Land EWC will halt development of black middle class – Anthea Jeffery

JOHANNESBURG — There is much scare-mongering around land expropriation without compensation in South Africa at the moment. While the ANC-ruling government has yet to decide on what direction it will take, it would be worth it for its MPs to read pieces such as the one below. If President Cyril Ramaphosa really wants a ‘New Dawn’, he’ll have to ensure that there is a sufficient level of private property rights in South Africa to bolster wealth creation. Without these rights, the black middle class may stagnate or even shrink in size. Ramaphosa needs to grow the black middle class to grow the economy and stay in power – he, therefore, needs to steer clear of spoiling their ascendency. – Gareth van Zyl

By Anthea Jeffery*

The ANC has never wanted to succeed at land reform. Rather, one of its key objectives has long been to ‘eliminate’ private property rights, so as to help shift South Africa from a capitalist to a socialist and then communist economy.

Dr. Anthea Jeffery is Head of Policy Research at the IRR and author of Patents and Prosperity: Invention + Investment = Growth + Jobs, published this week by the IRR and available on the IRR website.
Dr. Anthea Jeffery

Private property ownership is vital to success of a capitalist economy. It has to be destroyed if a future communist government is to have complete ownership and control of the means of production, as standard Marxist thinking requires.

In South Africa, this classic Marxist objective is being pursued under the rubric of land reform and ostensibly in order to provide ‘redress’ for past land injustices. There is no effective redress, however, in empowering the state rather than the disadvantaged individual.

Expropriation without compensation (EWC) is likely to result in the vesting of all land in the custodianship of the state – and will give the ruling party and its bureaucrats enormous powers. It will also prevent ordinary black South Africans from acquiring property, or retaining the individual rights that many already have.

One of the greatest apartheid injustices was that blacks were barred from buying land in rural and urban areas outside the homelands, where land continued to be held in customary tenure. That situation changed in 1991 with the repeal of the Land Acts.

Now some 8m blacks own their homes (as do some 1m whites). In addition, some 17m blacks in mostly former homeland areas have customary land use rights to the plots allocated to them by traditional leaders.

However, relatively few of these individuals have secure individual ownership, backed by title deeds. Land reform should primarily have aimed at giving these millions of black South Africans title deeds to their homes or plots, as the Constitution envisages.

But little has been done to achieve this. The ANC has no wish to develop an independent black middle class with a strong stake in the capitalist economy – for such a middle class is likely to resist any shift towards an inefficient and coercive communist system.

EWC feeds straight into the ANC’s ideological goals. Once EWC has been adopted, it can effectively be used to halt the development of a black middle class. It will also significantly impoverish property owners, both black and white, while turning them into tenants of the state.

In addition, EWC will bar the millions of black South Africans who already informally own homes and plots from obtaining full title to these properties. Where black people have not yet been able to acquire houses or plots of their own, EWC will prevent them from ever doing so. Effectively, it will reinstate the harsh prohibitions on land and home purchases of the apartheid era – the main practical difference being that these prohibitions will now apply to whites as well as blacks.

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Since 1994, the ANC has supposedly been working hard to overcome apartheid land injustices by focusing on land restitution and redistribution. Effectively, it has managed to sabotage both. Not enough revenue has ever been made available, while what little has been provided has often been squandered through inefficiency and/or corruption. State support for emergent farmers has generally been limited and ineffective.

Ideology has again played a key part, for land acquired by the state for restitution or redistribution has seldom been transferred into the individual ownership of emergent black farmers. Restitution land has instead largely been vested in communal property associations (CPAs), which are often riven by dissent and battle to function efficiently.

In recent years, land acquired for redistribution has deliberately been retained in state ownership. Since 2013 the State Land Lease and Disposal Policy (SLLDP) has expressly required that the beneficiaries of redistribution land be confined to leasehold tenure for decades, if not for ever. Because these farmers lack individual title, they cannot use their land as collateral to raise working capital. This, of course, makes it harder for them to succeed.

Read also: SA land debate clouded by misrepresentation, lack of data – UWC Prof

The SLLDP shows the fraud at the heart of current land redistribution policies. That same fraud is intrinsic to the EWC idea. EWC offers no redress for past wrongs. It empowers the state, not the individual.

Far from helping disadvantaged black South Africans to get ahead, EWC will deprive them of the individual property rights they already have or might otherwise have acquired. In doing so, it will turn them into hapless tenants of the state, continually dependent on the goodwill of parasitic party functionaries to retain the roofs above their heads or the ground beneath their feet.

Flag of the African National Congress (ANC)

The ANC is trying to pretend that EWC will be effective in helping the poor and overcoming the ‘original sin’ of land dispossession. It also implies that the economic freedom thus obtained will add to the political freedom already gained and helped turn South Africa into a prosperous ‘garden of Eden’.

In interrogating the validity of these ideologically-driven claims, South Africans would do well to ponder the prescient words of Austrian economist Friedrich Hayek in his bestseller book, The Road to Serfdom, published in 1944.

Wrote Hayek: ‘The system of private property is the most important guarantee of freedom, not only for those who own property, but…[also] for those who do not. It is only because the control of the means of production is divided among many people acting independently that nobody has complete power over us… If all the means of production were vested in a single hand, whether it be nominally that of “society” as a whole, or that of a dictator, whoever exercises this control has complete power over us.’

  • Dr Anthea Jeffery is Head of Policy Research, IRR. The IRR is a think tank which promotes political and economic freedom.
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