End capitalism, define monopoly
JABU Mabuza’s attack on Professor Chris Malikane — “No, professor, your ‘cure’ is a short cut to disaster for SA” (April 16) — leaves much to be desired.
The ANC achievements Mabuza boasts about are a far cry from what could have been achieved had we not had corruption, cronyism, poor leadership and state capture.
His myopic, laissez-faire stance is that “despite challenges, all is well” and that South Africa (and the world) is headed in the right direction if it opts for capitalist economies where the few get richer at the expense of the majority.
It is a crisis when the majority of our people live in abject poverty amid race-based opulence. Mabuza chooses convenient comparisons of failed models elsewhere but deliberately ignores successes (Cuba, for instance). Of course, no economic model is perfect. Expropriation without compensation of ill-gotten wealth (including banks, insurance companies, et cetera) and land (gained through unjust apartheid laws) cannot be populist, Mr Mabuza. There are no one-size-fits-allsilver-bullet models to solve our unique economic challenges. We need continuing discourse and innovation, not necessarily the tried and tested. — Patrick Mphuthi, Sandton, via e-mail WHAT have we come to when an associate professor of economics does not even understand the word “monopoly”?
The word is consistently and deliberately misused with inflammatory intent, particularly by the government and by unionists.
According to the Oxford dictionary, a monopoly is: “Exclusive possession of the trade in some commodity; This conferred as privilege by the State.” Monopolies are created or permitted by law — a privilege only the state/ANC can confer.
It is impossible for monopolies to exist in free markets. The moment any business starts to make above-average profits in a free market, others move in, competition becomes standard, and it always results in efficiency.
But when the state grants control of a trade or commodity to an individual (or cartel) then no one can legally compete. This is a true monopoly, which guarantees inefficiency.
Eskom is a monopoly, South African Breweries is an oligopoly. You are allowed to compete against SAB — many small breweries do so all the time. Try competing with Eskom and see how far you get.
The appalling truth of nationalisation is that it absolutely monopolises the industry concerned — yet we are subjected to childish economic policy ideas dressed up in revolutionary rhetoric: the reality is that nationalisation is really monopolisation.
So next time you hear the cry “Nationalise the banks”, please do the translation: it’s “Let us monopolise the banks” — a dreadful idea. Ken Irwin, Cape Town, via e-mail