The Left Has No Interest in Understanding Economics

Rational Remarks, bonds, economics

Jimmy Manyi, the guy who said South Africa should return to parliamentary sovereignty, tweeted this gem:

Monopolies are bad, but state-owned monopolies are good because… well… they just are!

South African Airways, Eskom, and SABC have drained the South African people of billions upon billions of rands, have gone through countless ‘turnaround’ strategies (to the extent that they have drunkenly fallen over), and are continuously in the middle of some or other scandal. On the other hand, private companies (‘white monopoly capital’) have provided services and have survived in the market because their customers were happy with their performance.

What more can be done to drive this point home? Basic economics at South African high schools, universities, and countless articles in the popular media convey the importance of incentives on a daily basis. Every person, at his core, understands that he will only do something if there is something in it for him. He understands that others also behave this way (it’s simply human nature) and that corporate structures, government included, also follow this basic principle. And since state-owned enterprises cannot be liquidated in a substantive private law sense, government’s incentive to provide a service is skewed. If our SOEs could be liquidated, we wouldn’t have any SOEs!

This argument is so simple and easy to understand that it leaves me baffled that people like Manyi, no doubt intelligent, just miss it entirely.