Mental floss for the discerning
25 September 2017 19:06 (South Africa)
Opinionista Ivo Vegter

On Thatcher and society, Vavi and the market

  • Ivo Vegter
    IvoVegterBW
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

Surprisingly, Margaret Thatcher, who died yesterday at the age of 87, reminded me of something Zwelinzima Vavi recently said. In Thatcher’s case, it involved “society”, and in Vavi’s case, “the market”.

Something Cosatu general-secretary Zwelinzima Vavi tweeted a few days ago triggered a thought, a memory. I’m paraphrasing, but it was something along the lines that government and the market do not provide what citizens want. It seemed to invoke the democratic power of citizens as ranged against both government and the market.

It was that distinction, between government and market on one hand, and citizens on the other, that struck me. It reminded me of something buried deep in the back of my mind. That memory surfaced suddenly when I heard the news that Margaret Thatcher, one of the greatest leaders of the 20th century, had passed away.

Journalists more eloquent than I am will no doubt celebrate her achievements as Britain’s former prime minister, and enough critics will denounce the failures of the Iron Lady. Some will dance on her grave.

The American journalist Michael Dougherty remarked on the etiquette of commenting publicly about such events: “do not speak with nuance of the dead.”

I propose to tread dangerously by doing so. I wish to recall one of her more controversial pronouncements, which connects serendipitously with the thought Vavi’s remark provoked.

Many will recall the apology that David Cameron made in 2006, after meeting Nelson Mandela, for an off-the-cuff remark Thatcher had made in 1987 to the effect that the ANC was “a typical terrorist organisation”.

For the full context in which she made that remark, a glance at South African History Online may prove instructive. However, this isn’t the remark I propose to address, because this was uninteresting political theatre. Cameron merely got on the right side of history on a matter that had long been resolved by time and reconciliation, largely in the ANC’s favour. It was a cost-free apology.

On that occasion, he also apologised for another statement of hers, however. It is philosophically far more interesting, and Vavi’s remark reminded me of it.

You see, Cameron was uncomfortable with the fact that Thatcher had once declared: “There is no such thing [as society].”

He responded: “There is such a thing as society; it’s just not the same as the state.”

It was a masterful answer to a statement that offered a useful cudgel against advocates of capitalism and individual freedom. In important ways, they’re both right.

As with her remark about the ANC, it is important to consider her comment in its full, nuanced, context. The BBC quotes it in its obituary: “I think we have gone through a period when too many children and people have been given to understand ‘I have a problem, it is the government’s job to cope with it!’ or ‘I have a problem, I will go and get a grant to cope with it!’; ‘I am homeless, the government must house me!’ and so they are casting their problems on society and who is society?

“There is no such thing! There are individual men and women and there are families, and no government can do anything except through people and people look to themselves first.

“It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations.”

In that context, is her view still so absurd? “Society” is an abstraction. Yes, it consists of all the people around us, but it is not an entity distinct from individuals that can be held responsible for their welfare. It has no powers, no offices, and no duties. It is merely a collective term for people living together.

Since only individuals can act to better their lives or the lives of those around them, there is little sense in talking of obligations on the part of society. That always implies obligations on the part of other individuals, enforced by the power of the state. If that is what you mean, you should have the political courage to say so.

That is why Cameron’s response was so clever. He acknowledged that the collection of individuals we call society does exist, but clarifies that society’s supposed obligations for the welfare of its members are not those of the state or its government. You might disagree, but he shrewdly avoided conceding to welfare statists and opponents on the left that society exists as a separate entity that owes its members anything.

And that’s how we get back to Vavi. That citizens in South Africa lack both political power and material means is not in dispute. In attributing responsibility for this, however, Vavi made a distinction between government and citizens, as well as between the market and citizens. This makes it seem as if the two pairs stand in a similar relationship to each other. They do not.

Government is indeed distinct from citizens. Its members are elected by citizens – in our case very indirectly by means of a vote for an organisation that in turn appoints government’s members. These appointees then exercise the powers delegated to the state by the citizens, who renounce their own right to these powers.

Thus, for example, the government has the unique power to exercise force against citizens who infringe on the person or property rights of others, while citizens can only do so in exceptional cases when the government cannot practically step in, such as in immediate self-defence. The government has the power, for better or for worse, to require citizens who wish to practise certain professions to seek its permission, or to decree how such a profession ought to be practised. Citizens have ceded their right to make their own choices in this respect. It has the power to limit the uses to which certain land may be put, regardless of the preferences of those who own it. Perhaps most importantly, the government has the power to tax, and tax is the only lawful debt for which a person may be imprisoned.

Ultimately, government exercises these powers by virtue of the armed power it wields over citizens. Try resisting arrest on tax charges, or escaping imprisonment if convicted, if you want a practical test of whether the ultimate power government wields is the power of life and death over citizens.

So, drawing a line between citizens and the government is a very valid distinction for Vavi to make. He is rightly concerned that their interests are aligned, and that the latter does not abuse the powers ceded to it by the former.

The same is not true for citizens and “the market”. There is no similarly disparate power relation, and citizens have not ceded any rights to an entity known as “the market”. What we call “the market” is merely the manifestation of all the voluntary interactions among free citizens.

Like Thatcher’s “society”, it does exist, but only as an abstract concept. It has no existence separate from that of citizens. It consists of citizens themselves, and all the individual actions that each of us take in the production of goods and services for the satisfaction of our wants and needs. It describes the increasingly fine division of labour, which have made our productive work more efficient, and raised prosperity for almost everyone. It describes how widely varied products get produced for an infinite variety of different customers. It describes the positive-sum system of voluntary trades that citizens enter into among each other, in which one person’s gain is not another person’s loss, but rather, in which both parties to a transaction believe that the exchange of time, effort, money or produce will leave them better off.

Unlike government, the market is closely aligned with the needs and wants of citizens, because it represents, acts upon, and responds to the collective needs and wants of all of us, as expressed in our individual choices. It is not centralised. It is not one-size-fits-all. If a need exists, some individuals among those who make up “the market” strive to fulfil that need, without any external direction or control.

The market, unlike government, but like society, is us.

Perhaps the confusion arises from old-fashioned class struggle rhetoric. Perhaps it comes from the belief that the rich are getting richer while the poor are getting poorer, despite the fact that reality contradicts this political slogan. Or from the notion that “the market” caters only for “the rich”, despite plentiful evidence to the contrary, such as minibus taxis, inexpensive food, and cheap clothing made by hyper-efficient factories.

Whatever the reasons for distinguishing between “market” and “citizens”, it is a false dichotomy. It is important to make nuanced distinctions, for example between state and society, as Cameron did, or government and citizens, as Vavi did, or between state and government, or government and ruling party, as too many politicians fail to do.

But a notable feature of the market is that it is not distinct from society, nor is it distinct from our life as citizens. It is a phenomenon that arises spontaneously from the collective action of free individuals.

The “market” is an abstract concept, describing the economic facet of how we, free citizens, interact with each other, just as “society” is an abstract concept that describes the social facet of our voluntary interactions.

That society – or the market, if you like – is nothing more than the voluntary interaction between free people is an important realisation. It is far from the only legacy Margaret Thatcher leaves, but it is a worthy legacy of her refreshing readiness to speak her mind, however controversial an out-of-context quotation might turn out to be. It is a legacy of her courage to follow her principles with fearless integrity. May she rest in peace. DM

  • Ivo Vegter
    IvoVegterBW
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

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