4th August 2011

By Vivian Abit Atud

Since 1994 the South African government has set some admirable goals to grow the economy and extend benefits to the majority of the people. Yet, for many South Africans, this ideal of a better society is still a dream.

Many people, even those in government, are worried about the increasing ineffectiveness of government and its failure to meet its stated objectives. One of the most worrying aspects is that so many of our young people are unemployed and the possibility of them ever finding employment is very dim.

South Africa’s labour force participation rate is 54.1 per cent, but this is totally negated by the fact that the unemployment rate, measured according to its wider definition, which includes people who have not recently attempted to find work or have stopped looking altogether, is an alarming 36.5 per cent. Calculated according to the narrow definition of unemployment, 25.0 per cent of the country’s potential labour force is unemployed. The most frightening part is that almost three-quarters (72.3 per cent) of the unemployed are young people between the ages of 15 and 34 years.

Government has been trying hard to come up with solutions to the country’s social problems. It has initiated many programmes and increased government spending in all areas of the economy. An indication of the extent to which government has grown is evident from the increase in government expenditure as a percentage of GDP, from 24.2 per cent in 2001 (R233.5bn) to 28.6 per cent in 2009 (R848.8bn), an increase of R615.3bn unadjusted for inflation.

Many people do quite well if left alone. For example, in one community, the municipality started out in 2001 to identify housing requirements for the people of the area. Earlier this year, in 2011, government, at last, was ready to get the project off the ground and start building the houses. But what did amazed government officials discover? That the people they had identified as in need of housing had gone ahead and constructed their own homes. And, what is more, they found that the houses these individuals had constructed for themselves were far better than the houses government could offer them.

Government officials and politicians need to recognise that people, when allowed the liberty to make their own choices and decisions, can achieve their personal objectives without waiting on a helping hand from government. Imagine how much more these people would achieve if the economy were free and everyone could negotiate and bargain for a job and an income to suit their needs.

The Interests of South Africans would best be served if every adult were allowed the freedom and responsibility to choose his objectives and the means for obtaining them.

Government should limit its interference in the lives of individuals. It should confine itself mainly to maintaining law and order, thereby preventing people from harming each other and enforcing agreements (contracts) voluntarily arrived at. If government put such a system in place, each person or family would enjoy the maximum opportunity to work, earn a living and acquire property that they could manage or dispose of as they see fit.

In 1994, South Africa was characterised by a black population, the broad definition of which includes Indians and coloureds, that was, as a rule, poverty-stricken and economically marginalised. Since the transition to democracy, the government has sought ways to rectify the skewed economic profile of South Africans. A vast body of legislation, policies and charters in various sectors of the economy have been introduced since 1994 – instruments such as the Employment Equity Act 55 of 1998 and the Broad-Based Black Empowerment Act 53 of 2003 and numerous other acts. However, it is not possible to have liberty for some and not for others in the same country. Whilst blacks were being oppressed by apartheid, the liberty of whites in South Africa was being compromised by the measures necessary to suppress the aspirations of their fellow citizens. For personal liberty to prevail the law should treat everyone the same; there is no liberty for one unless there is equality before the law for all.

Various opponents of the apartheid system agree that it was liberty for all that they fought for, not the opportunity to seek compensation for past wrongs, or to discriminate against any other racial or cultural group. For individual freedom to increase in South Africa, the government must focus on its primary role which is to protect the freedom of individuals within human society. Belief that ‘government should provide’ is the beginning of The Road to Serfdom, as made clear by Friedrich Hayek in his famous book with that title.

Personal freedom and South Africa’s challenges will not be overcome by government providing handouts to the poor, or implementing socially divisive racial quotas disguised as ‘demographic representivity’. They will be overcome when citizens, protected by government from force and fraud, can freely engage in uncoerced and voluntary exchanges. Once this happens, South Africa will develop, and all of its people will benefit.

AUTHOR Vivian Abit Atud is an economist with the Free Market Foundation. This article is syndicated through AfricanLiberty.org