Government and the Economy

One of my many cousins gave me the idea for this blog entry, he no doubt must be a big proponent of the government working for the South African government. Does the government have a place in the economy in the modern world, ever?

Let us begin by stating the ultimate rule of freedom, that rule is simply all are equal before the law. If A is legally allowed to do an activity, then by law B should be allowed to do the same thing. If A can receive from the government, then B being equal should also receive from the government, if B is not legally bound to receive then B is not legally equal to A, that is freedom, simple enough to understand. Freedom therefore does not exist on this earth, there are always those more equal in the governments eyes because those people are an elite, protected by the government, this happens in every society.

Go to America, China, Russia, South Africa, Zimbabwe, Canada, there are always those protected by the government, the most twisted minds however come from America, where on one hand they promote idea of equality before the law and freedom, and on the other hand rush to help the big business when in trouble because they are too big too fail. Only one with no self worth will believe American or white western propaganda about freedom anymore. People are not legally equal.

Let us move away from philosophy to economics, those who can provide better should be allowed to provide. This in no way says there should be no government involvement, freedom is about letting the better produce, if the government can do something better then why not do it, but legally that does not bar competition for the government if somebody else can produce better. Government monopolies are immoral returning to the concept of freedom, any legal monopoly is immoral. Just because it is the rule of law does not make it moral.

My particular interest is knowledge economics, knowledge being the primary resource giving all other resources the quality of being resources. In one of my papers, I gave three types of risks when dealing with knowledge, there is a particular risk level when many years will take for knowledge to become a product that private investor will not touch that type of research to risky, then you need the government. The space program would never have taken off without first the government having taken the lead in the research, Boeing and Airbus both receive tremendous government funding, American government leads the way into research into alternative energy, risks that private corporations that need continuous profits just would not undertake. Obviously there must be government involvement, without government involvement there would be stagnation because private interests can only take a society thus far.

The government needs to be at a constant vigilance, looking at past and future trends, helping and being involved in research that will mean the economy stays with the future trends. The South African government for example should long have been involved into funding research into alternative energy. The renaissance man, Thabo Mbeki said the hydrogen economy will be great for South Africa as South Africa will provide the platinum, a needed catalyst. Is that renaissance. We the ancient Africans who believe in Africans say hydrogen economy represents a positive opportunity for black minds to be involved in not just providing platinum but also producing the hydrogen cells themselves, that is why whites prefer those who want to follow than us who believe Africa and Africans can be leaders in things other than providing resources. Zuma should think like us above resources and respect knowledge otherwise Africa will remain at the whims of Western demands economically. Got to love yourself and then you can love other people like yourself, too many times blacks hate themselves because they believe in white propaganda that blacks can not have original thought.

At a personal level I would go as far as saying government has a mandate to start business and sell them of to society if society is not willing. If there are no insurance companies a government has the duty to start them, after a certain time sell it of to the public and employees. If there are no cell phone companies it is the duty of the government to create them then after they start, say 6 years, sell them of to the public. In such things the government does not need to be involved for long.

The government has every right to help a private firm if that firm has the expertise to build a sustainable future and employ people in the long term. But helping one bank over another is ludicrous. Banking is not about skill or talent, it is about somebody having money because of their good fortune and lending that money and taking interest as payment for foregoing using that money for other things. Hen they have bad luck they have no right for assistance from the government unless all other banks get same assistance in proportion otherwise clearly there is inequality.

Incidentally more freedom a society has, the better the general economy will do in terms of creativity. If a country does not want to rely on resources it needs more freedom. Canada is not a good model, Canada relies heavily on resources rather than creativity, it can afford to legalize 5 big banks and ensure they never have competition, just like Saudi Arabia, Kuwait, relying heavily on resources the country can reduce freedoms whilst those resources are in demand. Without the resources a society like Canada would be at the level of Portugal in terms of GDP with the elitist system they practice.

Thos are my thoughts on government involvement, just look at China with the introduction of greater individual rights, imagine what it would do for Africa.

Bhekuzulu Khumalo