In virtually every metric, free-market liberalism is more conducive to human prosperity and environmental sustainability, not to mention individual liberty and dignity. So why does it get such a bad rap, asks Martin van Staden.
In the midst of the transition from apartheid to democracy, the then CEO of the Institute of Race Relations, John Kane-Berman, prophetically noted that defending liberalism was about to get more difficult than it was during the authoritarian rule of the National Party.
Intuition tells us that with a liberal Constitution and the victory of liberal democracy over communism around the world, the opposite should have been true. Yet, today, in 2019, 25 years after South Africa became a democracy, liberalism is still misunderstood, misrepresented and maligned.
The latest instance of this is Jeremy Cronin's column titled "No excuse for Zille's hatchet-job analysis of state capture". While the column is evidently mostly about Helen Zille, my interest is in the offhanded remarks at the end of his article, where he writes that the anti-apartheid liberalism of Helen Suzman and the Black Sash is to be welcomed, but the "vulgarised" liberalism of "the likes of the Free Market Foundation", is not, apparently because of the "ecocidal implications" of free markets.
The Free Market Foundation (FMF) was founded in 1975, explicitly in protest against the policies of the apartheid regime. While the National Party lauded itself on being a defender of the free enterprise system, this was nothing but a ruse to warm itself up to Western powers in the context of the Cold War. Instead, the National Party government was very much engaged in what the FMF called "creeping socialism". This was evident with the multitudes of agricultural and industrial control boards, fixed prices, group area laws, restrictions on land usage, broadcasting control and a host of other illiberal, anti-market practices.
But most importantly, the FMF objected to what has turned out to be apartheid's greatest crime against humanity: The denial of property rights to the majority of South Africans. This is why, in the 1980s already, the FMF was actively lobbying the government of PW Botha to end the tyranny of leasehold in peri-urban townships and replace it with unambiguous, titled ownership. Botha and his anti-market government refused, until circumstances forced the Nationalists in the early 1990s to adopt the Upgrading of Land Tenure Rights Act and slowly start titling urban land. This process continues – painfully slowly – today, with the FMF's Khaya Lam (My Home) land reform project trying its utmost to facilitate the process.
The FMF's mission has remained consistently simple and liberal from 1975 to today: to free ordinary South Africans from the usually arbitrary, sometimes capricious, and always ignorant whims and preferences of politicians and bureaucrats, and allow them to make decisions for themselves, so long as these decisions do not hamper the same right and ability of others to do the same. We pursued this mission knowing that liberalism was not only the only morally legitimate philosophy by which to govern society, but that it was also the most utilitarian. Without exception, throughout history and today, where markets are freer from government interference, prosperity is greater.
Compare, for instance, every annual edition of the Fraser Institute and FMF's Economic Freedom of the World index with every annual edition of the Human Development Index, and you will see the same result: Countries with stronger protections for private property rights and free enterprise tend to have lower levels of poverty. The most striking instance of this phenomenon is the fact that in those countries that have the highest level of economic freedom – the freest markets in the world – the poorest 10% of the population is about eight times wealthier than the poorest 10% of the population in those countries with the lowest levels of economic freedom – the most-regulated markets in the world. In other words, the poor fare best where the market is free.
This brings us to Cronin's point about environmental destruction.
The tragedy of the commons is the phenomenon where natural resources are depleted or destroyed because they are owned or possessed in common, meaning there is no discernible owner. When we use things that we do not own, we tend to use them more recklessly with a view to maximising short-term, immediate benefit. In sixteenth-century England, for instance, farmers overgrazed their cattle on "common" pastures.
In contrast, when dealing with resources that we own, we use them with a view to maximise our long-term, sustainable benefit. Thus, in England, the overgrazing stopped when private property rights were introduced into the equation. This is also why endangered species are better protected as private property: Their owners know that if the specie dies out, so does any possibility of them drawing profit from that specie.
Animals that are today endangered did not get to that point because they were hunted to the point of extinction on private game farms, but because they were hunted to the point of extinction on so-called public property, like South Africa's national parks. While private game owners might profit from making their property available to be hunted, they will seek to maximise the game's population (thus averting extinction) for the sustainability of their enterprise. And this is done in their own self-interest. As Michael Rieger points out, environmentalism is profitable.
It is also interesting to note that it was after the fall of the communist Soviet Union and the Warsaw Pact in 1990 that the new countries, especially Estonia and Ukraine, reduced their carbon emissions by some of the highest rates in the world – 39.4% and 70.4% respectively. Self-described socialist economies like Venezuela, Laos, China and Vietnam, on the other hand, increased their emissions between 59.3% and 927%.
In virtually every metric, free-market liberalism is more conducive to human prosperity and environmental sustainability, not to mention individual liberty and dignity, than any other system. Even the Scandinavian countries which are today lauded by socialists have some of the freest markets in the world, and their massive welfare states are built on centuries worth of virtually-unbridled economic freedom. Liberalism around the world, and particularly in South Africa, must continue to be seen in that light.
- Martin van Staden is Head: Legal Policy and -Research at the Free Market Foundation and is pursuing a Master of Laws degree at the University of Pretoria. He is author of The Constitution and the Rule of Law (2019).
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