Tag: Free Market Foundation

It is often purported that the road to hell is paved with good intentions. My online debate with South African Modern Monetary Theory (MMT) advocate, Buddy Wells, made me think about this wise saying. Mr Wells, of whom I have grown fond since our first interaction on X and who has been nothing but cordial in our debates, argued that following the policy prescriptions of MMT, the SA government can issue more currency to build more schools and employ more teachers.

Modern Monetary Theory (MMT) is an economic framework that proposes that countries that control their own currency can issue new currency to meet the needs deemed necessary by the government. Theorists argue that governments should issue currency to create jobs for the unemployed, to narrow the gap in wealth inequality.

We cannot tax our society into behaving better. No matter how much we would like to believe otherwise, it remains ineffective. Behaviour-adjusting taxes, like sin taxes on alcohol and cigarettes, have failed to curb excessive smoking or drinking. The sugar tax has placed a heavier financial burden on the working class. However, it has not achieved its intended behavioural change.

The tragic deaths of children exposed to harmful chemicals from foreign-owned spaza shops have highlighted the need for regulations. As we push for more regulations, we must ensure that we do not harm ourselves in the process. Various legal philosophies shape one’s understanding and interpretation of the law.

The first notable initiative in government by the Inkatha Freedom Party (IFP) – South Africa’s second oldest existing federalist institution – has been to centralise spaza shop regulations under the central government. The xenophobic dimension is less surprising.

Consumer benefits in mergers should be the central consideration when evaluating whether a merger enhances or harms the market for consumers. The Competition Tribunal recently blocked a merger between Maziv and Vodacom, two major players in South Africa's telecommunications sector.

South Africa relies on a single machine to produce driving license cards, which is downright ludicrous. In November 2021, an electrical fault caused the machine to break down. Repairs took two months, increasing the license backlog by over a million.

Austerity does not need to mean suffering. Cutting public spending is urgent to address South Africa’s growing debt. Delaying cuts will only worsen debt and interest payments, making future cuts more severe. Reducing spending needn’t harm South Africans, as many wasteful expenses can be removed. In 2023, the Democratic Alliance (DA) estimated that the African National Congress (ANC)-led departments wasted around R40 billion in 2022/23 alone.

South Africans should be terrified by the continued discussion of the possible nationalisation of the South African Reserve Bank (SARB). While the Economic Freedom Fighters (EFF) welcome the discussion, and support putting the institution under total control of government, rational individuals should be supporting more independence and autonomy for the SARB, not less.

One of the greatest inventors in human history was Thomas Edison, often called the “Wizard of Menlo Park.” In fact, one of his innovations is used to illustrate individuals coming up with new ideas - the lightbulb. Similar bulbs were in use but unreliable and he came along and changed how things were done, making bulbs less pricey and more reliable.