Prosperity and Capital

There has been very little manifest appreciation for the private sector since the end of Apartheid, especially from the government and its civil society allies. Indeed, very recently Irvin Jim, General Secretary of the National Union Mineworkers SA, released a statement and declared on public television, opposite free marketeer Leon Louw, that workers were simply being exploited by greedy CEOs, and that “the revolution must be taken to the streets” to combat this ‘racist capitalist’ system. The fact that these workers would not be employed, nor have transport to and from work, nor have food on their tables without ‘greedy CEOs’ who pursue profit, completely escapes Jim.

This in particular saddens me, given how obvious South Africa’s progress since that heinous system of racial segregation ended, has been squarely down to the efforts of the private sector: South African individuals and companies. The government has done much good, but it is incomparable to what has been achieved outside of the statist framework. Unfortunately, though, it has increasingly become the trend for government to try and break down what the private sector has achieved.

One such example is the National Health Insurance scheme proposed by the Department of Health. The government arrogantly tells taxpayers to ‘not worry’ about how the scheme will be funded, and that we must focus only on what it intends to achieve. How much contempt must the government have for its employers to condescend in such a manner? Not only that, but the Health Department believes that there are ‘too many’ private medical insurance schemes in South Africa, and therefore the State will ‘rationalize’ them, reducing their number.

All throughout their proposal document, the government brags about how the NHI will reduce citizens’ reliance on private health care (which is considered to be some of the best in Africa) because they will not have access to ‘free’, ‘quality’ state care. As to be expected, the government expects all South Africans to pay increased amounts of tax to fund the scheme, and does not allow anyone to opt out of payment, regardless of whether or not they are happy with their private scheme.

However, perhaps the most worrying is the government’s apparent hate of private education. As it chips away at institutional autonomy of public universities, the Higher Education Department is also refusing to grant accreditation to private universities which do not toe its ideological line. In Gauteng, the Provincial MEC for Education has made threats against private schools for the very same reason. Of course, they base their hate on private education on the fallacy that only wealthy whites have access, completely ignoring the fact that the vast majority of private school pupils in South Africa are black.

This, not even touching on the government’s ignorance of economics, which holds that the more competition there is in a particular sector (including education), the higher the quality and the lower the cost will inevitably be. But because the government and its socialist allies are stuck in a nineteenth century Marxist intellectualist mindset, they think it is an injustice that private individuals and companies would pursue their own interest (profit). They couldn’t care less for the fact that everyone else, including and in particular, the poor, also benefit from the ‘greed’ of the wealthy.

What South Africans have not yet realized, and must realize eventually, is that the government is not a ‘helping hand’. Governments were instituted for an exclusively (and arguably still legitimate) violent purpose; and that was to keep the people from hurting each other. To do this, the government had to be violent: restrain the people and keep the peace. The government, as a concept, was never intended to be a domestic servant, an office assistant, a parent, a mentor, a friend, or an inspirational leader. But we have, naively, given government the power to try to be these things, much to the detriment of society. We should not be as quick as to ask “what is government doing about this?” or “how can this be allowed by government?” Externalizing our individual responsibility onto the government has had and will continue to have devastating repercussions for development.

We need to return to individual responsibility and the tried-and-tested working rules of economics. We have the capacity for it, and as the private sector has shown continuously, the willpower as well! We have built schools without the government’s ‘help’, we have built clinics, we have built homes, and we have built the most innovative tools and gadgets that have simplified life tenfold since the middle of the previous century.

But before any of this can happen we need to abandon the emotional ‘social justice’ narrative currently dominant our civil society. A distinctively socialist concept, social justice activists believe that prosperity will follow from regulating and taxing the private, enterprising, sector out of existence. These activists have gained support by doing one thing and one thing only: appealing to emotion. They often reject logic and reason as ‘white constructs’, and instead rely on emotional narratives to get their points across. South Africans have been manipulated emotionally, much to the detriment of the poor.

The evidence is there: the most prosperous nations, which have fewer natural and human resources than South Africa, have the freest markets and governments which stand back and allow individuals and companies to produce unhindered. The Asian Tigers, Scandinavia and tiny Estonia are all examples of this. Some of these states have massive welfare infrastructure, yes, but which is balanced with a very business-friendly regulatory environment. (We cannot have our bread buttered on both sides.) These states would do even better if they reduced their welfare states, which would inject untold amounts of wealth back into the economy.

If we stand on principle and think logically (not emotionally), our prosperity follows as a matter of course.