BNC#6: David Ansara – State-proofing your assets from a failing government

David Ansara’s keynote speech at BNC#6 in Hermanus highlighted the failing South African state and the need for state-proofing strategies. He emphasized the root causes like state capture and ideological perpetuation by the African National Congress. Advocating for federalism and decentralised governance, he encouraged active resistance against the status quo. Practical measures included minimising tax exposure and supporting civil society organisations. Ansara stressed the importance of coordinated efforts for change amidst the collapsing state.

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Summary of David Ansara’s keynote address at BNC#6 in Hermanus

00:07 I usually listen to heavy metal music, so this is slightly different, but I like the name. My new favourite song. This idea of state-proofing yourself isn’t mine or the Free Market Foundation’s. It was coined by the business group Sarkylica, which has done interesting work around this concept. I want to give credit to them first. But.

00:36 The message I want to convey today is that the South African state is failing. Whether or not it has completely failed, I’ll leave that up to you to assess. Failure is a process, not necessarily an endpoint. Within this idea of the state failing, there’s obviously a crisis associated with those myriad failures.

01:06 It’s extended its tentacles into many areas in South Africa, involving itself in people’s private lives and economic choices. The consequences of state failures are dramatic. However, there’s an opportunity to rebuild and craft parallel institutions amidst the retreating state.

01:32 Let’s delve into the causes and consequences of state failure. The Free Market Foundation, representing classical liberal values, believes in limited government. The state’s role is to uphold individual rights, protect the rule of law, defend private property rights, and resolve disputes. But the South African state is failing on almost all these measures.

02:02 It’s failing to enforce private property rights properly, with proposals like expropriation without compensation violating these rights. The rule of law is also undermined, with a politicized judiciary and threats to legal systems.

02:30 What causes these failures? Fundamentally, it’s rooted in the African National Congress’ ideological framework, infiltrating governance and economic policy since the 1950s. State capture, cadre deployment, and policies like Black Economic Empowerment are pillars of this ideology.

03:57 State capture is deliberate, not a system bug. Cadre deployment and Black Economic Empowerment serve the ANC’s power and influence. Socialism’s failures are evident globally, yet persist in South Africa due to ideological perpetuation.

07:39 Big business in South Africa is complicit in many failures by providing cover for the government’s policies. Engaging with the government should involve demanding policy concessions rather than blindly supporting initiatives.

10:06 Rescuing South Africa requires sincere engagement with federalism, as a decentralized alternative to the current centralized system. Political competition and fragmentation are vital for democracy’s maturation.

11:22 Voting for change is one way, but not guaranteed. Engaging with federalism is advocated for a decentralized governance system.

12:20 Federalism must be pushed for actively, with bottom-up approaches encouraged. Decentralized governance preserves pockets of order against central government excesses.

15:43 As the state collapses, individuals must take self-empowering measures. Practical strategies include minimizing tax exposure legally, supporting civil society organizations, and embracing scalable solutions to state failure.

19:04 Financial strategies like offshore business headquarters and cryptocurrency investment offer alternatives to state-controlled systems.

20:29 Diversification of financial and geographic risks is crucial to avoid losses in a weakening economy.

21:27 There’s no point of no return. Coordinated efforts, scalable solutions, and active resistance against the status quo are essential for change.

22:33 Thank you.

*The above transcript has been condensed and paraphrased for brevity and clarity, and may not capture the full context or nuances of the original speech delivered by David Ansara at the Biznews conference, BNC#6.

Read the full transcript of David Ansara’s keynote address at BNC#6 in Hermanus ___STEADY_PAYWALL___

00:07
I usually listen to heavy metal music, so this is a slightly different, but I like the name. My new favorite song. So this idea of state-proofing yourself is not my idea or the Free Market Foundation’s idea. There’s a term that was coined by the business group Sarkylica, which has done a lot of very interesting work and thought around this concept. So I just want to give due credit to them first. But.

00:36
The message that I want to convey to you today is that the South African state is failing. Whether or not it has completely failed, I’ll leave that up to you to assess. Failure is a process, not necessarily an endpoint. And within this idea of the state failing, I think there’s obviously a crisis associated with those myriad failures.

01:06
extended its tentacles into a vast number of areas in South Africa and has involved itself in people’s private lives, its economic choices, and the consequence of state failures very dramatic. However, there’s also an opportunity there to rebuild and to craft a parallel set of institutions, ways of doing business.

01:32
and to take advantage of what is essentially the retreating state. So let’s just delve a little bit more deeply into the causes and the consequences of state failure. So the free market foundation, which I represent is a classical liberal organization, we believe in limited government and France Grenier earlier today, he spoke about the state, the acting as a monopoly on

02:02
legitimate violence and that is one definition of the state. But in our conception of limited government, essentially the role and purpose of the state is to uphold and defend individual rights. It is to protect and maintain the rule of law. That’s the opposite of rule by man, so that the laws in the country and within the legal system are applied equally regardless of…

02:30
your power or status in society. And there are some other functions like protecting the sovereignty of the country. Upholding and protecting private property rights is also a critical necessity for the state to play, and adjudicating and resolving disputes. But the South African state is failing on almost all of those measures. It’s failing to properly enforce private property rights. There are policy proposals.

02:58
such as expropriation without compensation, national health insurance, which are clear and objective violations of the private property rights framework. Private property rights sort of like being pregnant. You can’t be half pregnant. You can’t have somewhat private property rights. You need all or nothing. The rule of law is also being undermined. The Judicial Services Council, or the JSC, was established.

03:28
to essentially bring the judiciary under the political oversight of the Minister of Justice and the Judicial Services Commission, which elects jurists, is highly politicized and is often used to appoint politically-appliant justices to the court. So there are some real and grave threats to the rule of law in South Africa, which the

03:57
to defend this idea of the rule of law. As we all know, critical infrastructure is failing in South Africa, water, electricity or so. I don’t need to repeat all of those myriad failures. But what are the causes of these failures? So these are all symptoms. These are downstream from fundamentally the basic ideological framework of the African National Congress.

04:27
and its government. And Dr. Anthony Jeffrey will be speaking later on after the soiree about her fascinating book, Countdown to Socialism, which details very meticulously the way in which the national democratic revolution has infiltrated into almost every sphere of governance and economic policy and people’s everyday lives. And this is essentially a command and control philosophy.

04:56
which seeks to deliberately capture the levers of power of the state. The state is not simply a set of independent neutral institutions. It is an arena of political contestation and power, power grabbing. So this has a socialist roots going all the way back to the 1950s and 60s. And the Morogoro conference in Tanzania in 1969 is really when the ANC formally committed itself to this doctrine.

05:27
And there are other ideological struts within the African National Congress. African nationalism is a very strong impulse, but there’s also this…

05:40
use of the political positions to extract rents. And so there’s a rent seeking aspect to the governance, which is not entirely separate. But the point that I want to convey is that state capture is a feature. It’s not a bug in the system. State capture is very deliberate and cadre deployment is one of those levers that the ANC uses to extend its power and influence. And who was the chairperson?

06:09
of the cadre deployment committee of the ANC that was Mr Ramaphosa during the so-called state capture years. Black economic empowerment is also a fig leaf to conceal the capture of the private sector. Many big businesses in South Africa feel that they have their man in Pretoria representing their interests and access to the political class. But in fact, it is Pretoria’s man in their boardroom, making sure that they comply.

06:39
with the rules and edicts of the dominant political power in the country. So cadre deployment, state capture, PE is all the pillars of the National Democratic Revolution and I’ll let Anthea explain that in more detail. But Rob Hurshaw earlier today wondered aloud that with all the benefits that we’ve seen of the capitalist free market system across the world, wherever it’s been tried, it’s

07:09
It’s mostly flourished and wherever socialism has been tried, it has mostly failed. And it reminded me of a quote by Thomas Sowell, who said that, socialism in general has a record of failure so blatant, only an intellectual could ignore or evade it. I think it is the intelligentsia in South Africa that does a very effective job of still resurrecting this old redundant idea and we need to disabuse them of those ideas.

07:39
So another reason why we have state failure in South Africa, and it’s perhaps somewhat counterintuitive, but big business is complicit in many of the failures that we see. And why is that the case? Well, we see big business in South Africa through organizational bodies like Business Unity South Africa, basically providing cover for the incumbent government.

08:08
cleaning up the mess that is the result of policy failures and the policies are downstream from the ideology. So BUSA and its co-convener Adrian Gore recently very proudly announced the Resource Mobilization Fund, 170 million rand, which is being devoted, given to the government to assist with capacity building and technical skills.

08:37
This may seem like it’s within businesses’ interest to do this, to fix many of the problems that have arisen recently in key areas like law enforcement and infrastructure. But what this does effectively is give the ANC a free pass. And big business likes to say that it is apolitical, that in this sense it is very much involved in the political process.

09:07
That’s not necessarily something to avoid at all costs. If you are going to engage with government, don’t do it in a naive way. Understand that you as business have bargaining power, that you have resources, you have skills, and you can, instead of providing that support to the government, create alternatives as many civil society organizations such as Solidarity has done. Solidarity have realized that

09:36
There are many problems within the higher education system, for example, technical skills training, vocational training has badly deteriorated the disputes around language policy. So they’ve created SolTech, which is their own self-financed technical institution. So that is a good example of building power outside of the state. I think big business needs to recognize its bargaining power and demand.

10:06
policy concessions if it is to participate in these kind of round table partnership initiatives. So part of that is saying, okay, well, if you want help from us, then this is what we need. We need EWC off the table. We need NHI to be removed entirely. So you know, Mr. Gore very willingly participates in these public forums.

10:35
through BUSA, but NHI is still marching its way through the legislative process. So clearly there’s a fallacy of access that you think if I have a seat at the table, I can somehow influence the policy paradigm, but we haven’t really seen that working out.

10:54
So how to rescue South Africa from the current mess that it’s in? Well over the last two days, Alec has convened many of the political leaders from the opposition who have given very passionate accounts of their vision for an alternative in South Africa. And we as the Free Market Foundation, we’re an apolitical organization, we’re non-partisan, but we welcome the increase in political competition.

11:22
And I think that the fragmentation that we’re seeing in South African politics is a good thing. It creates quite a lot of noise and disorder in the system. But ultimately, I think it is part of the maturation process of South Africa’s democracy. So the one way in which you can turn things around is vote the rascals out and get in a new government. But how likely is that? Does the political arithmetic add up?

11:50
And I think the moonshot pact was so named because it is a bit of a long shot. So you cannot put all of your chips on red as, as for Craig said. So there are other mechanisms constitutionally. What we as the free market foundation would advocate is for a much more sincere engagement with the idea of federalism as an alternative to the current highly centralized.

12:20
system that we have in South Africa where Pretoria calls the shots. My speech that Alec referred to was called The Center Cannot Hold and it was referring to the speech by W.B. Yeats. Turning and turning in the widening gyre the center cannot hold. The anarchy is loosed upon the world, the best lack all conviction and the worst are filled with passionate intensity. And so…

12:47
The failures in South Africa are largely due to this high degree of centralization, that the policy failures in Pretoria and the rot that exists there emanates out into the rest of the country. And where there are existing pockets of value to be preserved and good governance in place, as we see around us today here in the Southern Cope, that needs to be preserved and protected against the

13:16
excesses of the central government. So federalism is the answer. But it’s not going to just happen automatically. You need to push for it. You need to fight for it. And you need to embrace, and this is a message to the DA, bottom-up federalism. Stop waiting for permission and start acquiring powers and justifying that retrospectively. So we were greatly encouraged to see this establishment of the law enforcement advancement program.

13:45
which is dealing with runaway crime in the Cape Flats in particular, where there are many victims of violent crime every weekend, it seems, but there’s a mass shooting on the Cape Flats. So visible policing boots on the ground through the Lee program is certainly a welcome development. And the attitude there, which I would support to say, well, if the minister of police Becky Pele doesn’t like it, we’ll invite him to try and shut this down.

14:14
That is the kind of attitude that we need to see more of. But the LEAP program in its current form can only do so much. The Western Cape government doesn’t have forensics capabilities. The SAPs, a ballistics unit is basically defunct. So if you don’t have the ability to successfully arrest and prosecute criminals, all you’re going to be doing is putting a bandaid on this bleeding wound. So there are many more examples.

14:44
where DA led governments can be pushing and acquiring many more powers. If you can’t acquire the port in Cape Town, then I would suggest build another port somewhere else and say, this is our port. And once that process has been triggered, very difficult to reverse. So decentralized governance is critical.

15:13
preserve those pockets of order is very important. So as the state collapses, it’s going to leave a vacuum and nature abhors a vacuum. And what fills that vacuum is up to us. It can either be the organized criminal syndicates or it could be a much more orderly deliberate process which is rule bound and which seeks to create liberty for the citizens.

15:43
of the country. So what are some of the more practical state proofing strategies that you can take in your own life? We want you to be self-actualized individuals. You are sovereign individuals with your own rights and your own agency, and the power really is in your hands. So one of the ways that you can deprive the national government of power is to avoid paying your taxes as far as you legally…

16:12
and possibly can, I’m not advocating for tax evasion, merely being smart about how you structure your business and personal financial affairs. And for example, and I gave this example in the speech that Alec mentioned, offshoring your business, headquartering your business in Mauritius, for example, which is a low tax jurisdiction, 15%, which has a double taxation agreement.

16:41
with South Africa, that is one strategy that you can pursue. I’m not a lawyer or an accountant, so you’d have to consult with the proper professionals on that. But there are ways of minimizing your exposure and certainly do not willingly give the money more money than it is already taking. So things like the Resource Mobilization Fund, I think are misplaced. And if you…

17:09
have your university included in your will in your estate for when you die, I would rather allocate that money to one of the many successful private colleges that is flourishing at the moment. So related to what I was saying earlier, big businesses must stop supporting the government. They have more power by withholding their collaboration and recognizing their bargaining power.

17:37
We would encourage you to support civil society organizations, several of which are here today. There’s the Free Market Foundation, which I represent. Solidarity, I mentioned, the Institute of Race Relations. AUTA is also here today. AfriForum. These are all organizations that are building capacity on the ground. Gift of the Givers. When a national disaster strikes, who do you call? Do you call the South African government or Gift of the Givers? I think I would, I know what my choice would be.

18:07
So another organization which I mentioned is Sokolika and their slogan is to provide scalable solutions to state failure. And I think scalability is something that we need to think quite seriously about. I was delighted to see that GoSolar has covered the business conference and we’ve had uninterrupted electricity supply. And when you fly into Johannesburg or Cape Town,

18:34
What do you see below you nowadays? Glistening array of solar panels on the roofs of houses. But essentially those are modular solutions. Those are individuals covering their own energy needs. What we need is scale. We need a regulatory and legal changes that can remove barriers to entry so that large businesses, investors can come in and provide electricity. For example, water. There’s no reason why that couldn’t be privately provided as well.

19:04
And so really the only obstacles are legal ones. Um, and those can be changed with sufficient pushback. Uh, Sarkozy itself is involved in upgrading the security of the entry, uh, highway, um, we mentioned some, uh, financial matters, uh, given the debasement of currencies around the world, um, the United States dollar is still a, um,

19:33
widely recognized as a global currency, but it has been debased systematically since the global financial crisis. We see the emergence of cryptocurrencies. Again, I’m not a financial advisor, but cryptocurrencies, particularly Bitcoin, are immune from state censorship, government control. It’s a decentralized public ledger and represents an alternative store of value.

20:03
The medium of exchange aspect still has a long way to go, but developments like Lightning Network and et cetera will help to increase the liquidity of those markets. And we have seen Bitcoin ETFs coming on board. So the South African rand has been weakening precipitously for the last couple of decades. And essentially, it’s like having your savings as blocks of ice and you’ve put all your

20:29
your blocks of ice in a bag and they’re all melting because you’re losing at least 6% of the value of your money every year. So diversifying yourself, spreading your risk, I think is what I would recommend, and spreading your geographic risk as well. Avoid concentration risk in South Africa. But the most important thing to avoid is defeatism.

20:58
in order to succeed. So allowing those failures of governance to persist and allowing hostile policies to destroy your business or your way of life is something worth resisting and something worth fighting for. But I would leave you with this message that there is no point of no return. We have seen many countries, for example.

21:27
in Asia, in Eastern Europe that have been under the iron boots of communism for decades. And once they unshackled themselves, once they broke free of those systems and embraced liberal free markets, they were able to flourish as societies. And so there is no point of no return, but it’s not going to happen on its own. It needs coordinated effort. It needs scalable solutions to state failure.

21:56
and it needs an understanding that the status quo simply isn’t working and needs to be actively resisted.

22:33
Thank you

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