SCOTT TIMCKE: Business leaders must abandon failing model that enriches the few

The global economy is undergoing a profound transformation that demands South Africans’ urgent attention. While economists and policymakers debate whether we are experiencing deglobalisation or merely a reconfiguration of international trade, a more fundamental shift is occurring beneath the surface: the emergence of a post-neoliberal order dominated by AI-mediated rentier capitalism.

For decades the neoliberal consensus promised that market liberalisation, privatisation and financial deregulation would deliver more prosperity. Today, that promise rings hollow. Instead, we are witnessing the triumph of rent over profit, and of appropriation over production. These developments threaten the foundations of our economic system, as well our democratic system.

Two powerful forces are driving this transformation: Big Tech and asset management corporations. Companies such as Google, Amazon and Facebook have created what economist Yanis Varoufakis calls “cloud fiefs” — privatised digital domains that replace public markets with algorithmic control systems. These platforms isolate buyers from sellers, subjecting both to exploitation while extracting enormous “cloud rents”.

Meanwhile, asset management giants such as BlackRock, Vanguard and State Street have quietly amassed control over vast swathes of the corporate landscape. Together, they own significant stakes in 90% of NYSE-listed firms, wielding unprecedented influence over corporate behaviour and government policy alike. These companies have become core parts of the functioning of contemporary capitalism.

These are not just routine business strategies, but fundamental restructurings of economic power where ordinary people have ever less control over their economic futures. Big Tech controls digital interaction spaces, while asset management corporations control corporate ownership structures. Together, they represent a transformation in how economic value is created, captured and distributed in contemporary capitalism.

The implications for developing economies, including SA, are particularly severe. The manufacturing-led export growth that lifted millions out of poverty in East Asia is losing its effectiveness. The comparative advantage of cheaper labour no longer aligns with contemporary manufacturing needs, while protectionist policies and geopolitical tensions further complicate the picture. Any plans to revert to primary resource extraction reinforces commodity dependence.

For SA and other middle-income countries, these developments can present an opportunity. While traditional export models face headwinds, the green transition creates demand for critical minerals for local value added manufacturing. At the same time South-South trade has more than doubled since 2007, offering new pathways for more equitable economic relationships.

Yet navigating this transition requires a fundamental rethinking of economic policy. The stale dichotomy between state-led development and market fundamentalism distracts from designing stronger competition policies to address the unprecedented concentration of economic power, global governance frameworks for emerging technologies, and industrial strategies that extend beyond manufacturing to encompass services and finance.

More importantly, we must recognise that growth alone will not solve SA’s problems. The benefits of recent economic expansions have flowed disproportionately to those at the top, leaving working and middle classes facing stagnant living standards. Future GDP growth and JSE market gains are likely to follow the same pattern unless we implement policies that deliberately redistribute wealth and power. Political stability flows from economic justice.

This means investing in public goods — healthcare, education, infrastructure and climate resilience — as each has a role to play. Such measures may not always boost short-term growth metrics, but they will create more resilient markets and political systems. If we do not chart this course there will be trouble. The rise of authoritarian populism worldwide is a predictable consequence of economic systems that concentrate benefits while socialising costs.

Business leaders and policymakers face a choice. They can cling to a failing model that has enriched the few while undermining the stability on which all prosperity depends, or they can embrace new economic paradigms that distribute opportunity more equitably and respect planetary boundaries.

The transition will not be easy. Any meaningful reform will involve transferring wealth and power from entrenched interests to broader populations. But the alternative — escalating inequality, social fragmentation and ecological breakdown — is far worse. 

The future of our economic system, and our democratic institutions, depends on our willingness to move beyond neoliberalism towards something more sustainable and just.

• Timcke is senior research associate: research at ICT Africa, research associate at the University of Johannesburg's Centre for Social Change, and an affiliate of the Centre for Information, Technology & Public Life at the University of North Carolina at Chapel Hill.