South Africa needs freedom, not socialism

Electricity blackouts, still fresh in everyone’s minds, are a symptom of the manner in which socialism has failed SA’s people and inflicted untold harm upon them.

The apartheid regime was fundamentally socialist, appropriating all property belonging to black citizens and subjecting them to complete state ownership and control, while also exercising authoritarian control over whites with the political support of a small fraction of the total population.

National Party (NP) supporters embraced state control of the “commanding heights” of the economy; railways, harbours, telecommunications, steel production, electricity production and distribution, arms manufacture, oil from coal production and a great deal more. In addition to a large dose of conventional socialism, the NP resorted to National Socialism, which provides asset owners with the illusion of ownership but vests pervasive control over the economy in the state. Although ideologues attempt to separate two of socialism’s variants, National Socialism (called Nazism in Hitler’s Germany and fascism in Mussolini’s Italy), and communism, they both have as their underlying objective the centralisation of power in the hands of a ruling clique.

The NP played on the fears of its supporters by continually warning them of ‘swart gevaar’ (black danger) and what they called the ‘total onslaught’; the opposition to the entire fabric of apartheid from internal and external critics, the imposition of sanctions, and armed opponents attempting to unseat the government by force. According to the party, the activities of its opponents required steadily increasing power to be transferred into the hands of its leaders.

Professing to be fiercely anti-communist, the NP nevertheless established and expanded state-owned industries, forcibly transferred land from the people to the state, and extended its control over the operation of economic life in the country with a plethora of statutory controls, actions that were remarkably similar to those carried out by Vladimir Lenin after the Bolshevik Revolution. Later the party established ‘independent’ ethnic territories, incorrectly called ‘republics’ that were almost entirely financially dependent on the SA taxpayers for funds to pay government expenses. These collectivist actions lead to many years of economic stagnation in SA.

During the last gasps of its 46 years in control of government in SA, the NP introduced numerous reform measures, such as the repeal of race laws, relaxation of business licensing and other regulations, and even some feeble privatisation plans, so reducing its socialistic controls. The result was that by 1994 positive economic changes had already commenced, releasing the energies of SA’s black citizens by allowing them to participate more fully in the economy.

When the ANC took over in 1994 it discovered that government finances were in a shocking state due to the NP’s socialistic schemes directed at keeping itself in power. The ANC wisely replaced its own socialist plans, centred on nationalisation and large-scale welfare spending, with growth-oriented fiscal and monetary policies. The result was that it increased economic freedom overall and the first few years of ANC administration were golden years from which the economy continues to derive benefit.

Government policies in most countries are mixed, with citizens forced to carry the costs of political interference in their economic lives. Economies that function best are those in which it is the people, through their voluntary exchanges with each other, who determine economic outcomes. Government interventions prohibiting voluntary interactions that would occur in the absence of the prohibitions, or compel interactions that would not occur in the absence of compulsion, reduce spontaneous economic activity and harm the welfare of the people.

Socialism and racist political policies, as implemented by the NP, did the country untold harm, creating unnecessary bitterness and divisions between peoples, most of whom over the years displayed remarkable forbearance and an ability to get on extremely well with each other at a personal level. American philosopher, John Hospers, expressed surprise at the friendliness of black South Africans he encountered in the street during a 1983 visit to South Africa. Back in his home city of Los Angeles his black fellow Americans were anything but friendly.

Some of the policies recently adopted by the government contain national socialist tendencies. Several pieces of proposed legislation institute centralised control over the activities of firms, most notably those in the health care field. Such policies will not have positive consequences, either for the industries being subjected to the controls, consumers, or for the ANC’s 7 per cent economic growth target.

If the ANC really wishes to see the country achieve high growth, its best course of action will be to adopt policies that are more consistent with economic freedom as documented and measured in the annual publication Economic Freedom of the World (EFW). Commencing with an analysis of 53 countries in 1970 and now covering 141, EFW provides clear evidence that the most economically free countries provide the greatest overall benefits to their citizens. They have higher per capita incomes and higher growth rates; attract higher foreign direct investment; provide the poor with higher incomes than those in less free countries; rate highly on measures of human welfare such as lower rates of infant mortality and a lower incidence of tuberculosis, and assure citizens of greater political rights and civil liberties.

SA’s economic freedom rating improved substantially upon the achievement of constitutional democracy in 1994, reaching a high of 6.9 (out of 10) in 2003 and placing the country in the top 34 per cent of the 127 countries measured. SA’s 2005 rating was 6.8 but it then ranked only in the top 47 per cent of the 141 countries measured, largely because SA has been overtaken by other countries providing their citizens with greater economic freedom. Economic freedom has had much to do with SA’s improved economic performance since 1994 and citizens will pay dearly for any assaults on those freedoms.

Countries that have seriously attempted to implement socialism and communism through general state ownership and control have very poor records of delivering on their promises to citizens. Instead of freedom, higher productivity and a better life for all, they have provided totalitarianism, low productivity, widespread poverty, and violent subjugation of dissent.

Apartheid provided SA with a stark demonstration of the negative consequences of following racist, socialist and totalitarian-like policies. It is surely time for SA to enjoy the true freedom that Temba A Nolushungu described in his article Without freedom we have nothing – which means a non-racist society that gives its citizens civil liberties and economic freedom – freedom that will truly ensure a better life for all.

Author: Eustace Davie is a director of the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation.

FMF Feature Article / 05 August 2008 - Policy Bulletin / 04 August 2010

Help FMF promote the rule of law, personal liberty, and economic freedom become an individual member / donor HERE ... become a corporate member / donor HERE