The exploitation of citizens by business is a lesser threat than the abuse of public wealth by government but this does not mean a rejection of the role of the public sector.
These are some random extracts from a column in Business Day, published for the first time today, by Itumeleng Mahabane, head of Brunswick South Africa, entitled Time to put the ‘private capital is evil’ idea to bed. Business Day kindly allows me to include extracts on my blog but the entire column should be read by clicking here – Business Day.
“In any country in the world, most people rely on jobs to accumulate wealth, educate their children, build lives of dignity and fulfil as many of their aspirations as they can. In almost any country you can think of, it is business and private capital that has been pivotal in creating those jobs. Without business and private capital, almost no country can hope to create a decent life for its citizens. Any country with the level of socioeconomic development most South Africans aspire to will undoubtedly have a strong business sector.”
“If you believe this, and it is difficult to see how any rational person would disagree, then we should all be concerned about SA’s ability to create a decent life for all, because it seems the dynamics in this country are convincing more and more South Africans that business is undesirable and to be tolerated at best.”
“If we accept this argument, then you have to reach the conclusion that there is little logic in demonising business, which is the most effective force for creating broad-based, individual economic wellbeing.”
“Logic then dictates a more simple and pragmatic concern: ‘How do you promote the proliferation of business while providing appropriate safeguards for citizens?’”
“However, in a country such as SA, it is clear that providing safeguards for citizens should be targeted as much at the public as the private sector. The government’s abuse of public wealth is a bigger threat than the exploitation of citizens by business, especially given the frameworks in place in SA. It is deficiencies in public-sector monitoring and enforcement that leave citizens vulnerable to the excesses and illegalities of actors in the public and private sectors.”
“SA cannot continue to pursue a misplaced and misinformed ideological battle against business and private capital. Instead, we need to embrace them and to appreciate the catalytic and transformative power of entrepreneurship, innovation and market dynamism. This need not negate looking at different price and allocation mechanisms to broaden the development of economies. However, we must then be honest and appreciate that there are certain considerations to asking someone to drive a 24-wheel truck, as it were, for lack of a better metaphor on attempting to condition an economy.”
“We also have to finally accept the reality that broad-based wealth is not an overnight solution. After two decades of improbably high growth, including doubling the size of its economy in the past six years, China remains a poorer country than SA. Transforming an entire country takes time. Central to that transformation is the immutable fact of the centrality of business and private capital.”
“Karl Marx was right about certain structural habituations. He was also wrong about a great many more. Business and private capital are critical to SA’s economic development and good business can be a force for good. South Africans need to develop a more mature response to this fact. This column should not be read as an ideological rejection of the role of the public sector.”
“Itumeleng Mahabane is absolutely correct when he says that without business and private capital, almost no country can hope to create a decent life for its citizens (Time to put the ‘private capital is evil’ idea to bed, May 9).
Itumeleng Mahabane is absolutely correct when he says that without business and private capital, almost no country can hope to create a decent life for its citizens (Time to put the ‘private capital is evil’ idea to bed, May 9).
Private capital investment creates businesses that make profits and in turn provide jobs which generate tax revenues. Everything that governments do for their citizens is paid for by taxes, which are raised from people with jobs in the private sector. Public servants’ taxes are nothing more than taking money out of one pocket and putting it into the other.
Governments prefer to take credit for what is seen as their contribution to infrastructure, education, health, etc, but in fact this is paid for by the taxpayers. It suits the government to denigrate the private sector on the one hand but then request support for initiatives to prop up the results of its own failures. Businessman Cyril Ramaphosa has been applauded for his “adopt a school” initiative yet he belongs to the ruling party whose bad policies, corruption and inadequacies caused the problem in the first place.
The government’s primary economic role is to create an environment in which the private sector can flourish. This includes less government intervention, legislative certainty, lower taxes, low inflation, sound money, rule of law, security of property rights, an independent judiciary, as well as impartial courts.
If it wasn’t for the private sector and the risk-taking of capitalists there would be no jobs and no taxes so it’s about time that we laud their contributions to the upliftment and advancement of society.”
These are some random extracts from a column in Business Day, published for the first time today, by Itumeleng Mahabane, head of Brunswick South Africa, entitled Time to put the ‘private capital is evil’ idea to bed. Business Day kindly allows me to include extracts on my blog but the entire column should be read by clicking here – Business Day.
“In any country in the world, most people rely on jobs to accumulate wealth, educate their children, build lives of dignity and fulfil as many of their aspirations as they can. In almost any country you can think of, it is business and private capital that has been pivotal in creating those jobs. Without business and private capital, almost no country can hope to create a decent life for its citizens. Any country with the level of socioeconomic development most South Africans aspire to will undoubtedly have a strong business sector.”
“If you believe this, and it is difficult to see how any rational person would disagree, then we should all be concerned about SA’s ability to create a decent life for all, because it seems the dynamics in this country are convincing more and more South Africans that business is undesirable and to be tolerated at best.”
“If we accept this argument, then you have to reach the conclusion that there is little logic in demonising business, which is the most effective force for creating broad-based, individual economic wellbeing.”
“Logic then dictates a more simple and pragmatic concern: ‘How do you promote the proliferation of business while providing appropriate safeguards for citizens?’”
“However, in a country such as SA, it is clear that providing safeguards for citizens should be targeted as much at the public as the private sector. The government’s abuse of public wealth is a bigger threat than the exploitation of citizens by business, especially given the frameworks in place in SA. It is deficiencies in public-sector monitoring and enforcement that leave citizens vulnerable to the excesses and illegalities of actors in the public and private sectors.”
“SA cannot continue to pursue a misplaced and misinformed ideological battle against business and private capital. Instead, we need to embrace them and to appreciate the catalytic and transformative power of entrepreneurship, innovation and market dynamism. This need not negate looking at different price and allocation mechanisms to broaden the development of economies. However, we must then be honest and appreciate that there are certain considerations to asking someone to drive a 24-wheel truck, as it were, for lack of a better metaphor on attempting to condition an economy.”
“We also have to finally accept the reality that broad-based wealth is not an overnight solution. After two decades of improbably high growth, including doubling the size of its economy in the past six years, China remains a poorer country than SA. Transforming an entire country takes time. Central to that transformation is the immutable fact of the centrality of business and private capital.”
“Karl Marx was right about certain structural habituations. He was also wrong about a great many more. Business and private capital are critical to SA’s economic development and good business can be a force for good. South Africans need to develop a more mature response to this fact. This column should not be read as an ideological rejection of the role of the public sector.”
The following letter by Gail Daus-van Wyk, Free Market Foundation, appeared today in Business Day and comments on the article referred to above.
Praise private sector
“Itumeleng Mahabane is absolutely correct when he says that without business and private capital, almost no country can hope to create a decent life for its citizens (Time to put the ‘private capital is evil’ idea to bed, May 9).
Itumeleng Mahabane is absolutely correct when he says that without business and private capital, almost no country can hope to create a decent life for its citizens (Time to put the ‘private capital is evil’ idea to bed, May 9).
Private capital investment creates businesses that make profits and in turn provide jobs which generate tax revenues. Everything that governments do for their citizens is paid for by taxes, which are raised from people with jobs in the private sector. Public servants’ taxes are nothing more than taking money out of one pocket and putting it into the other.
Governments prefer to take credit for what is seen as their contribution to infrastructure, education, health, etc, but in fact this is paid for by the taxpayers. It suits the government to denigrate the private sector on the one hand but then request support for initiatives to prop up the results of its own failures. Businessman Cyril Ramaphosa has been applauded for his “adopt a school” initiative yet he belongs to the ruling party whose bad policies, corruption and inadequacies caused the problem in the first place.
The government’s primary economic role is to create an environment in which the private sector can flourish. This includes less government intervention, legislative certainty, lower taxes, low inflation, sound money, rule of law, security of property rights, an independent judiciary, as well as impartial courts.
If it wasn’t for the private sector and the risk-taking of capitalists there would be no jobs and no taxes so it’s about time that we laud their contributions to the upliftment and advancement of society.”