissing. Whenever I have to pick someone up at the international terminal, I do my best to arrive early, and to witness the joy of family and friend reunions.

I would contest that there is another setting where you’re guaranteed to be uplifted. Graduation ceremonies. I was fortunate to attend one of these at the end of March where hundreds of students received their degrees, with thousands of friends and family watching on. Each applause and ululation tells a story, stories often coupled with hardship, sacrifice and perseverance but also with hope, faith and, ultimately, success. There are few things better to see than a father or mother, proud and captivated as their son or daughter walks across the stage, holding back the tears.

Several of my own Economics students graduated too, each with their own stories. Thokozire Gausi graduated with an Honours degree. She is from Malawi and part of a network of students that self-finance their studies in South Africa, often with very little institutional support. Masters-degree graduate Omphile Ramela, who grew up in Soweto, wrote his dissertation while playing professional cricket for the Cape Cobras and, now, the Highveld Lions, and while balancing the demands of a young family. Abel Gwaindepi received his PhD in Economics. He grew up in Zimbabwe, where his father worked in the sugarcane plantations of Anglo-American. Abel has 16 siblings, many of whom he had to support with his meagre scholarships through an undergrad at Fort Hare, a postgraduate at Rhodes and, ultimately, a PhD at Stellenbosch. It is difficult to imagine what that moment of graduation must have felt like for Abel and the Gwaindepi family.

At the same ceremony, both Patrice Motsepe and Jannie Mouton received honorary doctorates, and had the chance to say a few short words. Motsepe noted South Africa’s amazing people, and our duty to ensure that each has the opportunity to live a life of dignity and prosperity. We underestimate our own abilities, Motsepe said, to make a success of South Africa. Mouton highlighted the wealth of opportunities in the country. Focus, he said, on the opportunities instead of being an expert on the problems. ‘Build a business, employ people, pay taxes – contribute.’

Negativity pervades our society, and can be incredibly debilitating. A few minutes on Twitter and you’re bound to find discussions that turn into slurs and slanders which will only end in ignorance and intolerance. But – and this I repeat to myself and my students frequently – Twitter is not the real world. Despite all the negativity that surrounds us, there is one undeniable truth: there has never been a better time to be human than in 2018.

The story we do not tell often enough – and one that still surprises each new cohort of students I teach – is that life is getting better. Yes, we have tremendous challenges in South Africa, in Africa and globally, but we are making good progress to tackling these head-on. Six of the ten fastest growing economies in 2018 will be in Africa. But it is not only incomes that are improving. Steven Pinker, in the first few chapters of his new book, Enlightenment Now, provides a wonderful summary of the trends in health, happiness, and living standards, as well as inequality, the environment, safety and democracy. In each case, the evidence suggests that we live in a much better world than our parents and grandparents.

This good story did not just happen for no reason. It is humankind’s ability to use the resources of nature and transform them into food, clothing and shelter, through ever-increasing understanding of science, our complex technologies and sophisticated institutions, that have allowed us to build a more prosperous world. I really like the way Pinker explains this:

Poverty needs no explanation. In a world governed by entropy and evolution, it is the default state of humankind. Matter does not arrange itself into shelter or clothing, and living things do everything they can to avoid becoming our food. As Adam Smith pointed out, what needs to be explained is wealth. Yet even today, when few people believe that accidents or diseases have perpetrators, discussions of poverty consist mostly of arguments about whom to blame for it.

That our world is getting better should not mean that we can get complacent. As we’ve seen in several countries around the world, places like Syria, Venezuela and Zimbabwe, when things fall apart, living standards quickly revert back to poverty and chaos. As long as we understand that investment in better knowledge about how the world works lies at the heart of our story – in other words, investing in innovation, science and technology – such an outcome is unlikely for South Africa. The worrying thing about our recent budget is that the allocation towards this category will grow at less than the inflation rate. Our politicians seem to not understand that our wealth is dependent not on connections, mineral resources or land. Instead, it is the result of innovation-led improvements in productivity that explains the huge progress of the last two centuries.

Motsepe and Mouton are both correct: we have amazing people and amazing opportunities. But we will only be able to tell a good story if we invest in those amazing people – like Thoko, Omphile and Abel – to use their knowledge and skills to take advantage of those opportunities.

*An edited version of this article originally appeared in the 12 April edition of finweek.


Onwards and upwards

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I turn 35 today. I’ve heard a theory that increments of seven are momentous birthdays. I can see that. 14. 21. 28. And now, 35. I don’t feel much older, except for the fact that my body still hurts after Saturday’s half-marathon. Recovery just takes a little longer.

It has been a busy month, as the low frequency of my blog posts will illustrate. LEAP hosted the 7th African Economic History Network meetings, from 25 to 27 October, with more than 80 participants. The LEAP page on Facebook has all the photos from the conference. Emmanuel Akyeampong delivered the second LEAP Lecture (which should be available as a working paper soon) to start the conference, and Trudi Makhaya the final keynote. As I noted in my welcoming address, the remarkable thing about the AEH network is the young average age of participants. I also thought the quality of the presentations were excellent: an increase not only of the quantity but also the quality of research.

LEAP hosted another workshop on Monday and Tuesday. The workshop, sponsored by Utrecht University’s Centre for Global Economic History, was on ‘Time preference and time horizon’. I delivered the final keynote. My argument was that, just as our future orientation affects our current decisions, so do our perspectives on the past. We live in the Age of Nostalgia, as some recent scholars have argued, constructing an often romanticized version of history, and such (biased) views can have political and economic consequences. Think Trump and Brexit.

Welcoming people to Stellenbosch is always nice. I enjoyed many fruitful discussions over good wine with great friends. Now, though, it is time for a return to research before I accompany a group of Stellenbosch students on our annual trip to Leuven – more on that later – and then present at Utrecht, Gothenberg, Lund and Bologna.

It’s raining in Stellenbosch; a surprising, unexpected rain. That can only be a good sign of things to come.

Written by Johan Fourie

November 9, 2017 at 07:40

It’s five years!

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Five years ago, on a warm January day, I started a blog. I tend to forget detail easily, but I somehow vividly remember sitting at my desk, squeezed into a bedroom that was also a living room and home office space, and watching a hawk land on the small balcony. They say you have to write about what you see, so that is how I started my first post.

It’s five years later. Life is different. Helanya and I have moved twice since that day. We’ve travelled. I’ve graduated my first (soon to be two) student(s). But we’ve been fortunate, too, in that many things have not changed at all. We’ve attended many baby showers and few funerals. We’ve gained wonderful new friends through travelling. My students keep on inspiring me. And my colleagues and co-authors continue to have too much patience.

My blog has remained, too, although a long-time reader would recognise some change. As with most new things, I was productive initially, writing 10 posts in my first month. I soon realised I couldn’t keep up the pace, and the frequency declined to average between four and six posts. I blogged about many things that interested me, but Economics-related topics seemed to take precedence.

At the beginning of last year, I was offered a contract to write a bi-weekly column for Finweek magazine. Due to time and (more importantly) idea constraints, I began to post my columns as posts instead of writing altogether new posts. The result has been that the length of my posts has increased, but that the frequency has declined. It also means that the average number of visitors per day has declined somewhat. I would like to think that there is a quality-quantity trade-off, though. There is some evidence to support this claim: the number of permanently registered readers has continued to increase.

It’s strange to reread some of the posts that I wrote several years ago. They are recognisably me, but they are also different from how I would write about the same topic now. I guess that means that I’m learning. Or unlearning.

Or just growing older.

Blogging is a difficult business these days. What I had hoped to do when I started was to debate, to challenge, to offer a different, sometimes unpopular, perspective. But I have become less eager to do this, probably because I have lost some of my youthful big-eyed optimism, but mostly because of the uncritical social media platforms that now dominate public debate.


I would like to think the blog has had some impact, though. My 258 (this will the the 259th) posts have attracted 295 659 visitors to my site, who’ve read my posts 417 095 times. That is an unfathomable number, and much more than I could have hoped for. The large number is largely the result of one post I wrote – Why and what to study in South Africa – which I wrote in May 2013 and has since received more than 156 000 views. It also has 251 comments. The most views in one day actually come from a book review about Ken Follett’s Century trilogy. He retweeted the blog post, and I was swamped by visitors. Most of them were there for the images of the characters, which I had borrowed from someone else (with due credit, fortunately.) My favourite post? There are many that I like (of course), but I think the one that stands out is my response to Zuma’s remarks at the beginning of 2015.


This morning the Stellenbosch heavens finally opened up for some much-needed rain. I hear doves cooing, playing in the temporary ponds in our new flower bed. Perhaps they are descendants of the chicks that hatched five summers ago… (but then this will likely be the third or even fourth generation, as Google tells me that doves only have a 1.5-year lifespan in the wild.) It’s the start of a new year, a time when we tend to look to the future. And I wonder: Where will we be in another five years’ time?

Written by Johan Fourie

January 27, 2017 at 10:28

Again: What to study in South Africa

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Big shots: Joseph Stiglitz, Jeffrey Sachs and Edward Glaeser, amongst others, were at the ASSA meetings in San Francisco

Big shots: Joseph Stiglitz, Jeffrey Sachs and Edward Glaeser, amongst others, were at the ASSA meetings in San Francisco

My most popular post on this blog – by far! – remains the Why and what to study in South Africa entry I wrote in May 2013. My advice was pretty simple: if you can do math, study a degree where you will develop your math skills further. Math and statistics, combined with economics, computer science and/or engineering sciences, will make you an incredibly desirable employee: both in South Africa and abroad.

I was reminded of this advice when I attended the world’s largest gathering of economists last week in San Francisco. The ASSA meetings spanned three days, had more than 500 sessions with more than 12 000 participants. I presented a paper with Dieter von Fintel (on persistence and reversal of fortune) in a session on apartheid – with excellent papers by Johannes Norling (on fertility), Dan de Kadt and Melissa Sands (on voting), and Martine Mariotti and Taryn Dinkelman (on remittances and migration). And there were many other excellent sessions: notable ones I attended was a session on long-run inequality (with a very entertaining Philippe Aghion), a session on writing books (see photo), and a session on early childhood development (where Melissa Kearney presented a paper I reported on here).

But what reminded me about my math advice was a discussion during one session about the need to diversify academia. One commentator mentioned that the reason for the slow diversification of economics faculty is the high level of mathematics required to do a PhD in Economics in the US. (The slow transformation was quite apparent at the conference: the vast majority of attendees were white males.) Much like in South Africa, black students in the US would often opt out of math courses because of poor grades or a bad experience at school. They are thus more likely to end up in the humanities and less likely to study more ‘mathy’ degrees, like economics.

Yet, there is an increasing realisation that the current state of affairs – the white, male bias – is neither fair nor sustainable. Harvard’s chair of the Economics department, David Laibson, confirmed this: he was quite explicit that Harvard will focus on hiring more diverse staff during his tenure. This is likely to increase the demand for female and black economists (and engineers, scientists, actuaries, statisticians) significantly in the foreseeable future. But to suspect that the market will automatically adjust – that the higher demand will induce more black students to study economics – is unlikely. That is why there are several programmes in the US to inform high school students of the possibilities that economics can offer, showing them the wide applicability of economics in their daily lives. (Economists, for example, study how Discovery Vitality can get their members to live healthier lives, they study how to make things like Uber and Airbnb more efficient, they study what’s wrong with the school system and how to improve it, they study how firms compete and grow, they study the minimum wage and its impact and, yes, they also study financial markets and the banking system. Just watch this video).

Economics departments in South Africa are certainly not doing enough to promote the field to young scholars. Prospective students have a very narrow view of what an economist does, if they have a view at all. I know I never thought much about Economics before I arrived in my Economics 1 class. But the truth is that there is a massive demand for good economists, both in South Africa and, as I witnessed for myself in San Francisco, abroad. South Africa’s services industry needs far more graduates with strong mathematical or statistical backgrounds; the industries of the future will require the analyses and interpretation of (big) data, skills for which economists are well-equipped.

So, what should you study? This is an incredibly tough decision to make at a young age, and it almost certainly will have a big impact on the quality of your life. But here goes: if you have the ability, you can narrow the risk that your choice will turn out to be a bad one by developing your math and stats capabilities. And if you really want to enjoy what you’re doing (yes, I’m biased), combine it with Economics.

Written by Johan Fourie

January 13, 2016 at 19:00

Piketty in South Africa

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After missing his flight and his much-anticipated Cape Town lecture, Thomas Piketty, the French economist who published the widely-acclaimed and best-selling Capital in the Twenty-First Century last year, arrived in South Africa to deliver a lecture at Wits University yesterday. And he did not disappoint, calling for higher minimum wages, land redistribution and, echoing his call in Capital, a wealth tax. But his most stinging critique he reserved, it seems, for economists: “No such science as economics”, one conference attendee tweeted Piketty, “everyone can have an opinion. Applause from room full of social scientists & historians”.

I can understand the frustration with economists. They write in a language few other social scientists understand. They tend to support a system of wealth creation that is not very hipster. And Piketty is right: For a while in the previous century economists may have believed that economics is a science on par with physics, and that the economy can be manipulated much like a giant computer. But for the most part, economists have now realised (and incorporated into our models) the knowledge that people are not always rational agents, and that they make decisions within social settings where context and institutions matter as much as incentives. Witness the rise of behavioural economics and the renaissance of economic history.

Yet bashing economics is a favourite past-time of social scientists in South Africa. At the recent South Africa Historical Society conference in Stellenbosch, a historian and one of the organisers of yesterday’s Piketty event suggested to a room full of his colleagues and students that instead of studying economics, historians should just read more. I agree that we all should read more, but why deride economics in the process?

It is difficult to not attribute such ridicule from social scientists and historians to a fear of numbers. Because what economists – and certainly most South African economists – do, is measure. We measure the increase in prices in order to determine the most appropriate level for the interest rate. We measure the quality of schools to ascertain why kids drop out too early, or why many of our high-school graduates struggle to find jobs. We measure the international trade of goods and services to understand competitiveness and adjust tariffs. And yes, we measure income levels to say something about inequality and its historical evolution. Still, there is much we don’t yet measure, which is why we need more (historical) statistics, not less, much like Piketty called for yesterday: “We need data to have a better conversation about inequality in South Africa.”

More data allow us to test our hypotheses about how the world works. Because we believe, much like other (social) scientists do, that theories help us to explain and understand the world better than simply ‘having an opinion’. Astrologers have an opinion. Homeopaths have an opinion. But I don’t rely on them to tell me why I am ill. Social scientists (yes, all of them, even historians) construct theories about how the world works, and then use evidence (quantitative or qualitative) to test the relevance of these theories.

Which is why I find it surprising that very few of the commentators at yesterday’s Piketty lecture actually engaged with Piketty’s theory at all. I assume everyone actually read the book – or at least the first chapter that summarises the thesis quite nicely. But did any take the trouble to read at least some of the critiques? This paper is a good start, written by an economist and political scientist. It actually uses South Africa as a case study (in comparison to Sweden) to show why Piketty’s measurement of inequality misrepresents what actually happened in both countries during the twentieth century. Or there is this (rather long) response from Deirdre McCloskey, certainly no proponent of the mathematical direction economics took in the 80s but also not averse to fighting with numbers.

And why did no one – not even Piketty himself – make an effort to gather historical data on wealth inequality in South Africa? With little effort and using Reserve Bank data, a PhD student at Stellenbosch could calculate wealth and income rates for South Africa going back to 1975. Instead of finding the same U-shaped rebound in private accumulated wealth as Piketty did for rich countries, she found that in South Africa the wealth-to-income ratio has been relatively low and stable at about 250% for the past 40 years.

This is important not only because it shows that social context and institutions matter, but because it could have very real policy implications. The Davis Tax Committee’s recent recommendation on estate duties is partly motivated by extensive references to Piketty’s book. Acccording to the Financial Mail, the committee suggests that the rules should change so that tax revenue from estate duties increases by about 10 times. Here’s Stan du Plessis, dean of Economic and Management Sciences at Stellenbosch and PhD supervisor of the student, on the topic: “The Davis Tax Committee and everyone else in SA assumed that since inequality is so high in SA, what Piketty was saying must also hold true for SA. It does not.” That is what economists do.

Land expropriation is another policy of choice to reduce inequality. Piketty argues that because land redistribution have reduced inequality in Brazil, for example, it should work in South Africa too. Not quite: I don’t know much about farming, but I do know that most land in South Africa is not as fertile as in tropical Brazil. Here a farmer needs a lot of capital equipment to be productive, which in turn requires large scale farming to be profitable. It also requires management and technical expertise. Those things, in contrast to land, are difficult to expropriate and transfer. Why not, instead, give poor, black South Africans a choice: I am quite confident that not all would prefer to become farmers. Offer them shares (at massively discounted rates, perhaps subsidised with the income from the wealth tax) in companies listed on the Johannesburg Stock Exchange. To begin with, the SA government owns shares in several listed companies too: if these are transferred to poor South Africans, they have liquid capital which they can – if they so choose – either sell and buy land or hold on to earn dividends. This is what BEE is all about, and in the few cases where it was implemented correctly, like in Naspers selling discounted shares to black South Africans, it has created immense wealth. Giving someone land without the necessary scale, capital and skills to work it (especially someone living in a city, like most South Africans now do), dooms them to a live of subsistence farming.

Piketty’s other proposal of a higher minimum wage also fails to acknowledge the excellent work of South African economists over the last few years. Yes, a higher minimum wage in the United States might not increase unemployment (because it is off a low base and much lower than the median income level), but to recommend such a policy in a country with an unemployment rate above 30% is not only irresponsible but disastrous. New research by labour economists in my Department at Stellenbosch shows a stark rise in unemployment, 4.8% in the Western Cape of mostly temporary workers, following the increase in the Western Cape minimum wage on farms two years ago.

Because data allow us to test and improve our models, certain theories become generally accepted. One of them is the likely impact of a wealth tax. I am not necessarily against a limited wealth tax (for political economy reasons), but what Piketty and his commentators failed to do was spell out the likely effects of such a tax. So let me attempt to do so. A wealth tax favours the young and punishes the old. Young people, like me, have many debts. If the wealth tax is instituted on net wealth (which I think is what Piketty argues for), then it will have a limited impact on me but will tax my parents heavily, who have paid their debts during their lifetime. So here are my options: either I live frugally now, saving carefully and repaying my debts, only to be taxed by government when I’ve done so, or I stop saving and buy a fancy new car, because that’s better than giving it to government. Rather than growing my savings, I would instead find ways to consume all my earnings. (This is why Bill Gates suggests a progressive consumption tax instead. Piketty warns that consumption is difficult to measure, which is true. But it actually encourages saving, investment and accumulation, something a wealth tax does not do.)

Except, of course, one type of investment which cannot be (directly) taxed: education. So expect to see parents, because they cannot leave their children a large physical inheritance, spend even more on educating them. Surprisingly, this will likely increase inequality in South Africa even further. As economists know very well and as Kuben Naidoo, Deputy Governor of the South African Reserve Bank, so eloquently put it yesterday, “the major increase in inequality in South Africa is as a result of rising skills and not wealth accumulation”. Even if all the gains from the wealth tax is spent by government on education (unlikely to be the case), we will continue to have a schooling system that is horribly unfair. A lot of tax money so far has failed to fix the problem; South African economists that have measured these things clearly show that more school resources (like higher teacher salaries or buying more books) help little to improve education outcomes. Why is that likely to change if we add even more money to the mix?

Wealth taxes are most likely to reduce investment and social mobility, exactly the opposite of what is necessary to fix South Africa’s economy. Yes, we may get the richest billionaires to cough up some more of their wealth to government. But will it really matter to the kid from Soweto or Soshanguve whether Nicky Oppenheimer or Johann Rupert or Patrice Motsepe has R8 billion or R4 billion in wealth? Not a lot.

What will matter to that kid is whether he will get a fair chance in life. That is unlikely to happen if we don’t fix our education system first and make it easier for people to do business and create jobs. A wealth tax that discourages investment and raises the cost of education is not going to help, and might even have a perverse impact.

I agree that we need to address South Africa’s massive inequality. To correct this wrong is the reason many economists choose to study economics in the first place. And I also understand Piketty’s appeal: he proposes three policies that are relatively easy to implement and requires little more than political will. But, unfortunately, these policies are disconnected from the real world, the world which South African economists study. In a best case scenario these policies will reduce inequality marginally in the short run; a worst case scenario is that they inhibit investment and put further limits on social mobility by raising the returns to quality education.

I realise that I cannot convince everyone about the need to study economics. As an economic historian I’ve had my own gripes with the mathematisation of the discipline. But to ignore the theories of human behaviour that economists construct, theories that have been empirically shown to be worth keeping, is wrong. Opinions without facts are not worth listening to, as Hans Rosling perfectly explained. Let’s encourage our students to engage with Piketty’s theories, test them against the evidence, and keep them and use them if they apply to South Africa. Or improve them if they don’t.

Fort Hare deserves a better future

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Two former graduates of the University of Fort Hare: Oliver Tambo and Nelson Mandela

Two former graduates of the University of Fort Hare: Oliver Tambo and Nelson Mandela

Imagine a university that trained most of the leaders of the largest political party of a country. A university which educated many past and existing leaders of several other countries. A university which trained thousands of doctors, lawyers and other civil servants. A university which educated a Nobel Peace Prize winner.

This university would be the flagship of any country’s education system, yet in South Africa it is not. Fort Hare, despite its illustrious history, is not ranked in the top 10 universities in South Africa. It barely makes it into the top 100 in Africa.

And, unfortunately, UFH seems poised to remain there.  The university has a R100-million deficit. It has reportedly used National Student Financial Aid Scheme (NSFAS) money – intended to subsidise students from poor backgrounds – to pay staff salaries. And only last Friday it emerged that the university’s registrar, Prof Mike Somniso‚ was recorded saying to a colleague that he will unleash the ANC’s uMkhonto weSizwe military veterans on DASO, the Democratic Alliance’s Student Organisations that, surprisingly, won the Student Representative Council elections last year. Let’s think carefully about that: a university registrar calling for violence against students.

Here is Max du Preez on Facebook about the recording:

So how come this is not a scandal in South Africa? A senior administrator at a university planning violent attacks on student leaders to make it impossible for groups other than the ANC to operate on campus? Where is the reaction of the minister of Higher Education – this was revealed on Friday morning already. Have we written off Fort Hare as an academic institution? Isn’t it perhaps time to launch an ‪#‎OpenFortHare‬ campaign?

It is difficult not to become cynical about the attempts on other South African campuses to reform higher education when Fort Hare, a beacon of hope for many black scholars in South Africa and elsewhere in Africa during apartheid’s darkest days, is withering away. Just imagine, some would say, what the response would have been had a UCT or Stellenbosch or Wits registrar called for violence against students!

Instead, we find a deafening silence. No resignation. No national twitter campaign ostracizing the individual or institution. No call to appear before Parliament’s Higher Education Portfolio Committee. (To be sure, UFH was due to appear on the 23rd of September to explain the charges of fraud, but the meeting was postponed indefinitely.)

Those of us who care deeply about the state of higher education in South Africa are left bewildered. What will it take to transform Fort Hare (and many of the other formerly black universities) into a national asset that can deliver minds that can contribute to a more prosperous South Africa? Funding? Management? Student activism? I don’t know, but the many brilliant minds that go there – I know, one of my own PhD students is a former graduate – deserve better.

I don’t want to belittle the legitimate demands for transformation at South Africa’s top universities. But the number of classrooms and lecturers at these universities are simply too few to provide a quality education to all who want it. If we want to improve South Africa, we – the government, yes, but also civil society like the campus movements pushing for change – need to shine a light on all places that can provide quality education for thousands of students who won’t find places at (or cannot afford) the top universities. That includes Fort Hare.

This is currently not happening, which means that the financial mismanagement and the utterances of a registrar is not delivering on Fort Hare’s vision of In lumine tuo videbimus lumen (In Thy Light We See Light), a vision that had inspired the likes of Oliver Tambo, Nelson Mandela, Govan Mbeki, Robert Sobukwe and Mangosuthu Buthelezi.

We need to #LightUpFortHare. Their future students (and the legends of the past) deserve nothing less.

Written by Johan Fourie

September 30, 2015 at 07:33

Why you should study Economics (at Stellenbosch)

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The applications for Honours or Masters degrees in Economics at Stellenbosch University have just opened. Early next year, about 80 or so students will arrive for the quantitative boot camps which kick off the year. The Honours students will get their first taste of graduate studies. And let me be honest: it is tough. Core modules like macroeconomics, microeconomics, econometrics and mathematical economics make the first semester a long and arduous affair. And then there are several electives to choose from, including international trade, development economics and economic history (where you’ll find me). The second semester has more choice but is no less rigorous: labour economics, industrial organization, public economics, environmental economics, the economics of education, the economics of technology, institutional economics and more.

These modules reflect the primary reason why I think studying Economics is worth the effort: it provides graduates with a set of analytical tools which allow them to make meaningful contributions in many spheres of society. For some, the immense inequality and high levels of unemployment that we witness in South Africa draw them to the field, eager to find solutions. Economists want to make the world a better place, and hope to use their rigorous methods to do so. Whether it is in education policy, or health policy, or trade and industrial policydevelopment policy, or competition policy, or monetary policy, economists at Stellenbosch apply the methods they learn to real-world evidence and make suggestions on how to improve society. That, I would argue, is real job satisfaction.

Some want to use the analytical tools of economics to, well, make money. They use the analytical tools of economics to start innovative companies like Custos Media Technologies, a company co-founded by a recent Masters graduate in Economics that hopes to reduce internet piracy. Others become business strategists of large corporations: Michael Jordaan, former CEO of First National Bank, and Jannie Mouton, founder and CEO of the PSG Group, have degrees in Economics from Stellenbosch.

Almost all of our graduate students find work immediately. Salaries for economists in South Africa and abroad compare very well with other professional occupations. This is why consultancies like KPMG, PwC and Bain are beginning to recruit economics graduates in larger numbers. In earlier years, our best students would have found a place within the public sector, most likely Treasury or the Reserve Bank. Now, although they’re still head-hunted by government, our best prefer the top dollar of the consultancies. In addition, there are many smaller economic consultancies that employ former students: Econex (based in Stellenbosch), Genesis Analytics (who sponsors an annual graduate prize) and NKC (now owned by Oxford Economics), to name a few.

I think graduate students from Stellenbosch are particularly attractive in the job market because of the exposure they get to quality graduate training. Graduate lecturers are generally young and almost have studied abroad for an extended period of time. As all classes are taught in English only, classrooms are also diverse. About half the students that enrol for Honours obtained their undergraduate degrees from Stellenbosch; the other half join from universities in other Southern African countries (approx. 20%) and from European countries like Germany.

Most Honours students continue into the Masters degree programme. Thanks to better funding, it is increasingly likely that the best Masters students, after perhaps spending a year abroad, return to begin a PhD. The skills they gain here make them exceptionally well qualified for research and academic jobs, in South Africa and internationally.

Alfred Marshall said that Economics is the study of people in the ordinary business of life. I cannot agree more. I also liked this summary: Studying economics will develop habits of careful thought, the application of mathematics, and practice in clear writing. Economists engage the world of current affairs. Studying economics includes learning to use statistics and to read critically. Economics graduates are interesting people both because of their skills and because they can explain why economic phenomena occur and how economic performance might improve.

So, if you are a final-year undergraduate undecided about what to do next year, why not make a great decision and enroll for an Honours at Stellenbosch? Or, if you’re currently doing an Honours somewhere else in South Africa, why not consider Stellenbosch for a Masters degree in 2016? To put it in language you might understand: the marginal returns of studying Economics at Stellenbosch, in monetary and non-monetary terms, are exceptional.

*If you want more info on Economics at Stellenbosch (including funding information), visit the Department’s website here. If you want more information on Economics in general, visit the AEA website.

**I am often asked how to best prepare yourself for an Honours degree in Economics. I would suggest that you, aside from doing third-year economics of course, also enroll for good courses in statistics and mathematics (at least up until the second-year level). And if you have more undergraduate time, do history and philosophy too. Here are some other random thoughts on what to study.