Another contribution to the debate over nationalisation and the suggestion that ‘luxuries such as fashion, sport, hairdressing, entertainment and chewing gum’ should be nationalised.

Leon Louw is the Executive Director of the Free Market Foundation and now a regular weekly columnist to Business Day.   His latest column It’s better to nationalise fashion and chewing gum first appeared in Business Day yesterday and is worth reading.

Courtesy of Business Day here are some random extracts.

IT IS important to take the nationalisation debate as seriously as the debate about whether the earth is flat and rivers run uphill.   Nationalisation is where people who don’t produce wealth confiscate wealth from those who do and ensure productive assets become unproductive.

Calls for nationalisation baffle informed people who know that when things are in the hands of the state, they’re in a hell of a state.   They are especially baffled when nationalisers say they “care about the poor” yet ignore that the poor are better off in countries with less nationalisation.   The poor migrate in one direction only: from countries with more nationalisation to ones with less.

Proponents of nationalisation display three forms of perfectly rational behaviour: misinformation, self-interest and sadomasochism.   Some are decent people who do care about the poor.   They just don’t know enough history or economics to see through the seductive shibboleths that private enterprise “places profits above people” and “accumulates capital at labour’s expense”.   The second group is motivated by selfish interests and expects to join the state feeding frenzy with its patronage, privilege, power, status and corruption.   It’s inspired by having seen protagonists of “statism” rewarded with benefits from the bureaucratic empires they create.

When minerals were nationalised, investment, production, employment, exports, productivity and foreign-exchange earnings fell.   Do nationalisers want to nationalise mines so they can be run as inefficiently as government hospitals, post offices, railways and schools?   Since we’ve driven our great mining houses offshore or out of business, most mine shares are now foreign-owned.   Do they relish the idea of paying billions to foreigners, only to convert efficient enterprises into incompetent bureaucracies?   Or do they want to steal what’s not theirs, and turn us into one of the world’s pariah and failed states?   Maybe it’s unfair to suggest such perverse motives; maybe all they want is a country in which rivers run uphill.

Nationalise only what is unimportant, not housing, education, food, health and electricity, which should be privatised or outsourced.   Give the nationalised assets inherited from the apartheid regime directly to its victims as compensation.   Die-hard nationalisers can keep what is of less national importance, such as broadcasting, state theatres, beaches and wilderness areas, and nationalise luxuries such as fashion, sport, hairdressing, entertainment and chewing gum.