It is easy blame the ‘market’ for all the ills and woes in South Africa when attention needs to be given to government policy.   It may be debatable whether it is the labour laws that are the problem or the false understanding and interpretation of the laws.   But there is  no doubt that millions of young South Africans are condemned to a life without hope of ever finding gainful employment.   Citizens should be free to choose their own terms of employment and their true representatives because these are core indicators of economic freedom (see below).

Leon Louw, the executive director of the Free Market Foundation, now writes a weekly column of Business Day.   His latest contribution Labour crisis is a failure of the state, not the market was first published earlier this week and courtesy of Business Day here are some random extracts after summarising the core principles of economic freedom.

Five core principles of economic freedom

  • The rule of law, including effective and consistent law enforcement, due process and natural justice.
  • Freedom of association, including the right to form, join or leave labour, business and other organisations.
  • Freedom of contract, including the right for associations and individuals to transact freely with each other;
  • Property rights, referring to owners’ dominion over their property.
  • Consent, meaning that nothing should be done to anyone or their property without their consent.

MARIKANA was inevitable, predictable and a consequence of the persistent failure to enforce the rule of law.   It has become the iconic manifestation of our labour crisis, which is characterised by reluctance to enforce the law, wildcat strikes, property damage, violence and killing.   To add to this dangerous cauldron, most young people in SA have never worked and have no prospect of employment.   The lesson to be learnt from the youth uprising against apartheid and the “Arab Spring” is that we should be fearful of discontented youth.

Organised labour is in the government through the tripartite alliance, which means the government has been constrained from policing labour because, to an increasing degree, it is labour.   In a normalised society, organised labour is part of civil society, not the government.   Democracy needs the separation of labour and state just as it needs the separation of church and state, business and state, army and state, and aristocracy and state.

It is labour law, not organised labour, that discriminates against non-parties, small business and the unemployed; that limits with whom workers and employers may or must negotiate; that condemns 7-million compatriots to the indignity and destitution of unemployment; that reduces by well more than 100% the number of workers joining unions; that makes it a “buyer’s market” in which workers and unions are weak, and small business and the unemployed weaker still; that renders the government as an employer the worst victim of its own policy.

Centralised bargaining should, like the right to vote, be a right, not a duty.   Compulsion and the imposition of private agreements on non-parties is the antithesis of labour freedom.   The degree to which centralised bargaining is being undermined by Marikana and related lawlessness is largely attributable to dubiously conceived and enforced law.   As such, the labour crisis represents government failure rather than market failure.