This book epitomises the looming sense of unease about South Africa's future. Despite the very considerable achievements of the African National Congress (ANC), economic growth has today slowed to a trickle, the country displays an astounding level of inequality, and it suffers from an alarmingly high level of unemployment which entrenches enervating poverty. Even worse, the ANC under President Jacob Zuma, if not actively opposed to tackling the malaise, seems at a total loss at how to address it. So, as its blurb proclaims, this book is to be welcomed as a contribution to ‘growing our economy and achieving radical socio-economic transformation’, ‘whatever our ideological departure points'.

As a ‘how-to’ book, it takes us through punchy reviews of South Africa's ‘development story’, its expectations, and the challenges confronting major sectors of the economy: agriculture, services, manufacturing and mining. It concludes with discussions of the value and limitations of the extensive array of social grants in addressing poverty, the huge failures of the education system, and how ‘the redistributive impulse’ needs to be accompanied by greater emphasis upon entrepreneurialism and growth. Its conclusion provides a list of recommendations about how business, the state and organised labour could do better. This narration is buoyed up by reference not only to the usual success stories such as Malaysia and Singapore, but also, pleasingly, to quite a number of domestic success stories, such as the emerging table grape business in the Northern Cape.

Basically, the analysis is centred around five themes. First, emphasis is laid upon the high cost of labour relative to its cost in competitor countries. Whatever the arguments made, in response, about the need for employed workers to sustain many dependents and the high costs for workers of transport inflicted by apartheid geography, the international differentials are staggering (the authors compare monthly minimum wages of $543 for apprentices in South Africa with comparable rates of $183 in China, $300 in Brazil and $30 in India). Throw in to the mix that South Africa has one of the highest strike rates in the world, and the challenge to the government's preference for a high-wage, high-skill growth path rather than a low-wage, low-skill one (which Herbst and Mills claim would create far more jobs) is obvious. Essentially, their solution to this problem is the need to break the political hold which organised labour, in the form of the Congress of South African Trade Unions (COSATU) has over an ANC for which mass political enthusiasm is waning. Whatever the simplicities of their argument (there is a counter-argument that South African labour is far more productive than it is generally given credit for), the moral is clear: unless organised labour responds to this key issue innovatively rather than from a rigid ideological perspective, many of the gains which workers have made since 1994 are likely to be eroded by economic stagnation.

Less controversial is the second theme, that there is a major need for the reduction of the cost (in time and hassle as much as in financial terms) of doing business in South Africa. While the methodological problems of such indicators are well known, the fact that South Africa has embarked upon a consistently downward slide as recorded by Transparency International's Corruption index, the Heritage Foundation's Economic Freedom index, the World Economic Report's Global Competitive Report and the Fraser Institute's Freedom of the World index (p. 35) tells an alarming story. Nor does it help that in the matter of Black Economic Empowerment, the government keeps on moving the goalposts and ratcheting up its demands for indigenisation.

So follows the third theme, the need for a capable state characterised by policy consistency rather than alarming levels of corruption and incompetence, not to mention distrust bordering on hostility to business. Herbst and Mills locate much of the problem as lying in the ANC's longing for a ‘developmental state’ centred around planning and regulation of the economy, despite the clear evidence of weak state capacity. Central to this weakness has been ‘cadre deployment’, and the political practice of placing party loyalists in positions whatever their lack of suitability and experience.

And so to the fourth and fifth themes which merge one into another: the need for the ANC to adapt to new global realities, and the need for more constructive relations between business, labour and the state. We are all now pretty well versed in how, when it was in exile, the ANC was consumed with the issue of how to win power rather than how to run the economy when it had won it. Then Nelson Mandela went to Davos in 1992, had a Damascene moment, and turned his face against the socialist-inclined, pro-nationalisation proclamations of the Freedom Charter to embrace broadly market-oriented solutions; and how, eventually, the attempts to implement these, through the Growth, Employment and Redistribution (GEAR) programme culminated in the intra-ANC revolt against Thabo Mbeki and his eventual displacement from the Presidency. However, the succession of the Zuma administration has resulted not only in the entrenchment of highly rigid, statist prescriptions for economic growth, but policy paralysis and economic stagnation.

This has been illustrated by the fate of the National Development Plan (NDP), delivered in June 2011, which ‘offered fresh promise of consensus between government, labour and business’ (p. 184). Yet for all the NDP's promise, the government's response has been mired in contradiction – for instance, its recognition of the urgent need for urgent educational reform, while continuing to ‘provide blanket support for the dysfunctionality guaranteed by the dominant South African Democratic Teachers’ Union (p. 184). Herbst and Mills effectively conclude that the NDP is now a dead duck.

The answer they come up with is for the ANC to ditch patrimonial politics, to rid itself of its dependence upon COSATU and to embrace the various free-market reforms they advocate. They portray the jobs crisis as a ticking time bomb, the danger being that the ANC will choose to ‘outmanoeuvre a nascent and militant, populist, left-wing critique and threat by increasing the state's interventionism and regulatory role’ (p. 188). If they do so, a fate similar to Zimbabwe's threatens. In contrast, pursuit of a set of policies which actually created jobs, rather than simply endorsing such a goal rhetorically, would be to the benefit of everybody – not merely business, but organised labour (which is faced by a shrinking pool of formally employed workers) but the ANC (faced by declining voter enthusiasm) as well.

This book's strengths lie in its clear prescriptions, its popular style, and its espousal of a lot of common sense. Its weaknesses lie in what it fails to discuss. What would be the consequences of releasing the regulatory brakes on the mining industry, a sector with an appalling record in so many respects, for the environment? What about the looming threat of global warming, and the prospect of acute water shortages? What about the huge dangers posed by the Zuma administration's embrace of a nuclear future for electricity generation? And how realistic is the prospect of a faction-torn ANC actually managing to reform?

Nonetheless, although it says little that is new, the book is welcome as throwing down a challenge to a political left in the country which is long on critique but rather short on policy alternatives. Hopefully, it will encourage the ‘critical self-reflection’ that the country needs from and by all its political constituencies.