We work, we save, we invent, we use initiative, and it is this that brings about material progress. Yet throughout history it was often war, conquest and class strife that looted individual wealth and accumulated it. This capital did enable some material progress as a result of “business” or “industrial” activity that went on largely in spite of military governments and classes, unless they prevented it. So we have inherited many confused notions about wealth creation.
Obviously individuals are the only actors on the human stage, but institutions other than the market and the law such as family and nation also matter. And we are an interdependent species so public welfare provision for the unfortunate has its place. But it is economic growth which promotes the general increase in human welfare which we all desire.
The Free Market Foundation, which historian and author MC O’Dowd chairs, is in the process of publishing his tremendous new book A better hope for the new millennium. In this magisterial work he tackles many of the reigning misunderstandings and fallacies about capital, class and society which continue to bedevil our pursuit of material values.
O’Dowd’s professed purpose is to cause a significant number of people to read the works of Ludwig von Mises and FA Hayek. However, he deals so clearly and persuasively with the issues facing South Africa today that politicians, journalists and scholars cannot but enjoy the experience. The better hope of the title has three components:
The author accepts the vital role of the state taxation collected by a legitimate government for proper purposes is not robbery. He does, however, observe that all the functions of government except national defence, police power and the administration of justice are questionable and all over the world today they are being questioned everywhere there is a demand for the scale and scope of state involvement to be reduced. This is a valuable process that is essential as we seek to best allocate limited resources among the infinite needs of the world’s population.
In South Africa’s case, the gradual move from a historically large government towards more public-private partnerships and other co-operative initiatives has begun to pay dividends in better service delivery. This process seems set fair to continue, neither slow enough for interventionists nor fast enough for free-marketers, but in the right direction.
O’Dowd reminds us that the virtues in which bourgeois morality consisted were self-reliance, honesty, dependability, diligence and thrift, to which, since we have now recognised the importance of entrepreneurship, we must now add initiative. He argues persuasively that of all the forms of co-operation we require to create wealth, to progress, or indeed to stay where we are, one of the most vital and one of the most vulnerable is the co-operation between savers and workers. Capital is created by saving, and without it investment is impossible, so it must be protected from looting. We have to restore the realisation that saving is a major social virtue. These virtues are the keys to economic growth.
Almost everybody is likely to come at Better Hope from some version of the established “bigger government” position. But, emerging from a turbulent century of two world wars and the rise and fall of communism, we have access to so much factual history about what has worked and what has failed. And reading Better Hope provides a splendid romp through that history as O’Dowd clears up one confusion after another. Like the tired hiker with “aches and pains in places he didn’t know he had places”, the reader is introduced to linked chains of shoddy but seductive 20th-century thinking and then crisply enlightened. The mysteries of labour and capital, class conflict and co-operation, social engineering and limited government, are dispelled and clarified forever.
Ah, would that it were so! Any good communist, socialist, radical environmentalist, or third way mixed-economist might be inclined to avoid Better Hope altogether as too upsetting to cherished old beliefs. Yet really all should read it for the intellectual shake-up, even if only to better understand the enemy. And O’Dowd’s exposition is so good that at least some of it would rub off on the most hardened apparatchik. After all, as Marxists once maintained about their ideas, a global dialectic an inevitable and remorseless tide of history is now at work, raising all the boats. Call it capitalism or neo-liberalism or globalisation no matter what derogatory label is used, it is working.
So for every country the essential issue for the new millennium is how best to participate, incorporating global best practices without unnecessarily sacrificing cherished local identity and custom. And O’Dowd’s three-part better hope shows us the way.
Source:Dr Jim Harris is a freelance researcher and writer. This review may be republished without prior consent but with acknowledgement. The patrons, council and members of the Foundation do not necessarily agree with the views expressed in the review. A better hope for the new millennium is available from the FMF at R75-00 including VAT, postage and packing. Review copies are available on request. Contact Judith at (011) 884-0270 or fmf@mweb.co.za.
FMF Article of the Week\4 December 2001
