It is nearly 30 years since the collapse of communism in Eastern Europe and the Soviet Union. It is also nearly 250 years since the end of the American Revolution and the independence of American patriots from oppressive British rule.
What followed was the ushering in of an era unparalleled in individual advancement – human wealth, living standards and general happiness. This was made possible by a regulatory adherence to the principles of free markets and liberalisation of individual rights.
Ronnie & The Iron Lady
One would think that the rest of the world had learned one obvious lesson from this – that free market economics offers the best means for societal advancement and upliftment. To an extent, this was the case: Eastern Europe has never regressed to the socialist regimes of old and is certainly freer and more economically inclusive than pre-Berlin Wall collapse.
Across the Western World in the 1980’s and 1990’s saw deregulation become fashionable, notably by the late British Prime Minister, Margaret Thatcher and US President, Ronald Reagan. Not for nothing did ‘Reaganomics’ and ‘Thatcherism’ enter the political lexicon. Thatcher and Reagan were particularly adept at privatising formerly state-owned industries and curbing trade union power, two
This era of popular market liberalisation saw a concomitant explosion in individual wealth in the Western world, with immigrants from other parts of the world streaming into the U.S.A and Britain seeking ‘the American Dream.’
Communism-Styled Money and Banking
However, a few decades into deregulated markets and supposed unfettered capitalism – the populace became increasingly aware of a distinct tendency for those in Finance and Banking to be living (and earning) like modern day kings, without much consequence to any damage inflicted on the American taxpayer – a la Bank Bailouts of 2008.
This appeared to be in stark contrast to the ideals of modern-day capitalism, which espoused equality of opportunity, fairness, and objective legal accountability for a person’s actions. In short, there was an ever-widening gap between Main Street and Wall Street – it appeared that there was a class of people in society that benefited disproportionately from this heralded new political system and whose actions went without recourse.
It is therefore no surprise that in the years following the financial upheaval of 2007-08, social democrats, socialists and “reformed” communists are pointing to liberalisation and free markets as the culprits for all that bedevils economies — claiming that these caused the bubble and subsequent Great Recession.
This is simply wrong. Although capitalism may have flourished in certain sectors of the economy, there is a crucial sector which never saw the freedom, but instead saw ever-increasing State control and central planning – to the point where Statism has never been larger. That is in the field of money and banking, or as we like to call it: Commie-style Monetary Systems.
Under this system, governments and central banks control the money supply, fix reserve ratios for banks, set interest rates, and regulate the financial sector. As communist philosophy rests on the precept that the means of production be controlled by a central for, on behalf of the many… it follows that what we have here is an unfree, centrally planned and controlled communist monetary regime – a wolf in sheep’s clothing.
South Africa – the African land of the Free?
Pre Anglo-Boer War, South Africa offered an oasis for those brave enough to weather the implicit dangers of Africa’s Southern frontier. Similar to the American story, immigrants from Europe, Africa and the Asiatic region flooded into South Africa, in pursuit of economic and personal freedom.
With vast expanses teeming with game, ideal temperatures and soil conditions for agriculture and the discovery of history’s largest goldfield in the Witwatersrand basin, South Africa offered the ideal conditions for self-determination, as well as the opportunity to amass monetary wealth.
Unfortunately, after the Anglo-Boer War and the defeat to the British Empire, South Africa became a colony, and subsequently amalgamated into the Union of South Africa. The combination of Britain handing over control of the Union to one of the Boer Generals, General Louis Botha, as Prime Minister of the Union, and the economy’s heavy reliance on labour-intensive industries as mining and agriculture, meant that the system of Apartheid could be institutionalised.
Large numbers of relatively poorly educated non-white South Africans became the nation’s single largest source of labour. The high demand for low-cost, low-skilled non-white labour which was abundant in the labour-intensive economy, made racial segregation easy to introduce and initially easy to enforce.
Before 1920 and during the early years of apartheid, the majority of the small number of educated non-white South Africans saw, albeit erroneously, the white-dominated economy and apartheid as having resulted from a free-market capitalist economy (it was fascism par excellence). They subsequently looked to communism and socialism as the ideologies that would offer equality and opportunity.
Commie-Monetary Systems in South Africa
The Apartheid regime, especially after the Nationalist Party’s election to office in 1948, can be characterised as a textbook showcase of communistic monetary principles – Keynesian spending theory galore and outright control of the money and banking eco-system.
Some of the Party’s actions included severe controls on the movement of capital (foreign exchange), state-controlled factors of production (Electricity, Water, Energy etc.), high taxation, restrictive race-based labour laws and affirmative action policies, trade embargos, artificial double-digit interest rates, large state expenditures causing massive debts in administering and refining apartheid and massive budget deficits to prop up the decaying Apartheid system.
The years of open frontiers and freedom of coin and self, were replaced by restrictive and oppressive legislation – grossly eroding the individual and economic freedoms of its citizens…
Sadly, as Constitutional Democracy dawned and a new era began with the victory of the ANC in 1994, the South African public have simply experienced an acceleration in this style of monetary tinkering and economic communism. During South Africa’s early post-apartheid years, government officials and people connected to them embraced Keynesian spending theory with overwhelming enthusiasm. Allegedly, the current regime have misspent, misallocated and malinvested such astronomical sums of money that claims of high-level corruption are an everyday occurrence.
Quite significantly, the ANC government have been guided by a manifesto document written by then General Secretary of the South African Communist Party, Joe Slovo, in 1988. This ‘National Democratic Revolution’ contained the blueprint for social emancipation and national liberation of the ‘working class’ masses from the Nationalist ‘bourgeoisie.’ Quite practically, it offered a staged approach toward this utopic destination of communist rule by quoting the words of Lenin as, ‘we are not putting (the socialist revolution) off but are taking the first steps towards it in the only possible way, along with the correct path, namely the path of a democratic republic’ (Selected Works, Volume 1, p.435). Slovo continues, ‘our immediate emphasis on the struggle for democracy and ‘People’s Power’ is an essential prerequisite for the longer-term advance towards a socialist transformation.’
Since then, this ‘liberation alliance’ of the ANC, Cosatu and the SACP (South African Communist Party) have presided over the wholesale and systematic destruction of South Africa’s economic and social capital. The transformation towards socialism has yielded 30 years of ballooning government spending and deficits, a plethora of new taxes, pedestrian economic growth, the collapse of the nation’s creditworthiness, large-scale social upheaval, a crime epidemic, and the largest unemployment rate in the world.
South Africa is now Africa’s largest welfare state and has Africa’s largest, most politically well-connected and politically influential labour union movement. As a result of the new South Africa’s restrictive labour laws and affirmative action policies, a large number of educated South African professionals chose to emigrate to other nations.
South Africa Today
Today, a sizeable segment of South Africa’s population still sees Marxism as the road to economic relief and prosperity in redressing the ills of the previous regime. It might then come as a surprise that Keynesian economic theories formed the economic basis of both the Apartheid and the current ANC regime.
These commie-style monetary policies have long been discredited, refuted and debunked by such noted free-market economists as F.A. Hayek, Ludwig von Mises, Murray Rothbard and Henry Hazlitt. Alternatively, a brief read of the human casualties incurred and the ultimate fate of past communist experiments in world history should alone be enough to deter anyone from the ideals of communist ‘liberation’.
South Africa’s history thus lends itself to a permanent legacy of individuals who seek freedom from oppressive State machines. We believe that the economic and political salvation of South Africans lies in individual and economic liberty, and that the only instrument with which to successfully bring about such change is the move towards Free-market Capitalism.
We can only hope that some senior government officials finally, if ever, read through the pages of Human Action or Man, Economy and State, or both. Until then… stock up on gold.