Let's Think

Time to get off high horses – save the country

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The formula for ‘radical economic transformation’ (RET) punted by the economic adviser of the Minister of Finance is not the only dangerously over-simplified notion for South Africa’s future in town.

Last week, almost un-noticed, the other extreme to the suggestions by professor Chris Malikane’s (the minister’s advisor) of wholesale nationalisation and state-ownership of the production resources – from agricultural land to mines and banks – flickered by in the news. It came in a media release by the Free Market Foundation  (FMF).

In the FMF release its executive director, Leon Louw, in a sarcastic turn of phrase “thank the President for realising that RET is exactly what South Africa needs.”

He goes on to suggest doing away with all restrictions in terms of, for instance, government spatial planning through zoning bylaws.

And, as far as smallholdings are concerned it “becomes the same as any other property transaction with no need to ask for ‘permission’ from government to subdivide agricultural land.”

The restrictions on subdivision of agricultural land has always, and should always be, about ensuring that, for the sake – amongst other, for food security – the viability of farming units is protected.

 Not only from some of the results of present land restitution programmes there are  examples of productive farms being destroyed. It also happened in the past where ‘market forces’ laid some of the best cropland in the country to waste.

From experience during a short stint as MEC for Land and Land Usage in the final days of the previous dispensation, the author can testify how over the years substantial tracks of some of the best land to produce crops along the banks of Vaal River – particularly below the Vaal Dam – was taken out of production.

Individual farmers were allowed, for the sake of raising fortunes, to subdivide their riverfront land, with huge irrigation potential, into narrow smallholdings with river fronts as short as 100 meters – to create the maximum units for sale.

Bar a few nurseries for garden plants and flowers, and a riding horse or two here-and-there, any form of farming completely disappeared from these areas, replaced by palatial residences for the rich – often as weekend retreats.

How such a situation can be reconciled with a notion of a totally free market dispensation serves the ‘greater good,’ is beyond comprehension.   

The situation that historically developed in areas like the Vaal Triangle, with its large dormitory towns like Sharpville where black workers could not even get ownership of their postage stamp-sized dwellings, is an extremely stark contrasts between the haves and have-nots only a few kilometres apart. 

For one, South Arica do not need – in fact, can ill afford – a repeat of similar mistakes with regards to matters like a productive use of land. And, secondly, to think that a free market, where maximum profit is the only motivation, will rectify the injustices of the past flies in the face of human nature.

Labour

What, yet gain briefly, features in the FMF statement is the notion that the cost of labour should be left to ‘free’ negotiations between the individual labourer and his/her prospective employer.

In the context of another free market purists’ argument that price should solely be determined by ‘supply and demand,’ the idea that in an environment of huge ‘over-supply’ of labour and acute shortage of job opportunities, worker and employer can negotiate as equals, is at best naive.

The same sort of argument come into play when Louw, without any qualification states: “Professional development is simple and reasonable without paternal government supervision. ‘Licenses’ and ‘clearance certificates’ would no longer be required (under a radically free market dispensation) for people to do something they are perfectly capable of doing without state interference.”

In such a situation, without ‘licensing’ and the like, how do you prevent a business from setting up operations, that dangerously threaten water-  and/or air prolusion in the middle of densely-populated areas – or for that matter, those grand smallholdings on the bank of a river created by subdivision for which no permission from no-one was required?

And, just imagine what such a situation will do to the much-valued goal of investor confidence.

Or, how does society, bar trial and error (with all the catastrophes/disasters in between), know that someone offering ‘professional service,’ like investor advice or physical health, is really quailed to render the service offered?

The absurd scenarios of the notion of just about no government regulation, punted by free market purists, can be multiplied by the hundreds. It will see society drift back into a primitive state of ‘survival of the strongest.’

Why have a government?

Society is, and was always, made-up of individuals and groups with competing, and often clashing interest. That is why we need responsible government.

Since we developed past the stage of domination by, and survival of the fittest, the function of government – especially under a democratic dispensation – is to balance and mediate compromises between these competing and clashing interests.

No country in the world has a perfect government, but some do a lot better than others. They are those that have what can be called “mixed economies,” striking a balance between freedom for the individual and groups to organise their lives and activities as they see fit, while protecting the vulnerable, assist the weak and serving the collected ‘greater good.’

It is time for the ideologues in South Africa to come off their holier than thou high horses, make compromises and accept there is indeed a ’great good’ than their own primary self-interest – be it maximum profit or unchecked political power.

At all levels of, and organisational structures of society, checks and balances is the only thing that stands between us and drifting back into the primitivity of survival of the fittest and the violent upheavals that will come with it.

by Piet Coetzer

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