Populism rules, OK! Well, not always. When misguided, or taken advantage of, instead of it being virtuous and in the best interest of the people, populism can lead to the broad-based economic destruction of the population. Popular failure is a death spiral.
The will of the people, of the masses, of the collective, is playing an ever-bigger role in business. Customers have choices and will "vote with their feet" to find alternative goods and services if your product is not up to scratch.
Consumers have way more influence now than simply the discretionary spend in their wallets. Institutions are being dis-intermediated as retail spenders and investors deal directly, on their smartphones, with the ultimate products they're purchasing. This trend will never reverse. Clever business welcomes that.
Perhaps the most famous retail trading platform, Robinhood (are they paying royalties to the guardians of Sherwood Forest, I wonder), is making investing directly available to individuals, in affordable, bite-size chunks, at minimal cost and maximum ease (as are many others around the world, including here).
Why are they winning? Because there is a clear and obvious intersection between the interests of the service provider and the users of the service, who had previously not had access to markets in affordable chunks. Robinhood took this intersection of purpose even further and cemented vested interest by inviting its users to subscribe for its shares. The more you trade, the more money the platform makes, and you own a piece of it. This virtuous circle in business is complete, measurable, contracted and tested.
In politics, not so much. In politics there is no contractual obligation to deliver to your voters. The trade is in promises, and the participation is not equal - one person, one vote does not mean an equal share in the economy for all.
The trouble starts when those elected to leadership, by the popular vote, fail to deliver on promises but still need the vote to retain power.
Increasingly ill-advised, if not illogical, deals are sought with the public - ranging from handouts (as pitiful as they may be) to bestowed rights to assets, for no exchange of value and with no assumption of risk. Such initiatives extract value from the economy for no return, and most often do not distribute it either widely or evenly.
Because it is not broadly distributed, this transferred capital right simply circles back to where it came from - the new rich supporting the old rich - further entrenching inequality, albeit in a slightly increased circle of new best friends.
Selection for inclusion is based on allegiance or loyalty, and the rewards for the elite are paid in either financial wealth or political power (which are fast becoming one and the same thing).
This will not end well. The source for funding economic favours eventually dries up when structurally no value is created as it is transferred.
There can be no debate that the elimination of poverty, inequality and unemployment is critical to our co-existence, if not our very survival. But if you're going to pass laws to transfer ownership, then at least, like Robinhood did, let everyone participate - create broad-based vested interest.
What if every rand spent by the previously disadvantaged required, by law, a transfer of a bit of ownership (in the entity where that rand is spent), however small, to the consumer, until, say, the broad-based BEE magic 26% shareholding was reached - by everyone?
What if a tiny fractional share of ownership in the bakery was required to be transferred every time a loaf of bread was purchased? In time, there'd be a transfer of ownership to the broad public, not the select few, and with it the creation of vested interest in a shared future.
However, a sustainable transformation can only be reached if, at the same time, capability and capacity are also being broadly built up.
This will require massive investment, which will need to be funded, at least in part, by deferred consumption expenditure. That, unfortunately, is not very popular.
• Barnes is a business leader and experienced all-rounder in financial markets and corporate strategy
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