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By Eustace Davie of The Free Market Foundation
The FMF differs from most other organisations in that it is guided by constitutionally embedded philosophical and ethical principles. The guiding principles are worth remembering for use as guides in everyday life.
- All people have the right to life and the right to conduct it as they see fit, provided they do not impinge upon the similar rights of any person.
- Amongst the fundamental rights of all persons is the right to own and control property and the produce of their own efforts and to dispose of it as they see fit.
- No person or group has the right to initiate violence or the threat of violence against any other person or group.
- The only economic system consistent with these fundamental rights is a market economy, in a free unfettered market in which all persons are at liberty to deal with their property and conduct their affairs according to their own individual needs and motives.
- No resolution, recommendation or proposal that is inconsistent with the foregoing principles shall be adopted or proposed by the Foundation.
Ethics and the SA Constitution, Parliament, Government, and the Judiciary
If we had ethical behaviour in all branches of government, which would be achieved if they were following the rules set out for them in the SA Constitution, and they understood the requirement that they must abide by the Rule of Law, the country would not currently be experiencing the difficulties it is undergoing.
Government as an entity is supposed to be controlled by a system of checks and balances. However, the checks are not functioning as they should. Members of Parliament take an oath that they will uphold the Constitution. However, they have scarcely taken their seats when they set about attempting to undermine the body of rules they have sworn to uphold.
One of the most important tasks the FMF is attempting to perform, is to persuade government to abide by the Constitution and the rule of law in carrying out its functions. The FMF formed the Rule of Law Project to address this issue, which includes bringing the implications to the attention of members of the legal profession.
Private organisations, such as companies, privately owned bodies of every nature, voluntary associations such as the FMF and charities of every nature all have a similar ethical duty. It should not be so, but it is true that a higher ethical standard is demanded from the members of the private than from government institutions and their employees. The members of the private sector are expected to set an example for government institutions to follow.
Confusion over the nature of economic freedom
Philosophical opponents of the FMF constantly misrepresent the nature of economic freedom and the policies we are propounding. They ignore the mass of data accumulated over almost four decades in the meticulously researched Economic Freedom of the World (EFW) reports. Since 1980, these reports have been produced by Canada’s Fraser Institute with support from the Economic Freedom Network, which consists of more than 80 similar institutes based in as many countries.
The classical description of economic freedom provided by the main authors of the Economic Freedom of the World reports James Gwartney and Robert Lawson, is “Individuals have economic freedom when property they acquire without the use of force, fraud, or theft, is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. An index of economic freedom should measure the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions.”
This is the formula: Acquire property peacefully and legitimately without any form of force or dishonesty, protect people and their property from physical invasion by others, ensure that all exchanges are voluntary, and South Africa can start climbing up the world economic freedom ranking once again!. If the country could get back from its current 99th position in the world economic freedom rankings to 46th (South Africa’s rank in 1990) would start sharing rankings again with the likes of Italy 44th, Botswana 49th,, Albania 26th Chile 33rd and Estonia 8th.
Naturally, any country that makes dramatic advances in economic freedom would expect to see their citizens benefiting substantially through significant improvements in economic growth in GDP per capita. The growth or decline in GDP per capita is tested here by comparing the GDP per capita growth or decline of South Africa’s economy measured in Constant US World Bank 1990 US Dollars with four countries that have experienced similar swings in economic freedom ratings as South Africa’s, except that these four countries have achieved greater levels of economic freedom while South Africa’s economic freedom rating has declined substantially. The question being asked is, does it matter? Let us examine a sample of countries to judge whether South Africans should be working hard to improve South Africa’s ranking on the economic freedom chart.
Albania, Bulgaria, Chile, Estonia, and South Africa.
|Country||EFW rating 1990||GDP per capita in constant 1990 US$||EFW rating 2020||2020 GDP per capita in constant 1990 US$||Increase in GDP per capita in 30 years||Percentage increase in GDP per capita in 30 years|
|Albania||83||$ 2,549.7||26||$ 14,034.0||$ 11,484.3||450%|
|Bulgaria||99||$ 7,551.2||23||$ 25,293.7||$ 17,742.5||235%|
|Chile||27||$ 4,437.3||33||$24,808.4||$ 20,371.1||459%|
|Estonia||93||$ 6,468.2||8||$38,532.7||$ 32,052.5||495%|
|South Africa||46||$ 6,520.1||99||$13,517.8||$ 6,997.7||107%|
In thirty years, South Africa’s GDP per capita has remained static while the GDP per capita of Albania, Bulgaria, Chile, and Estonia have grown by multiples of their 1990 levels of GDP per capita. This is happening while the populations of the countries are growing. This means that South Africa in the last 30 years has increased the size of its population with growing numbers of people living at the same level of poverty that existed in 1990.
Meanwhile Estonia’s population has grown wealthier as its numbers have increased. This remarkable economic growth is not surprising given that Estonia has freed its population to the point where they now live in the eighth freest economy in the world according to the 2020 EFW rankings. The reason South Africa trails so badly in the economic freedom rankings is clearly visible in the South African policymaking. Allowing the entire population greater economic freedom while government concentrates on the core functions of government such as described earlier in this article is crucial to the future growth, health, and wealth of the nation.
*Eustace Davie is a Director of the Free Market Foundation. The views expressed in the article are the author’s and are not necessarily shared by the members of the Foundation. This article can be republished without prior consent but with attribution to the author.
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