Thursday, January 20, 2011

Socialism and (A)Effects


Think twice before plunging SA into a frenzy of state ownership

Published: 2011/01/20 06:58:53 AM

DON’T get me wrong. I hold no brief for capitalists, nor do I bear a hatred of socialists, for that would run against the grain of a true liberal democrat. But it has to be admitted that capitalism is an amazing engine that creates wealth and jobs, adding more value to all aspects of human welfare as measured by the human development index.

I also have no problem with leftist dogma as long as it is confined to infantile student rebellions.

But when political leaders who bask in the glory of capitalist gluttony start talking about nationalisation, I am tempted to portray socialism as an effigy of hell. "They disguise plunder, cleverly concealing it from all eyes, even their own, under the seductive names of fraternity, solidarity, organisation and association", as 19th-c entury French economist Frederic Bastiat described such leaders.

We Zimbabweans are the modern- day test tubes of socialist carnage. I have first-hand experience of how leftist ideologues experiment with political doctrines that subvert human dignity.

Consider the destructive "land nationalisation" — a crude ideological brand that has left us licking our wounds in an inaccessible part of the food-security dungeon. Thus, I have good reason to fear the state.

When socialists talk about "nationalisation" or "state control", they always portray an abstract scenario in which the fate of citizens is in the hands of a purportedly "loving, responsible government". Full -blown socialism tends to blossom into "Hugo Chavez -type" authoritarian dictatorship. The state, which has at its disposal a formidable arsenal and "law", tends to use coercive measures as a legitimate extension of its mandate. That "great fictitious entity by which everyone seeks to live at the expense of everyone else", says Bastiat of the state. Like US economist Murray Rothbard, I do not see how a government can successfully nationalise anything without being the aggressor that violates property rights.

Let’s face it, all human beings are social animals but not all act like animals in the negative sense. The frightful thing is that the ruling socialist elite has animal instincts — the survival of the fittest spiked with an insatiable desire for self-aggrandisement.

In my country, we were under a Marxist-Leninist spell that has accounted for all social, economic and political ills: 1-billion-percent inflation; 4- million citizens in exile; not one free and fair election in 30 years; hospitals closed due to a lack of electricity, water and drugs; 4000 citizens dispossessed of their land for "historical reasons".

If Karl Marx conceived socialism, Lenin perfected it, Stalin and Mao Ze dong gave it teeth and Zimbabwe’s Zanu (PF) packaged it.

My message to SA is that collective ownership, whether state-sponsored or co-operative, is a fallacy that promotes noncommittal behaviour, cronyism and corruption. It’s like a village well or a public toilet. No one is in charge, so no one cares, except vagrants.

Where there is a lack of private property, innovation is suppressed because there is no personal reward associated with hard work and the legitimate accumulation of assets. State intervention is largely driven by political or narrow business interests. SA’s Reconstruction and Development Programme (RDP) is nothing but vote- buying by the African National Congress (ANC) government. If it is on the ANC’s election manifesto, it will ride on the emotions of the "peasants" to justify plundering the fiscus in the name of the "common good".

Basic national economic theory dictates that socially driven budget deficits are a result of an over commitment to nonproductive activity. This "crowding out" effect manifests in a shortage of capital, high interest rates and a declining investment.

Besides, true ubuntu is a sense of pride and completeness in the ability to do one’s "own things" without uMalume (uncle) always tapping you on the shoulder. So if uMalume (the government) is going to build your house, create jobs, subsidise your school fees, pay your hospital bills, subsidise your electricity bills and build your roads, he obviously wants your vote in return. Socialism takes away freedoms. This has been proved wherever socialism has been implemented. You owe the state a favour. A large body of unemployed, complacent, urban peasants in a permanent state of expectation is slowly created. It is what the ANC Youth League refers to as a "time bomb".

When Economic Development Minister Ebrahim Patel refers to a "New Growth Path" that "does see a role for a strong and focused state, but we see the biggest job creation will come from sectors where the private sector has the key levers", it is reassuring.

Blogger Dave Shell puts it better: "Governments do not create jobs, people create jobs. What government is mandated to do is to provide the space within which individuals with vision and energy and a desire to roll up their sleeves and get down to work can create wealth for themselves and those whom they employ and the country as a whole." Yet it seems President Jacob Zuma , hounded by his left-leaning partners, has little room to manoeuvre.

But SA is luckier than Zimbabwe because the Convention for a Democratic SA left a legacy of honest debate. However, if it is true that the Congress of South African Trade Unions, the ANC Youth League, the South African Communist Party and all their leftist sympathisers determine who rules SA, SA may well experience another "refined" form of nationalisation.

There are 35-million South Africans who want bread on the table, so they ought to think twice before plunging the country into a frenzy of state ownership. Central and provincial governments must play a "limited" role as regulator. Laws that encourage freedom of investment, ownership and innovation should be their focus.

People must appreciate the difference between political manifestos and reality. Private sector-driven industrialisation encourages full employment and an expanded working class that pays taxes, buys property and saves money to drive domestic capital. Small- scale industry grows the middle class that supports consumption and manufacturing. Social safety is possible only when the fiscus is healthy. Corporate social responsibility encourages investment that prioritises housing, health, environment and social welfare.

What happened to the RDP, the Growth, Employment and Redistribution plan and the Accelerated and Shared Growth Initiative for SA? My answer: governments don’t deliver, they devour.

- Ngwenya is the Zimbabwean founder of the Coalition for Liberal Market Solutions.