Book extract: South Africa’s socio-economic problems and their broader detrimental consequences may seem insurmountable, but they are not. The situation can be turned around
Simply implementing policy reforms that enhance individual liberty and respect the supremacy of the private sector in creating wealth and generating employment would be like waving a magic wand.They need to focus instead on empirical evidence that irrefutably explains the glaring discrepancies between high-growth, prosperous economies and poor economies characterised by low growth and economic decline.
Yet they implemented massive socialist housing programmes, established state-owned enterprises, introduced a communist-style autocratic government and told citizens whom they could live with, marry and sleep with, and where they could be buried. Through rational self-reflection and acknowledging the realities and facts around me, I gradually gravitated away from socialist thought.
From this, the following facts emerged: more than 850 million people lifted themselves out of poverty, while the 88% poverty figure in 1981 fell to a statistically negligible 0.7% by 2015, according to the World Bank.Logic tells us that if what we are doing is incurring negative consequences, the best course to follow is to stop doing it.
The reason for the improvement was that the people of South Africa were doing what they had been prevented from doing for many decades, they were cooperating freely with one another in multiple fields of endeavour. South Africa’s Constitution determines that there is to be no discrimination on any grounds, including race. These requirements have been brushed aside, which has sullied the freedoms that were gained in 1994.
The chosen course was unfortunately what economist Gordon Tullock called “welfare for the well-to-do”. In almost all cases, the pursuit of their goals characteristically entailed great risk and sacrifice. People are by nature acquisitive and hence have an insatiable desire to realise and progressively work towards greater returns for their endeavours on a perpetual basis.The unintended consequences of confiscatory policies will inevitably be to discourage or negate investment and demotivate capital formation as the disincentives cause investors to explore alternative markets.
The free market is sufficiently dynamic as to spontaneously expedite various permutations of ownership of the means of production and the production of wealth. The pursuit of confiscatory policies threatens productive individuals’ and enterprises’ legitimate rights to the fruits of their labour. The International Property Rights Index , published by advocacy organisation Property Rights Alliance, measures the strength of physical property rights, intellectual property rights and the legal and political environments that enforce them.
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