26 December 2019 - Jimmy Ramokgopa
“Economic freedom in our lifetime”… how often have you heard this phrase? What is “economic freedom” and what does it actually mean? A glance through Google might come as a surprise to many, especially those who have associated economic freedom to socialism.
Most of the available literature on “economic freedom” have little or nothing to do with socialism. In fact, it has everything to do with socialism's prime nemesis - liberalism. By definition, economic freedom is one’s ability to participate in the active economy. The freedom is founded on principles of free markets, free trade and private ownership. Basically, one has “economic freedom” when one is able to participate in the active economy without unreasonable restrictions or prohibition of property rights - which is in actual fact, a liberal concept.
According to the Fraser Institute’s Economic Freedom of the World 2019 Annual Report, economic freedom “is based on the concept of self-ownership. Because of this self-ownership, individuals have a right to choose - to decide how to use their time and talents to shape their lives. On the other hand, they do not have a right to the time, talents, and resources of others. Thus, they have no right to take things from others or demand that others provide things for them. The cornerstones of economic freedom are personal choice, voluntary exchange, open markets, and clearly defined and enforced property rights.”
So why have South Africans adopted a socialist narrative to economic freedom? Rhetoric and slogan politics, that’s why. One would be surprised by the number of people who don’t know what economic freedom means to them. Some will describe it as socialism, or refer to communist principles, ending with a laughable “therefore” statement of what they believe economic freedom is. Of course, everything has its context, and the concept of “economic freedom” has a particular meaning to some, even when it makes no sense at all to those who generally apply their minds.
I suspect that the call for economic freedom was amplified by the old cliché that “democracy brought political freedom, but not economic freedom.” This statement is actually true, since the majority of people living in poverty do not have access to the active economy, and as a result of that, cannot exercise their “economic freedom” through free trade or private ownership of anything. The Economic Freedom of the World Report also shows that countries that have more “economic freedom” (by liberal standards) are more prosperous, such as New Zealand, Switzerland, the United States of America and Ireland, to name a few. Countries with little or no “economic freedom,'' such as Iraq, Egypt, Syria, Democratic Republic of Congo, Angola, Algeria, Sudan, Libya, and, lastly, Venezuela, show fewer signs of prosperity. So, of course, considering our socio-economic situation, it is clear that South Africa is in desperate need of economic freedom, but clearly not the “Malema-nomics” type of economic freedom.
With the above put into consideration, I think we can all agree that the only reason we find ourselves in this quagmire of poverty, unemployment and hopelessness is that, indeed, economic freedom has not been delivered to the people. But, economic freedom can become actual reality if and only if all citizens of this country have access to the active economy. When citizens are able to trade, leverage assets, and generate wealth for themselves and their families, we will have economic freedom.
With that said, in South Africa’s context, we have to start by making the economy more accessible. This needs to be done by undoing the injustices of the past, without compromising the liberal principles that have proven to be successful in the development of prosperous countries. In other words, we need a non-zero-sum-game development of those who do not have access to the economy so that they too can exercise their economic freedom as much as others can.
- Jimmy Ramokgopa (@JimmyRamokgopa)
BSc. Engineering (Civil) - University of the Witwatersrand
Businessman - socio-economic and political commentator
Activist - The Collab Movement