Competition Commission supposedly saves South Africans

2017-10-10 06:00

THE South African government is bent on saving defenceless South Africans yet again.

Economic Development Minister Ebrahim Patel, while addressing the 11th annual competition conference, said that South Africa faces growing challenges of “economic concentration” and “social exclusion”.

Far from defining the terms, the minister said the only way to solve these dire threats is for the government to increase its power; in this instance, the competition authorities.

Despite myriad government regulations and interventions in the economy, individuals and businesses in SA try their best to trade with each other and flourish. When a person or business charges less for their goods or services, they know what they are trying to do. They know that when they charge too much, they will lose business, but if they charge too little, their business will not survive.

Competition is the method by which consumers judge whether prices are “too high” — businesses will inevitably close if they ask too much of consumers.

Patel wants SA’s competition legislation to focus on the very structure of the economy. Because he does not think South Africans are innovative enough to compete both locally and internationally, he is advocating for immoral government intervention. Immoral because no one, not even so-called enlightened government ministers, may dictate what people must do with their money and with whom they may trade — that is the realm of voluntary transactions.

Whenever a minister talks about the need for the government to “save” us, either from a supposed dire threat or our own idiocy, no mention is ever made of the progress that South Africans have made since the end of apartheid. It appears that the economic progress made by black South Africans is not good enough.

Perhaps the assumption is that they would not have made any headway without the machinations of government.

No one will admit to this view, but it is the underlying philosophy of people who advocate for increased state power.

The South African economy has struggled to attain any notable growth over the past few years. There seems to be a reluctance to acknowledge that the state’s onerous regulations and political machinations exclude people from the economy.

Whenever the government interferes in the economy, it distorts prices. Instead of just focusing on trading and trying to make a profit, businesses must spend more on compliance costs and advisers to deal with legislation, which in turn means that to keep the prices of their goods and services within a range acceptable to the consumer, they end up with less money to spend on hiring more workers or increasing wages.

At what point will the government, led by ministers such as Patel, be satisfied that the level of competition is fair? By what standard do they measure fairness?

The only standard seems to be identifying the next target they may deem too big for its boots because it must have engaged in unfair practices, regardless of the lack of proof.

Some may cheer the social justice line adopted by the government, but they must remember that big government is always on the lookout for a new example that will uphold its policy, and one day that may well be big, black-owned businesses. After all, the only goal the government is after is fairness.

For the government to achieve its underlying philosophy to be the centre of every South African’s life, it needs to get rid of all potential competition. And that is why every South African needs to decide whether they really want to be free, or only as free as the government deems acceptable.

Despite the “social good” and “public interest” terms which are always left undefined, we must accept that people will trade and compete, that some will succeed and grow their businesses and others will not.

Those who succeed by offering us, the consumers, goods and services we need and can afford, grow in turn, and, instead of being attacked, should be praised.

• Chris Hattingh is a researcher
at the Free Market Foundation.

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