Alec Hogg: Joining SA’s political, social, economic dots with 2d Level Taking into consideration

good morning hi um uh I will use this in a minute just getting organized we've got our team here from Biz news you know we uh we have a little office opposite Checkers you're welcome to pop in and have tea anytime yeah and uh we I'm delighted to be here.

This is not what I do uh but I am we are now members of the Heron society and it's a it's a real privilege to be talking with you today can you hear me okay in the back you can that's all fine thank you a couple of years ago a very good friend of mine said that I needed to start reading a little more widely I do.

Read widely I read a heck of a lot but he recommended me to a chap called Howard Marx now those of you been following the money web story and the bus news story and maybe my story would know that for many years I used to go to Omaha to the annual general meeting of Burkshire hathway where Warren Buffett who is now.

94 and Charlie manga who passed away last year this year at 99 would hold Fort 2006 I went to my first conference there and I was told by a good friend it's about time we went because we don't know how long these guys are going to last and this is the end of Americana when they pass on well that was 2006 and this year was the first year that the.

Two of them work together I wrote a book about my experiences there and what I learned about Warren Buffett and that book has done very well it's sold more than 10,000 copies which in South Africa lamentably is a best seller but my friend Sean PES who's one of the top asset managers in the world in fact he received an award two weeks.

Ago in London for being number one of all Global funds in the UK from a uh an organization there which is highly respected he said to me read this guy Howard marks and I did there's a very good book took a while to arrive from Amazon in the UK in the in the US rather and in it hard marks talks about second level thinking and that's what I want to.

Talk to you about today because our world is contaminated by first level thinking it's contaminated by people who believe that simple formulas and easy answers are all you need I've been involved in the internet since 1996 I left uh various positions that I had.

Within the media industry Sunday time Star Finance week Sac uh for a a period spent a little time in corporate and while I was in in Absa I was a member of the executive committee at Absa in the early 90s a colleague of mine called me into his office and said come and have a look at this thing he just got back from Redmont.

Where IBM has its headquarters and because Absa was such a big client of IBM he got the insight into what was happening in the latest technology his name was Dr Al Bergen he was head of Technology at Absa at the time incidentally he was subsequently poached by Standard Bank to become their head of Technology that's how it goes in banking.

I guess but he showed me this thing called the internet and that was in 1995 I make plans quickly to leave Absa get back into my uh industry which was media and started money web in 1996 money web was supposed to be my life's work those of you know my story will also real iiz and remember that it it wasn't my last's work because um well.

Let's just say that I had a disagreement with the corporates that that was brought in during my sabatical I departed in 2012 started buuse with my wife Janet who's here in 2013 and we have celebrated our 10th anniversary here in hermanus at the uh Civic uh Auditorium uh in August last year where.

We had 200 people who came and joined us and it was sold out within a couple of weeks we saw that that was working quite well so we then had the bus news conference which we've had five editions of in the drakensburg we brought it here there were 500 delegates also sold out very quickly 28 keynote speakers the best investment brands in the country as.

Well as some of those that that Rod mentioned but let's get back to Howard marks and second level thinking so what is second level thinking it's about looking at things differently looking in a deep way complex convoluted sometimes but actually embracing complexity and potentially our best.

Entrepreneur in South Africa many people will say it's I don't know Chris visa and he he he certainly deserves that Accolade there are a number of others Yan Rupert but to me the best entrepreneur in South Africa by country mile is Adrien Gore and Adrien Gore has built Discovery into a substantial business globally he has many.

International Partnerships including one in the UK in a company called Vitality which I'm going to revert to a little later and vitality has got 1.7 million customers who get Medical Aid from Vitality despite the fact that the UK's got National Health there's a story there too on second level thinking but Adrian Gore keeps telling us that.

The the way to be successful in business in life is to embrace complexity sadly we now have a society where Everyone's an expert just go and look at Twitter or X everybody seems to know better than the next person because of something that has been forwarded to them which has then been forwarded on that forward.

On to other people ban of our lives at businesss we keep getting this crap sent to us which unfortunately most people are totally unaware of that it is generated by those with agendas Vladimir Putin is is quite a crazy guy but he's also quite smart and he runs what a called troll Farms what is a troll on the internet a.

Troll on the Internet is somebody puts out misinformation so we have troll FS all they do all day is put out misinformation and the useful idiots amongst us pick it up and say wow I like this oh I want to watch RT it's got good stuff oh of course we didn't invade Ukraine because of any other reason than they bad people and.

Nazis and then they pass it on to the next person and the next person and the first level thinking contamination spreads nobody stops and says damn it why do they have to have troll Farms damn it why is nobody immigrating to Russia why does everyone want to go and live in America but they're supposed to be the worst people in the.

World yet there's a long list of people who'd like to immigrate there why why why uh-uh that's too difficult that's complex that makes the world more complicated than we want it to be anyway I'm going to go into a couple of specifics for you now and let's start with the election it's 3 weeks and.

One day ahead and I'm indebted here to a book that I've read recently what happened at our conference I ask the the keynote speakers to please give me a list of books that they can recommend that we can pass on to our community and they did and one of those books was a book called Guns germs uh you got it okay and and steel written.

By Jared Diamond it sold over a million copies in fact two million the L count and New York Times bestseller pit a prize winner you must know if it's got all of those things pretty good book it's fantastic for anyone seeking knowledge and everybody here in the 3ua uh organization or clearly that's what you here to do you seeking.

Knowledge I would strongly strongly recommend it as something to read but in the book which goes to 550 Pages hidden in amongst there is something that is very relevant to South Africa well a couple of things relevant to South Africa I'll get to the second one in a moment but on page 303 so almost 2/3 the way into the.

Book where he is explaining how Society grew societies Grew From well the whole thesis of the book is hunter gatherers who then became farmers who then became bands of farmers who then eventually became States so it's the progression how do those who run the states the Kings the Emperors how do they.

Retain power he said through history and I want you to listen carefully to this because there are parallels in South Africa through history there were really just four things that they focused on the elites or what he calls the kleptocrats first disarm the population and arm the.

Elite if you read buiz news you'll see that there's been a lot of conversation and debate recently about guns there is one side of the population that is one side of the argument an academic who says You must give up your guns I did you remember uh back in the before 94 um where there was a a gunfree South.

Africa initiative and we all went those of us who had firearms for protection we gave them away because this was going to be the new world well that was first level thinking second level thinking says take it seriously because through the history of man kind Elites have used this disarm the populist arm the elite one of the.

Strong protagonists on the proun lobby is a guy called Ian Cameron who are I'm sure you all know he was a one of the bravest people I know and he's actually going to Parliament this year he's very high up on the DA's uh provincial list and will be hopefully taking on in Parliament after May the.

29th the second approach remember the only four was make the masses Happy by redistributing much of the tributes received in popular ways tributes taxes the Romans knew all about this they had an empire for hundreds of years and so did others well our guys just used social grants of which 19 million South.

Africans received there remember the co Grant the co Grant went to Millions more South Africans and it was supposed to be for Co for the difficult times in Co well we all know what's happened there or do we it is continuing the co Grant has not been phased out as the temporary thing it should have been why well look at what.

Diamond tells us about the way the kleptocrats and Elites retain power the third one he says use the Monopoly of force to promote Happiness by maintaining public order and curbing vience you got to think back here 13,000 years to when all of this began and in all of that time all of the societies.

That manag to retain power the elites who retain power they use their Monopoly on Force because what is a state a state is an organization that has a monopoly on force and the fourth one oh by the way there the obvious issue is well Becka CL is keeping his job even though he's doing a terrible job why because of the.

Monopoly on force and the fourth point that Jared Diamond makes is he says construct an ideology or religion justifying kleptocracy well we have be and if you wonder whether be is is not the action of a clipto cron just have a look what's happening to estate agents right.

Now those of you who don't know it is a proposal recommendation from the authorities that estate agents have to be 51% be otherwise they will not get a Fidelity Fund certificate which means they cannot print it so for the F first time the very first time in South Africa up to now it's been recommended.

Recommended recommended one of the speakers at at the bus news conference with antha Jeffrey again I recommend you read her book read her book on socialism she talks about the national Democratic Revolution it's not a it's it's not something that was thought of and then discarded as many people in the.

Da seem to think it has been it is the core ofc policy the national Democratic Revolution turn us into Cuba sounds like I'm becoming a politician but my goodness there are so many smart people in our country who have written so many good things but with first level thinking we never we never discover that we never never think.

That further and you guys in this room you've got people who look up to you your children your grandchildren and they say grandpa should I stay in South Africa now that I've got my um social science degree or my computer science degree and you say no it's a terrible Place go go and make England richer or go and make.

America richer whereas instead you should be looking I think at your responsibility of changing this Society Society only gets changed by the people who apply second level thinking never ever first level thinking so there we go you got your four criteria if you look at everything in a different light now you might say oh okay okay it isn't.

The conspiracy conspiracy theorist this is the way that Elites and cryptocat have worked for thousands of years and there's not a heck of a lot different going on in our country I just take you to national health insurance as a again using second level think first level thinking of course we all want to have everybody in.

The country to have the best possible health and to have the best possible care of course we do it is the easiest thing in the world to sell to a population but we in South Africa now have legislated it won't come into Force because constitutionally they're going.

To really struggle and they'll be caught up in in courts for many many years one hopes but we've legislated something that the premier of King can go and talk to a group like this and say to the people in the audience on the 30th of May you you can go to any Hospital in the country you can get any health care you like and the.

Government will pay now you doubt that well that is it was recorded at musim maymani who was another of our speakers at our conference uh Distributing that on his line and it's it was Lui talking himself so there we go nice election Ploy but just consider for a minute National Health Insurance many of the South.

African uh Exiles spend time in the UK and they really love the nhi of the UK and there's a lot to like about it but now apply second level thinking to that the nhi in the UK costs the country 230 billion pounds a year okay2 230 billion p a year that works out to 5.3 trillion r and all the taxes that were received by.

The government last year all the taxes every cent was 1.7 trillion ramp so we now want national health insurance like the UK has and by the way the Brits okay maybe they just do complain you know as part of their lifestyle but the Brits say it's not good enough here in South Africa we would have to take every cent of tax that was.

Spent last year treble it and then we would get to the level of national health insurance in the UK but then you take it one step further so in other words that means it's 300% of South Africa's total tax tap in the UK 20% of their National budget is spent on National Health Insurance 20% it's a.

Lot but it's it's only 20% relative to 300% so you stop and you think and you ask yourself okay well y you know costs are lower in South Africa second level thinking we can get away with less than they spend in in the UK okay because cost are lower true but the minute you have.

Somebody working for the State anywhere in the world they will look at another state employer as an alternative and if you are a doctor working in South Africa for the state why would you work here for a fraction of the income that you could get working doing the same job in the UK for instance or France or other countries that are similarly.

Positioned so second level thinking nhr what is it it's a lovely election Ploy as is the be for estate agents but there's a lot of belief behind it within the kleptocrats who run this country and you look at me say hey but I'm a andc and I've I've always voted for the NC what you calling them kleptocrats I have two words for you zondo.

Commission please read those you know there's just so much information that is available we are a democracy we have got Freedom of Information but if we don't read it and we don't inform ourselves well then we deserve I guess not or we deserve to be acted upon not to act upon I want to go back to Jared Diamond.

Now because another big story on the political front is the Western Cape you've heard and maybe some of you even um supporters of Cape Independence so where does this all come from we had a guy actually at our conference full crate who made I thought a compelling argument for Cape Independence his whole idea was very.

Simple he says if if you can take the national government and the people who run the national government and the parties who run the national government and then you take the Western Cape and those parties who decide on your laws are a tiny minority in the Western Cape so why should the Western Cape be run along the.

Same lines as people who actually do not have the support of the people in this area so let's vote on it that's all he says let's vote on it and make a decision now I'm not one way or the other but I do want to just share with you this very interesting fact from Jared Diamond's book so remember it's all about the last.

13,000 years of humanity and how humanity went from being hunter gatherers to having societies where they grew food and interestingly enough it all happen simultaneously he writes and by the way you know who's Jared Diamond where's he getting his information from archaeologists and more recently.

Linguists because what linguists are able to do is have a look at how languages have developed and in that way they can see when certain products or certain issues came into a language for instance just use camel as an example if there were the they're all termed as Whites by the way the eurasians from China all the way.

Through to Europe and in Africa north of the Sahara if those people then traded camels with the what we know as it's called the niga Congo group or the blacks in the in the terminology of of humanity then if it arrived later if the camels arrived later they would use the same word that the people in the North.

Had been using using all that time so you can work it through in in language so you've got archaeology which we all know about in this country and this this area is very rich in it and then you have Linguistics and through that you can join the dots and he's done it so what happened here in Africa is very interesting around the time of.

Christ the bond 2 had already moved from a little area between Cameroon and Nigeria down through Africa they subsumed the pigmies who were one of the six there were six major streams of humanity Aboriginal Australians were the only ones not present in present in Africa the.

Asians incidentally from Borneo had colonized Madagascar I think of that as a human feet uh Jared Diamond says it was the greatest migration in history no one seems to know about it but the Borneo people had somehow gotten from Borneo to Madagascar 2,000 years ago it's an extraordinary book it's well.

Well worth reading it but the so the the the B two people had come through subsumed the pygmies the pygmies do not have a language anymore they were at one stage in Equatorial Africa they are now they now speak languages of the tribes that they kind of came into contact with and came all the way down and by the time of Christ black people were already.

In se2 in South Africa but only as far as the fish River why is that south of the fish River I.E the Western cap were the koan and there are still remnants of the koan in Tanzania people up there with their languages which are Coan.

Languages how's that happened well they got subsumed but they still stayed there so you can see he argues how Humanity was moved down and the koan were then on the western cap this is the time of Christ but my history book which will okay admittedly I went to New so who knows um but but I was told that the whites and the blacks met each other at.

The fish River and you had the first Cora War which was in 17 1979 and that was what what what everything happened but what if you read Jared Diamond you understand what he's written in the 550 words the migration was supported by the plants you were able to grow and those plants were taken from.

Nature so of all the areas the six areas around the world where agriculture began the most productive of all of them was what is called the fertile Valley which is the tigras and Euphrates river and in the fertile Valley sorry the Fertile Crescent in the Fertile Crescent was the first production of.

Wheat barley beans peas and grapes in West Africa the production there was of sorum and Millet Pearl Millet and so you could migrate with your animals you domesticated animals that's a whole new other story as well but you could migrate if you could plant.

And then you migrated at the rate of 7 miles a year okay so this didn't happen people didn't just up sticks and say hey we're going we're going east and then land somewhere else they migrated slowly as populations grew and as you had more food to feed the population and so on so here we've got the guys who come from.

West Africa who producing sorum and Millet which doesn't grow in the western cat so they stopped at the fish River because these are not Mediterranean crops and you can't just find a new crop to grow from nowhere in an area which has a different climatic approach so what happened was then the Europeans came to the Western Cape and they.

Brought with them the Mediterranean crops from the fertile Cresent now this is an interesting interesting observation because we have a part of South Africa which is very different to the rest of South Africa that was put together in 1910 by the British and today is now saying but hang on we.

Ar what really part of these guys up north don't really love socialism in the way they do we a bit pissed off with social grants we think that you should be meritorious and that's why the Western cap is got such strong support for the only political party here in the country that supports all of those ideas very very interesting second level.

Thinking I want to finish off with just a couple more and then maybe we can have a chat about this because I can see some disbelief in no I can't I mean I can see you all getting this so but the the the the history of the last 13,000 Years also explains when you use second level thinking why there is such income disparity around the.

World certain societies did not have a head start others did the aboriginals were in Australia for 40,000 years when in a more more advanced Society because they had Australia didn't have anything that they could grow so they were always hunt gaers little bit like the kand little bit like.

The pigney it's a tough place to be in in any world when the hunter gatherer comes up against the guys who who have got an organized system because you have to have that for agriculture it's the reality of what happened in Australia what happened subsequent to that is just awful and in this country as well but.

Eventually if you apply second level thinking although the koi koyi were virtually wiped out by small pox 95% of them lost their lives because of this disease eventually that disease was going to get there eventually that disease was going to get because it was the part of his book where he talks about germs germs go and if you have a.

Society that is not that is not immune to it it is going to wipe you out so you might blame the Europeans for coming to South Africa and bringing the germs but it could just as well have been Asians doing the same thing interesting when you then have a look at the Head Start that this this band has.

How did it happen how did it happen that Europe and the United States you've got 10% of the world of society have got 50% of the world's wealth how how it's just and that is actually the story that started Diamond's Mission talking a lot about him but I think there's a lot in this book that actually is so relevant to us here in.

South Africa well the reason there he explains is it's much much easier to go west to east than it is north to south when you're a farmer when you're an agriculturist because the difference in the climate is so much less when you're moving across hence you had this move from west to east from Asia all the way.

Back to Europe where they then used Innovation inventions they changed things they learned about gunpowder from the Chinese they learned about writing from the Muslims and so on and so forth but to go north to south not so easy and when you have a look at the world you will see that the difference is the concentration of wealth is from.

Those societies and then you take it one step further and you look at governance systems in the most recent time for most of most of History uh China has been by far the richest U Nation on Earth but then they did some crazy things like introduce communism squashing human Ingenuity whereas the.

Americans who had 0% of GDP in 1770 0% of global GDP in 1770 and now they have 25% why well they brought in a system to promote human Ingenuity unlock the potential that exists in each one of us as human beings it's there we can all use it but sometimes the kleptocrats don't want us to use it the kleptocrats.

Want us to operate differently on those four principles I spoke about before there's a wonderful story on second level thinking onbs news this morning written by RW Johnson who's uh he's an Oxford Dawn he people really understand the caliber of or the status of this man he's he.

Taught a great number of the people who have dominated British politics he was an anti- apartate activist who went to the UK on a road scholarship a week before the two PS that he had with him were arrested so he would have been arrested as well he then stayed in England because he wasn't welcome in his home well back in South Africa he'd come.

Here from England as a young as a young boy and he then became an Oxford Professor for more than a quarter of a century in 1994 when things changed he came back home and he has been just in a different lead when it comes to analysis of South African issues as well as International developments I love it.

When RW sends us a peaceful publication my accountant doesn't love it because obviously he's not doesn't come cheap but I can assure you that everything that we get from RW Johnson is just it's just a joy to read such incredible insights and his latest piece that he has today he talks a little bit about brexit and you you might recall that.

When brexit happened in 2016 we all said what you know this wasn't supposed to happen it's a bit like a trump getting elected in America brexit wasn't supposed to happen well RW argues that it always was going to happen because in 17 in 1973 when Britain went into the European Union it was under the impression that.

It was going to create a troa Britain France Germany and that Britain and France would offset Germany and then they would actually be well balanced that have proper defense proper uh technology Etc says but unfortunately the Brits found out very quickly that that wasn't the way the French and the Germans wanted to do things and that.

They always went off in a huddle the French and the Germans So eventually the British started complaining something of course that they're not very good at and as a consequence of that the seeds were swn in 2016 they left it's a disaster on so many levels but right now it's a huge disaster.

Because you got a guy over the Border a very well um personification of a clipto who's been in power for what's it going on for 30 years now and that guy over the Border says let me test these chips let me invade Ukraine let me just kill I don't know how many people he's killing but whatever that's all happening so Europe's panicking and Europe saying oh.

We used to get all our energy from these guys can't do that anymore oh what are we going to do about defense Germany today this morning announced that it has promised the Baltic states that if Putin invades it will def them isn't that interesting so suddenly you got a defenseless Europe that's now having to stop making plans to being to have its.

Own defense I remember having a a lunch with Alec Owen does anyone remember that guy Alec Owen and and uh at the time it was it's we were in the Euphoria the Mandela era and he was arguing very strongly for for not cutting arms spending and I remember saying to him Minister I think you used to call him or Minister we used to call him those days.

Wow we got no enemies said no State should be defenseless no State should put itself in a position where somebody else could invade and take take advantage and the ukrainians did that themselves they gave up the nuclear weapons remember they were the third biggest nuclear weapon Armory in the world they gave them up because they.

Were promised by the west and the Russians that if anybody invaded them they would be defended by the west of the Russians oh yeah nice that one turned up anyway second level thinking when you look back on that you shake your head but you know you're going to find any number of guys who sucked in the stuff from the the.

Troll factories telling you why Putin's a good guy you know 30 years of of one man one party strong man rule really good and we have a guy in South Africa with at least 10% of the vote telling us that we are Putin and Putin is us we do know that the Russians are interfering in our election we know that for.

Sure interesting what happens over there you remember there's that love me saying that when a butterfly flatters its wings in the Amazon there can be a tornado in Australia those are issues that second level thinking will at least help you to understand you can't change it God grant me the serenity to accept the things I cannot change encourage to.

Change the things I can second level thinking puts you on that planet and finally unemployment in South Africa this is one of my favorite topics the United States had its Great Depression we still read about it today at the time of the Great Depression in 1933 the word worst possible time for the Americans where.

There was soup kitchens there were people dying of starvation the unemployment rate was 24.9% just hold that one side South Africa's unemployment rate officially today is 32.1% but we have no soup kitens well we got some Churches who are helping the poor we have no people dying for sure of.

Poverty we have no revolutions why well I I like what GG elcock says GG elock is a guy who grew up in a mud hut in MinGa how did he start Life as a mud hut in in a mud hut in singer but his father who was a a well-qualified medical doctor who had came from a family of farmers gave up their.

Farm in the drakensburg area because he was an activist he believed he really really believed that South Africa needed changing we talking now about the 60s and so he broke with all of that he and his wife went to to the poorest poorest area they could find M Singa which is.

Populated by the Zulus who fought with the British at isan ju so you must know if you fight with a British at isan one you going to be punished when the come back into for obvious reasons by the way the W at P so they SEC they said ni but they don't really except and they don't get much help but Dr El decided he would go.

There and he brought up G and his brother in a house with no running water no electricity but lots and lots of BS lots and lots of BS so D grew up as a white zoo and he's written some beautiful books of AR his experience third world time child that when he then and very very much the capitalist when he then than to the city he stayed at.

Jo in the in the hospitals to go that R people at St maturity he started ring a name for himself as somebody stood what is going on in the H for at when talks joury often he's coming with us to London we actually doing a a conference in London on Wednesday when he talks GT giv you a very fresh.

Perspective a second level thinking perspective on South Africa not this 32.1% unemployment rate which is well a qu to higher again from the highest unemployment rate that we' see in history by the way it's not just us to be told this but we you when you Google who has the highest government in the world it will come up there South.

Africa and boy and you know that worthy naan of and in fact like 6 percentage we higher than the West Bank in Gaza what G will say you but it is an econom that you guys of know exists there's a thing called backr where do the backr s s like many of you when you head I could go on and on and.

Walk about things like you know minimum wages and what that's done to the society that when you had a backr where you had somebody a helpman used to call it a m but they were help you helping a that's what be meded on this among people from a different are but we the backu with these.

Little they be Bing with Wii uh air conditioning little kchen small but rent out by the owner of the house and some of these people are mobs g b you had you had a backb bus uh who was decorating he was about 300,000 bed she wanted to add on to a new basic another little it's like a little hotel.

Little hotel little apartment that the banks she tells us a bil to buy block but they won't give her any money to go the that you have Bakers you have people at the side of the road all eing those who are going get to their jobs through the hundreds of thousands of P you have a huge huge huge economy.

That is belting and yet South Africa we tell ourselves has higher unemployment by far than the mered statement the great question G puts it into perspective for me when he says I ask today do you have a job she said I work but I don't have a.

TR and that's the reality of South Africa by the way he puts it the true sou afate was the and that we correlate with the real of stability than we have as a society we had that right but we know that those sh and other other we had a we had a wondering at the.

Business at the d a couple of times ago couple of years ago by Jas cor J the cor property crew got many many of the uh this these shopping centers in k a number of which were raised to the ground just showed us a movie and it's it's business TV watch it really agreed with that you said when the guys arrived there it what the mass or the CR.

It was a little Advanced force with half High rifles who shot out the first of all they knocked out the the the sprinkler system and they knew exactly what they were do it was very well planned the RS didn't just happen because people were cross because riots happen because people took the of the situation we live in an amazing.

Country it's just the most people inredible place in the world and part work for your test must be test to how with a little bit of P governance you could live a very full and happy life in but if you going to let yourself get sucked in by first level thinking if you're not going to challenge yourself.

And those who rely on your opinions more importantly those children and grandchildren who look at you and say B why is this happening this way and instead of spreading back to bit something that you just be said by a troll you might take a little while to reflection and consider a b a second they thinking this.

Is a wonderful country a wonderful world and but that doesn't mean that the gats who been dominating Society for 133,000 years at years have set me this step thank you

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