This article was first published by News24 / CityPress on 7 December 2025
South Africa’s biggest political party, the ANC, loves to talk a big game about sovereignty. Whether it’s the President, Cyril Ramaphosa, or the Chairperson Gwede Mantashe, or really anyone in that party, all of them have over the past year made statements about defending South Africa’s sovereignty. This is all empty talk; it’s not only that under their leadership the SANDF has been decimated, the true strength of a country lies in the prosperity of its people. The ANC has shown itself to be ideologically hostile to the idea of a prosperous South Africa.
There are many examples of countries with small/weak militaries that, when threatened by invasion or when they had to project force abroad, used the prosperity of their citizens to quickly build up their military capacity. Possibly the best example of this is the United States in World War II, who did have a powerful navy (that was mostly destroyed by the Japanese surprise attack at Pearl Harbor) but not much of an army. They relied on their immense wealth to quickly build up a military capable of fighting and decisively winning on two fronts that were separated by an ocean.
The American example was not new. From ancient Athens, to America and Israel in modern times, prosperous states have always had this ability to build up a formidable military from nothing. The other factor is usually the presence of a citizen-soldier culture or militia, which in turn requires citizens to be familiar with the use of weapons. And building up a military quickly is far from being the only benefit to sovereignty of a prosperous society.
Such a society also does not need to rely on external debt to fund its government; these societies typically avoid large welfare states, so the government is not too large. These societies also can take care of any internal needs, and they do not need opaque NGOs to provide things like basic healthcare, disaster relief and education to the poor. When emergencies or shocks arise, these societies typically have large reserves of savings both in the private and public sectors.
It would seem then that prosperity is essential for any country that wishes to remain sovereign. The question then becomes, how to bring about prosperity? In example after example, it has been conclusively shown that there is only one realistic way of bringing about prosperity. This method is a basket of institutions and ideas comprising the following: property rights, free markets, the rule of law, sound money, small government and free trade.
Property rights
People need to own their labour and what it produces. Not only that, but they need a reasonable expectation that they will be able to own it tomorrow. Investors who put billions into a country only expecting returns in 10, 20, 30 years or more need to know that they will be able to own what they built and what it produces in that time. The wealth we enjoy today comes from an accumulative build-up of investments over decades, going back to when South Africa was founded.
An example of this can be seen in Sandton and those ‘Africa’s richest square mile’ adverts by Liberty, the people who first put money into Sandton in the 70’s were doing so expecting to make a profit from their investments in 2025. Otherwise, it would have been insanity to undertake such an expensive and risky project.
But this does not just apply to big companies. As a working person, I save for retirement with the expectation that I will own the things I invest in when I retire. This long-term investment horizon is the source of many of the jobs we have today, companies based in Sandton like the Sandton City mall and the tenants of that mall, all hire people today because of this long-term horizon. And if we are to hire even more people in decades from now with a much larger population, we have to abandon the attempts and actions taken so far to weaken property rights, we have to let go of the insane idea of expropriation without compensation and even go further and abandon the concept of squatters rights over property that others own.
Free markets
An overregulated society cannot produce prosperity to the same extent that a relatively free society would. South Africa suffers from too much regulation, and there is data to back this up. In the latest Economic Freedom of the World Index, we rank 81st in the world out of 165 countries. If you want to start a business in South Africa, you cannot just go ahead and launch your idea, you first must find out what regulations apply to the industry you want to get into.
This alone is a real cost, just having to slow down and compile every single regulation that applies to your business at national, provincial and local levels takes too much time and therefore money. But it doesn’t end there, you also must ensure that you are compliant, this is so costly that big companies often have compliance departments.
While attempts to “cut red tape” through initiatives like Operation Vulindlela are welcome, the approach is too fragmented. The fundamental problem is that government approaches cutting red tape through central planning, they want to focus on specific industries which they view as particularly important to the economy. But this is a fundamentally unknowable thing; an economy is a complex system, the biggest industry in the country might in future be something that no one in the country, even the people involved in the industry, expect.
You must allow people to experiment with various business ideas – a market is something that one only learns through participation in the market, and even then, you only learn your own small part of it as a business. None of the people in Nedlac, parliament or the civil service can possibly know which industry would be unleashed through deregulation. That is why we need something like a General Laws Amendment Act to repeal as much regulation as possible in one fell swoop, we only need to keep safety and environmental protection regulations.
The Rule of Law
When most people speak of the rule of law, they mean something like respect for legislation. It’s not that easy. What the rule of law means is that society is run according to laws that everyone is subject to and that they are not arbitrary. So, it’s not just about respecting the laws, but the laws must be of high quality, otherwise you would have to make absurd statements like ‘parliament passed a law saying they can take anyone’s property, respect the rule of law and give up your property’.
One of the ideas that best expresses the rule of law concept of equality before the law is Exodus 23 verse 3 in the Bible which reads, ‘You shall not show partiality to a poor man in his dispute.’ Unfortunately, from so-called progressive taxation to squatter’s rights, much of SA law violates this. But our disrespect for the rule of law also involves the cost of accessing the courts, which is too high, the fact that people who don’t have the money often spend years in prison awaiting trial.
This is a very complex issue, but fair to say, as it concerns prosperity, you need confidence that the law is predictable, that disputes will be adjudicated fairly, and you won’t suddenly find yourself facing a massive fine for violating a law that you were not even aware you were violating. In South Africa today, the Competition Commission is one of the biggest violators of the rule of law in this regard. Companies often feel they have no choice but to pay the fine when accused by the Commission of so-called ‘collusion,’ which is an ill-defined concept, taken to its logical, absurd conclusion. The implication of it is that companies cannot allow any of their employees to talk to anyone else about their business.
It is very easy to ensure competition; just remove the regulations that make it hard to enter a market. If companies want to collude, this is a limited strategy. All that they can do is impose costs on themselves to the benefit of consumers, which means consumers will extract resources from those companies and these can in future be used to compete against the same companies. Money doesn’t expire, and this brings us to the next topic.
Sound money
Prosperity cannot occur without private investment. In South Africa we often get confused and equate public and private investment with each other and pretend they’re both equally necessary for prosperity. This is a fundamental misunderstanding of how prosperity happens. The public sector takes money away from people who are highly motivated to generate a return or avoid a loss (if you lose money in the private sector, you compromise your ability to survive in the extreme case) and puts it in the hands of people who know that they can’t fail as long as the government is able to tax us.
For private investment to occur, it first must start as savings. For savings to occur, savers need to know that they will not lose the value of their money, or purchasing power, merely by saving it. This is why America experienced its period of greatest economic growth under the gold standard, in the so-called ‘gilded age’.
This is because a gold standard has built-in protection against inflation: you cannot print or create gold on a whim. This is also why governments are usually hostile to a gold standard. But the fact remains, to generate prosperity savers must have enough confidence that their money will retain its value.
This also lowers the risk of investing because it means that expected investment returns don’t have to make up for inflation. And when savings grow, the supply of capital increases, which means the price of capital decreases, this means that interest rates naturally go down. This contrasts with government attempts at manipulating interest rates downward; these usually end in uncontrollable inflation (the best modern example of this is Turkey).
Small government
As we have already said, any money spent by the government is money taken from the private sector either through taxes or inflation. That means the growth of government, i.e. a government that does more and more, acts as a burden on the private sector. The growth of government also typically leads to more regulations.
We need to allow people the freedom to produce to generate prosperity. This means that a small but highly efficient government, at doing the things it is supposed to do: prosecuting and investigating crime, adjudicating disputes, defending the country, using diplomacy to ensure market access for our businesses and individual citizens.
Free trade
In South Africa, there is a strong and persistent sentiment favouring autarky, the idea that we can be self-sufficient in all things. These people wrongly assume that this is a prerequisite for ensuring sovereignty. But a casual glance at history shows how wrong-headed that is: both Japan and China were once more advanced than Western societies, so they decided to close themselves to outsiders. What followed was hundreds of years of decline, culminating in both being forcibly reopened by Western powers.
Luckily for them, the Japanese adapted quickly and implemented the necessary reforms under the Meiji restoration to quickly become a powerful country. The Chinese were not so lucky; they would go on to suffer the so-called ‘hundred years of humiliation.’ Both of those countries came out of their respective experiences understanding that free trade is essential for a country’s strength.
There is always someone who can do some things better than you can, so it’s in your interests to trade with them for those things. Many of those things are inputs to things you have a comparative advantage in producing, so the products you are good at producing often require inputs from countries who are good at producing those inputs. Inputs refer to everything required to produce including labour.
But doesn’t that make you vulnerable to the countries you trade with, deciding to stop trading with you? Firstly, diplomacy exists for that reason, to ensure your trade is geographically diversified and that your critical trade partners are your allies. Secondly, trade is a two-way street; in as much as your trade partner can deprive you of critical inputs, you can deprive them of critical inputs too. This is one of the reasons why war is a negative sum game: both parties in a war lose, in an economic sense, even the party that ‘wins’ the war.
Conclusion
No matter what the UN Charter says, sovereignty is not guaranteed; it is something for which states have to work hard. Sovereignty is inseparable from the prosperity of your citizens, and this in turn requires freedom. Remember that the USSR didn’t lose to America on the battlefield, it collapsed in on itself because they failed to allow the necessary level of freedom to ensure a prosperous and resilient country. The final point that needs to be made is that the necessary level of economic freedom required to see desirable outcomes differs from country to country. China could get away with liberalising just a little bit because of its massive population and culture of saving, but the only way to find out how much is enough is to do as much as you can until you start seeing the desired level of economic growth. That doesn’t change the simple fact that there is only one answer to the question of prosperity: economic freedom.
