Freedom, not policy, is the key to SA’s economic revival: Andrew Kenny

Key topics:Economic growth requires minimal government interference in the economy.Scrapping BEE, labour laws, and minimum wage is urged to empower the poor.China and other nations’ growth cited as results of economic liberalisation..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.The auditorium doors will open for BNIC#2 on 10 September 2025 in Hermanus. For more information and tickets, click here..By Andrew Kenny*.It is easy to get economic growth; there’s nothing to it. The winning formula could not be simpler. Every time in history, all around the world, wherever it has been tried it has always worked. There has been a spectacular example recently, raising hundreds of millions of people out of poverty. To get high economic growth, the government’s only necessary action is complete inaction. It must do nothing. It must leave the people alone to trade and do business among themselves as they wish.Most political parties agree, the ANC reluctantly, that the only hope for the desperate South African economy is economic growth. Only economic growth can lessen our catastrophic unemployment and our mass poverty. Some parties disagree on how to get economic growth. This is not because they don’t know how to get it; it is because they hate the simple measure necessary for doing so.The simple measure is to set the people free. Allow everybody, including the poor, to join the economy – the formal economy. Scrap all BEE laws, scrap all the laws about affirmative action, employment equity and “transformation”, and end cadre deployment. All of these policies oppress poor black people. Scrap our burdensome labour laws and allow even the poorest people to employ or be employed as they please. Scrap the wicked minimum wage, which would prefer poor people to starve to death rather than accept a low wage that would feed them. Allow a poor but enterprising black person to employ other poor black people at whatever wages both parties agree to; allow them to start up their own companies easily and run their own businesses as they please. Allow them to sell cheap goods to the poor black people in the townships.The apartheid government came to power in 1948 and immediately started passing racial laws whose only intention was to ensure white minority rule. The main victims were poor blacks. The ANC government came to power in 1994 and immediately started passing racial laws whose only intention was to enrich the political elite. The main victims were poor blacks. To a considerable extent, ANC rule has been Apartheid Part 2. In both cases, the economy did reasonably well at the beginning of their rule and then the destructive effects of their horrible laws set in to wreck their economies. The economy has never done worse than under President Ramaphosa, himself immensely rich, who has passed one destructive law after another, including the amendment to the Employment Equity Act and the Draft Mineral Resources Development Bill, which will destroy jobs and stop investment in this country..Exactly as talented.What should the ANC have done in 1994 to make the economy grow and all our people healthy, happy and prosperous? Just get rid of the horrible apartheid laws. That’s all. That would have been by far the best way of “redressing the injustices of the past”. Black people, rich and poor, are exactly as talented as whites with exactly the same gifts of enterprise and initiative. They had been denied opportunities and rights in the past. Left to themselves they would rapidly have overcome their past oppression, as other people had done, some having suffered worse oppression.It is racist and patronising to suggest that black people are innately useless and must have special help through affirmative action, DEI and all the other wretched policies of the elite to further themselves. In 1994, the ANC inherited the strongest industrial economy in Africa, with a well-developed infrastructure, the world’s best electricity supply, good water and sanitation, and a nucleus of engineering, technical, financial and commercial skills.All that was necessary to advance it into a strong industrial economy was just to set the people free. The ANC did not do this. The economy is in ruins now but it could still recover, it will still recover, if only the ANC finally sets our people free.Many countries have done just this, and always they have seen rapid economic growth. The most spectacular example is Communist China. From about 1980 China saw unprecedented economic growth, with a massive advance in manufacturing, producing an ever-increasing stream of ever-improving manufactured goods that sold around the world. China became the second greatest economic power in the world (after the USA).Hundreds of millions of people were lifted out of poverty. The man responsible for this extraordinary progress was Deng Xiaoping, who became the Chinese leader through a complicated process in 1978. Deng is one of the great heroes of the 20th Century. But how did he do it? How did Deng perform what seemed like an economic miracle? If you read through the official history, you get all sorts of nonsense about “Four Modernisations”, “cats catching mice”, and so on. You get the impression that the Chinese Communist Party played an active role in developing a modern capitalist economy in large parts of China.Exactly the opposite.It did exactly the opposite: it retreated and allowed the Chinese people to do whatever they wanted to do. The people, not the party, made China prosperous (at least in the parts where the people were allowed to do so). Deng’s achievement was in leaving them alone.In 1947 China became a Communist Republic under Mao Zedong. All parts of everybody’s life were controlled by the state, and the state was controlled by the Communist Party, and the Communist Party was controlled by Mao Zedong. Private property, capitalism and the market were banned. Whatever you did, wherever you were, there was a Communist Party official looking over your shoulder.The result was grinding poverty and the worst famines in history – man-made famines – worse even than Stalin’s, killing over fifty million people, starving them to death. Naturally the “left-wing”, “progressive”, Western university elites thought this was wonderful and praised Mao to the skies. In the Cultural Revolution, Mao turned activists among the people against any party officials who might criticise tyranny. He thereby humiliated and alienated a national network of party officials. Mao died in 1976, leaving China in ruins, worse off than she was in 1949 when he took power. Deng took over.By then the Communist Party officials, sickened by Mao’s tyranny, had retreated from people’s lives. The people on the farms and in the factories were set free. They began to farm and make things and trade among themselves and do business among themselves to the full extent of their genius and enterprise. Party officials looked the other way. So did Deng. This brought on the most completely free capitalist society in history. No labour laws, no minimum wages, no trading restrictions, no red tape. Next time in your local hardware shop, when you buy a cheap Chinese tool of high quality you should pay homage to Deng Xiaoping, the man who set the people free.Unfortunately, the Chinese Communist party only set some of the economy free. Some remained in the hands of the Party and this has mainly – not always – been a calamitous failure. Worst of all seems to be the state’s housing policies, which now darken the prospects of the Chinese economy.Throughout history, there has always been a battle, often a fatal battle between those who want to trade and do business and those who want to stop them. When the former wins, the economy prospers; when the latter wins, the economy falters. In North Korea, the Communists, who always want to stop people doing business, won; the result destitution and even starvation – except for the tiny ruling elite. In South Korea, the capitalists won; the result a booming economy and prosperity for all. In Singapore and Taiwan, the capitalists won, and so there was prosperity.Looked down their nosesIn England, progress was similar. Throughout English history, kings and barons looked down their noses at people who traded and did business. From 1348 there were a series of “Black Deaths”, of terrible plagues that wiped out a third or more of the European population. This drastically changed economic relations between those who owned land and those who provided labour. Suddenly labour was more valuable than land. In a free market, the farm labourer could now command far higher wages. This the king would not allow.In 1351 King Edward III passed the Statute of Labourers, which made maximum wages compulsory. It became illegal to offer or accept wages higher than the state decreed. It was a logical inverse of modern minimum wages, both of which want to deny a free market in labour. Fortunately for England it was mainly ignored but it did lead to mounting discontent among the common people and eventually to the Peasants’ Revolt in 1381.Despite their brutal methods, the common people who rose up against their masters were simply asking for a free market in labour, something which if it had been granted would have catapulted England at least two centuries forward towards prosperity. From about 1700, financial and technical conditions in England brought on the greatest revolution in history, the Industrial Revolution, where rampant capitalists and liberated engineers came together to change the world for the better.Nobody describes their shattering success, their colossal productivity and their breaking all the chains of lords over their serfs better than Karl Marx in his Communist Manifesto. Unfortunately Marx, having wonderfully described the astounding ability of capitalism to make the economy grow and liberate the people, then went on to devise a system that would crush capitalism, enslave the people and resort to worse poverty and starvation than ever happened in the Middle Ages.It is not just the ANC but white university professors who favour BEE, rigid labour laws and minimum wages. University academics are far more likely than the population at large to be Marxist. It has always been so. University academics by their nature tend to feel superior to everybody else, to be snobbish, to look down their noses at those in business and especially the working classes, whom they pretend to sympathise with but whom actually they despise.They love the thought of Lenin, whom they imagine, not wrongly, to be drawn from people like themselves, telling everybody else what to do and killing them if they don’t do so. White professors of political science and sociology, and some in law and even some in economics, will come up with all sorts of spurious reasons why it is better for black working-class people to die of starvation rather than accept a wage that would feed them but which the highly paid white professors disapprove of.Minimal stateThe success or failure of a country comes down to its government. Too little regulation, and you have anarchy. Too much regulation and you have tyranny. The ideal state is the minimal state.North and South Korea have the same people, the same natural resources, the same geography and the same history. In one, the state controls the people; the result is economic stagnation and starvation. In the other, the state sets the people free; the result is economic prosperity and good health.All the ANC has to do for economic growth and prosperity is to set the people free.*Andrew Kenny is a writer, an engineer and a classical liberalThis article was first published by Daily Friend and is republished with permission

Freedom, not policy, is the key to SA’s economic revival: Andrew Kenny

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