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For the sake of economic freedom, leave Djo BaNkuna’s cabbage patch alone 


Tim Cohen is editor of Business Maverick. He is a business and political journalist and commentator of more years than he likes to admit. His freelance work has included contributions to the Wall Street Journal and the Financial Times, but he spent most of his life working for Business Day. After a mid-life crisis that didn't include the traditional fast car, Cohen now lives in the middle of nowhere in the Karoo.

In the midst of the Covid pandemic, in a time of economic hardship, in an era of dramatic changes, we have something new to worry about: Djo BaNkuna’s cabbage patch.

First published in the Daily Maverick 168 weekly newspaper.

Djo BaNkuna is a resident of Theresa Park in Pretoria North, and he has utilised a piece of land outside his house to grow cabbages. The ground is fertile and his cabbages look great.

But last week, he was threatened with arrest by Tshwane metro police officers for planting vegetables on his pavement instead of grass, flowers or trees.

BaNkuna told  Maverick Citizen  that the police told him that if he didn’t remove his garden by Tuesday last week, “we have to unleash the law on you.”

In all the huge issues of our time, Djo BaNkuna’s cabbage patch seems like a small potatoes. But actually, it’s much more important than it seems because it relates to some of the most sad aspects of the mentality of the South African state.

The issue is this: why is it that South Africans, and the South African government in particular, claims to cherish freedom, but does not apply that notion to economic freedom?

Over the past few years, minister of Trade and Industry and Competition has been summoning various industry groups to Pretoria to discuss “master plans”. The plans have some positive aspects, but given Patel’s history and inclinations, they also have some negatives. The effort is classic trade and industrial interventionism.

In principle, I don’t think there is anything wrong with that – its pretty normal politics. But Patel’s inclinations are deeply embedded in a kind of socialist mind-set: often his priorities are well intentioned but misplaced. The big emphasis on local production, the lack of appreciation of how value is actually created, the inclination toward wielding the legislative stick, the resort to trade barriers, all demonstrate a basic hostility to economic freedom.

So it doesn’t surprise me at all that SA has once again ranked poorly in the economic freedom index which was published this week by Canadian think tank the Fraser Institute. This year, SA ranked 84th on the list of 152 countries analysed. SA has now been overtaken by fifteen former communist countries and has seven African countries ahead of it on the economic freedom list. It should be noted that this is an improvement on the 2013 and 2017 rankings (101 and 96 respectively). That actually correlates with my own perception; after years of ignoring business, government, somewhat in desperation, is at last listening a little better to what business has to say.

But it’s still a poor score, and reflects the ground lost. In 2000, South Africa ranked 58th on the list. And it has been demonstrated in real terms too: manufacturing’s contribution to gross domestic product (GDP) has fallen from 24% in 1980 to about 14% today. In absolute numbers in constant currency, manufacturing has been static for over a decade.

You might think, well, the Fraser Institute is a right-wing organisation with all those proclivities, but you would be wrong. For the first time this year, the organisation included gender disparities into its formula.

There are arguments against the index, but the arguments against the broader concept of economic freedom are just terrible. Countries in the top quartile of economic freedom index had an average per-capita GDP of US$50,619 in 2019, compared to US$5,911 for bottom quartile countries. Yes, that is correct: people who live in economically free countries have ten times more wealth than those in the bottom category. They also have extreme poverty rates of 1.9% compared to 34.1% in the bottom quartile.

The main argument against the index is an old one: correlation is not causation. Or to put it another way, look at China. China actually ranks below SA in the index, and its economic growth has been fantastic. The measurement criteria have also been criticised. It measures the size of government (expenditures, taxes, and enterprises, legal structure), security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor, and business.

But after thousands of studies, its veracity and ability to predict the future have been demonstrated too. Even China is at least directionally, an example. Although China is socially highly restrictive, there is no doubt that the introduction of economic freedom was a crucial part of its economic growth trajectory.

So message to the Tshwane police: Leave Djo BaNkuna’s cabbage patch alone. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.


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