On June 30, one of the greatest men in the history of classical liberalism celebrated his 90th birthday.
Thomas Sowell stands as one of the greatest thinkers in the tradition of individual rights and economic freedom, of pushing back against the ever-controlling grasp of a stifling central government. Given South Africa is in the midst of the Covid-19 lockdown, with little hope of where we can turn for growth in the future, there is no better time than now to discover the works of Sowell, and advocate for the ideas he holds.South Africa’s GDP contracted for the third straight quarter – the latest numbers from Q1 2020 are in. We can be 100% sure that the numbers won’t look any better for Q2, as that was the time the country was deep in hard lockdown. In our desperation, we must not fall into the trap of thinking that government throwing money at a problem is the long-term solution to that problem. Government spending does not lead to adequate wealth creation – not the kind of enterprising wealth creation South Africans need to be free to pursue.
While much social commentary is used to discuss inequality in South Africa, one of the actual problems facing many people is grinding, endemic poverty. With little hope of employment, never mind of creating their own businesses, we should reconsider whether the focus of government policies should be to combat inequality, or if it would not be better for government to remove all the barriers to employment and growth that it has placed in the way. Inequality is, after all, always a factor, but not necessarily a problem, in a free society where people make different choices.
South Africa has an official unemployment rate of over 30%. South Africans, especially the youth, are priced out of the labour market because of high business operating costs (an anti-small- and medium-business environment) and because of barriers that increase the cost of hiring them. The national minimum wage is illustrative of the artificial barriers imposed by government.
On unemployment, Sowell wrote in his book Basic Economics: A Common Sense Guide to the Economy: “In country after country around the world, those whose employment prospects are reduced most by minimum wage laws are those who are younger, less experienced or less skilled.”
As is always the case, government policies that are intended to help some people end up hurting those very same people. It is time that we judge government policies by the pain and devastation they cause, not by their supposed noble intentions.
Part of what Sowell’s work helps one understand is that a paternalistic attitude on the part of government inhibits the ability of people, based on how much the government presumes it needs to do for them. In South Africa, where the overwhelming majority of poorer people are black, the government enacting burdensome labour regulations sends the signal that it does not consider some people capable of finding work, and indeed creating their own work, based on the colour of their skin. For as long as the attitude of paternalism and all-controlling government continues, no one can attain their full potential.
One of my absolute favourite quotes from Sowell is: “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”
Given we are in the midst of a recession, and with projections that the government debt-to-GDP ratio will exceed 100% in the next few years, now is the perfect time for us to realise that, no matter the most flowery of promise from any politician, it is an impossibility for the government to provide for every single need every person has.
Where there can be debate and decisions on basic necessities, we have to understand the contemporary context of South Africa, and that the best way for more people to obtain more goods and services is for the market to be as free as possible. More players should be able to enter, compete, lower prices, and better cater to what people consider important to them. Politics is inherently about deciding what current resources should be distributed in what particular manner. The discipline is always backward-looking, not focused on the future and how more could be created. The more politics filters into our lives, the less room for us to push and try, to think and act, to innovate and create and trade.
How do we turn things around in South Africa? How can people take ownership of their lives, and take back control from a government that has steadily destroyed what hope there was for economic growth and progress?
If we are truly serious about changing course, we need to abandon the ideas of socialism and government controls that have led us here, and adopt the ideas advocated by thinkers such as Sowell: the ideas of freedom.
This article was first published on City Press on 6 July 2020