Riaan Salie | Writing Fellow | African Liberty | Free Market Foundation | mail me |
The Economic Freedom Fighters (EFF) leader, Julius Malema has threatened Pick n Pay with ‘militant action’ if a third meeting request is ignored by the company. He has alleged that franchisees are exploited and treated unfairly by the retail company.
Militant action threatens 85,000 jobs across 1,795 stores during South Africa’s toughest economic crisis. Consumer inflation increased to 7,8% at the latest reading, electricity tariffs are planned to increase by 38%, and soaring fuel costs frustrate citizens.
An attack on the foundation of economic freedom
Ironically, the EFF are assaulting the foundation of economic freedom – secure property rights – by bullying private business owners into toeing their ideological line. The first ‘non-negotiable pillar’ of the EFF is to ‘expropriate land without compensation’ (EWC), which highlights the anti-private sector attitude of the EFF.
Countries with strong property rights have an average GDP per capita of 3,098% and an annual income of 1,272% higher than those countries with the weakest property rights.
Contrastingly, since 2018 South Africa experienced a capital flight out of the country, because of political sentiment that land needs to be expropriated without compensation; Foreign Direct Investment (FDI) fell by 15%, in 2019. So the EFF’s threats to ‘shutdown’ private companies, on a whim, threatens to destabilise property security, crash investments and unravel democracy.
The nations which EFF leaders hold in high regard are vanguards of oppression, starvation and economic annihilation. Zimbabwe, Cuba and Venezuela all expropriated land without compensation. In March 2020, Zimbabwe’s annual inflation had risen to 676%, Cuba’s inflation is expected to exceed 400%, and Venezuela’s sits at 500% in 2022.
Political gangsterism
The EFF’s 2021 election slogan, ‘Land and Jobs Manje’, should rather read ‘Hyperinflation and Starvation Manje’, since at the core of EFF ideology sits EWC which lies as the very foundation of economic annihilation. Despite the EFF’s promise of ‘Jobs’, their actions have shown them to be the biggest enemies of job creators.
In 2018, H&M stores were trashed after the EFF leadership decreed the company should be ‘shutdown’. In 2020, one Clicks store was petrol bombed and others trashed after similar calls. Now it seems that Pick n Pay is the next target of this political gangsterism.
Although the Eighteenth Constitutional Amendment failed to pass in 2021, the EFF’s alternative form expropriation is to force businesses to bend to their will or face ‘shutdown’.
In early 2022, the EFF confronted various businesses about the nationalities of their employees, presumably to ride the wave of nationalist populism engulfing South Africa, cementing the EFF’s anti-business attitude and branding them as divisive opportunists.
Political interference in the private sector is a feature of colonialism and socialism. In 1537, the Spanish led by Juan de Ayolas penetrated South America and made contact with the Guaraní people, who had an agricultural based economy without centralised political authority. They were subsequently overpowered by the Spanish who centralised labour, natural resources, and political power. Similarly, the EFF coerces business owners to accept their terms or face ‘militant action’.
Notwithstanding, South Africa is a constitutional democracy where the rule of law, supposedly, applies equally to all. Yet political gangsterism hides behind a smokescreen of the ‘right to protest’, without it being balanced with the ‘right to be free from violence’, the right not ‘to be deprived of freedom arbitrarily’ and not to ‘be deprived of property except of law of general application’.
Worryingly, politicising the private sector damages investor confidence and causes FDI to plummet. In the case of Brazil, President Jair Bolsonaro has triggered an exodus of investments amid his political interference in oil firm Petrobras. CEO Roberto Castello Branco announced a return to managing the company according to market economics. Bolsonaro’s political meddling has extended to the Brazilian supreme court and has triggered fears of undermining democracy.
In conclusion
Likewise, by allowing the EFF to continually ambush businesses, unchecked, to cede to political demands society endangers the private sector of being overrun by political opportunists, making South Africa no different from cartel-influenced Mexico.
In a democracy, businesses that operate outside of the wellbeing of consumers are punished by the market. Similarly, where businesses break the law, legal recourse is readily available.
However, members of parliament who earn more than the average South African ought to understand basic economics and surely a semblance of the law. However, the EFF’s political figures are proving to be an outright exception to that rule. With embarrassing political theatre, every few months, to fight for political relevance.
Outside of EWC, the new expropriation has arrived in the form of political meddling in the private sector, unchallenged, leaving business owners to fend for themselves against a divisive political firestorm. That will destabilise property security, crash investments and unravel democracy.
