Opinionista Ismail Lagardien 11 January 2016

I believe in government

There really is no such thing as a free market, there never has been, nor can there ever be such a thing. The very concept of an economy that is independent of government and political institutions, is a stark utopia. It is unrealisable, and efforts to bring it into being are doomed to fail, and inevitably have dystopian consequences.

A recent report by Dirk De Vos published on these pages suggested that I held some philosophical, ideological, theoretical or practical position that is opposed to government. I should make it clear that I hold no such views. It is unfortunate that I feel the urge to lay out my intellectual beliefs and values, when intelligent readers ought to be able to work things out. Then again, I prefer not to be misrepresented on matters close to my heart. Let me, then, nail my colours to a mast, as it were.

I believe in government for very many reasons, least of all for the provision of public goods and services, and to ensure effective distribution of resources through taxation and investment in health, education and housing for the poor, the marginalised, and those whose lives have been disrupted by injustice or violence. I also believe that the state has, historically, played a significant role in innovation and entrepreneurship; from mobile phone technology to internet communications, or medical research, the state has played a founding (though not exclusive) role in innovation, research and development. The state is, then, of greater use than merely for the enforcement of contracts and protection of private property. None of this matters, of course, to market fundamentalists who are quite unable to provide evidence of where, in recent memory, and when, exactly, completely free markets existed for any length of time – other than in Somalia, since the early 1990s.

I agree with Karl Polanyi that there really is no such thing as a free market, that there never has been, nor can there ever be such a thing. Polanyi considered the very concept of an economy that is independent of government and political institutions, as a “stark utopia”. It is utopian because it is, actually, unrealisable, and efforts to bring it into being are doomed to fail, and inevitably have dystopian consequences. I agree that markets are necessary for a functioning political economy, but the entire thrust to establish a “market society” is deeply troublesome, and fundamentally threatening to human society. In this sense, I agree with Polanyi that the market is simply one of many, among a range social institutions. There is a real danger in subjecting all real commodities, like cars or cameras to the same governing and “market” principles as things that make human (social) life possible; things like clean air, education, health care and rights to choice, and to earn a livelihood. When these (the latter) public goods and social necessities, Polanyi’s “fictitious commodities”, are treated as if they were commodities produced for sale on “markets” and not as protected rights, the social world is endangered, and major crises become inevitable.

So, unlike the world shaped by the imaginary dreamscape of free markets, unfettered choice, market equilibrium and rational utility maximisation, I am much more comfortable living, working and thinking in the real world. To the extent that I even have a vague interest in challenging the free market fundamentalism raised in De Vos’s report, I share (for a lot more than fun) Friedrich Hayek’s rejection of positivism, and prefer a methodology that abandons notions of equilibrium and instrumental rationality, and which rejects the price mechanism as the final arbiter of all knowledge and human agency. Equilibrium, in this sense, is a convenient theoretical fiction. In sum, I have no great faith in individuality, rationality and self-interest as the defining features of human beings. So much of market fundamentalist belief relies on the concept of homo economicus, (which Friedrich Hayek and Ludwig Von Mises rejected) and a contiguous belief in Economics as the only way to explain or understand the world. Hayek, himself, opposed this when he declared (somewhere in Studies in Philosophy, Politics and Economics): “He who is only an economist cannot be a good economist. There is hardly a single problem that can be adequately answered on the basis of a single special discipline.”

But let us leave this aside, for now.

The column that prompted the response was about South Africa’s nuclear build. The concerns I rose were not anti-government, nor was the column about role of the state, in general; it was about secrecy, lies, censorship, withholding of knowledge and information. With particular reference to South Africa, it was about incompetence; the lack of skills; the absence of a culture of responsibility, accountability and of consequences; issues like misconduct, maladministration and graft, all of which have become culturally embedded in South African politics and governance. It was, also, about the deceitful habit of always blaming others for one’s own problems.

In the case of South Africa, we always have whites, settler colonialists, colonialists, empire-builders, and racists in remote villages of eastern Finland and the hip new conversation-stopper, “whiteness”, to blame for all our problems. Parenthetically, there is a scientific study which found that people in eastern Finland are the “whitest” people in the world. South Africa’s identity brokers will have a conniption just knowing that….

But seriously, in my original post on South Africa’s nuclear build, I tried to make the point that when things go wrong – from cost over-runs, to maladministration, work stoppages, theft, technical mishaps, disappearance of funds or structural flaws – we will have no-one to blame but ourselves. Jan Van Riebeeck has had no say in the decision to build nuclear power plants, and the apartheid state – founders of our first nuclear age – is no longer around. A note to the hysterics: This is not a denial that racism exists, or that whites are privileged, or that structural and spatial iniquities continue to determine outcomes in South Africa’s political economy. It is simply an acknowledgement that we have to take responsibility for our actions, in this case it is building nuclear power stations, and start to accept that building and running a nuclear power station requires a lot more of us, than running a post office. We know, of course, that Europeans established the first postal service in South Africa in about 1500 – which makes them responsible for the problems with our postal service in 2016. We don’t have that excuse with the nuclear build. This was the argument I tried to make, apparently unsuccessfully, in the original post. DM


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