Confessions of an unreconstructed neo-liberal fundamentalist

Let us consider what Dawie Roodt has to say here about “Confessions of an unreconstructed neo-liberal fundamentalist” and follow his views in the next four editions of his newsletter which will be “dedicated to his plan for the economy”.  This should make for both interesting and thought provoking reading – which, coming from Dawie, is usually not too difficult to digest after he’s already chewed the proverbial cud for us.

“Not so long ago Jeremy Cronin, second comrade in the South African Communist Party, called me an “ureconstructed neo-liberal fundamentalist”, actually he called me a “hysterical” one. The upside of  being called names like this is that it makes for great titles. Just imagine a book titled “Confessions of an unreconstructed neo-liberal fundamentalist!” Perhaps I should consider it…

The above tag was bestowed upon me when I criticised one of the numerous economic policy documents produced by our bureaucracy. As usual plenty of state intervention and an assortment of wishes was the main focus of the document. But it’s one thing criticising policy; it’s another to come up with an alternative.

Therefore this note, and the next four editions of this newsletter, will be dedicated to my plan for the economy…

As a starting point, I think that a policy should have a theme. Typically, political parties have catchy themes or titles that are supposed to give us a warm fuzzy feeling without saying too much; “A better life for all“, “Jobs, jobs, jobs” and so on. If you are in the opposition, and likely to stay there for some time, the “8% growth project” is also acceptable, however a little dangerous for the ruling party to use – too much egg when you eventually and inevitably miss your target.

So, to stay with tradition I have decided on a theme for my economic policy suggestions for South Africa; “Simplicity and choice!” And that is exactly how economic policy should be. There is no need for complexity in economic policy. Policy should be clear and easy to understand. Furthermore, I believe in freedom, hence “choice”; freedom to choose where to work and with whom and how to enter into contracts, and to be free from state intervention. “Simplicity and choice” is the theme for my policy suggestions.

With this theme as basis it is easy to put together a policy document. There is a catch however… Reality is that political parties can’t be purists. Proposing good but unpopular economic policies is likely to keep you out of power. So, inevitably, economic policy has to be a compromise; try to propose good policy but modify it a bit to make it more palatable for the electorate. And once elected, try to implement as much of your policy as possible and hope the benefits are obvious enough before the next election.

Before I continue I have to have a go at the comrades. Communist ideology is fundamentally non-democratic in the sense that opposition parties are not tolerated because communism is a totalitarian ideology which does not allow for power to shift between political parties. So once the communists are in command they will implement their policies just as any other party will do, but with one fundamental difference. Communist ideology requires “internal structures” to assure a “perpetual revolution.” The unavoidable outcome is that the inferior process of resource allocation in communism undermines wealth creation and disregards freedom. Eventually a communist regime can typically only be toppled with a revolution, and usually only after the economy has been destroyed to such a degree that people are more angry than scared of the regime. This will one day be the outcome in Cuba and North Korea.

Nevertheless, even my policy suggestions will be compromised in order to get a broad buy-in, whilst trying to improve what we currently have. I will give more detail about my plans in future.

In my policy suggestions I will mostly touch on fiscal, monetary, trade and labour policies. In line with my theme, my policy suggestions will concentrate on simplifying issues such as the tax and labour regimes while also liberalising and freeing up the economy. My aim will be to create a freer community that will be allowed to create wealth. I will not attempt to create jobs; jobs are not created. I believe jobs are the result of a free and wealthy country.

A message to all political parties; I retain no rights over my ideas, please use them freely!”

Dawie Roodt is the Chief Economist of the Efficient Group