How will fes­tiv­i­ties ben­e­fit metro?

The Herald (South Africa) - - Your Views -

In The Her­ald on Wed­nes­day you re­ported on the pro­posal at a meet­ing of the Nel­son Man­dela Bay metropoli­tan coun­cil to repri­ori­tise the spend­ing of R700m of loan cap­i­tal in such a way that R45m could be spent on fes­tiv­i­ties (“Why metro wants R700m loan).

Since the Mer­can­tilists of the 15th cen­tury the ques­tion is asked when a gov­ern­ment – ap­pli­ca­ble to lo­cal gov­ern­ment as well – should fund ex­pen­di­tures from taxes and when from loans.

For about 400 years from the time of the Mer­can­tilists, econ­o­mists found only one jus­ti­fi­ca­tion for loan fi­nanc­ing – an emer­gency.

With­out ex­cep­tion wars were the stan­dard ex­am­ple given.

Are fes­tiv­i­ties emer­gen­cies? In 1855 Ger­man econ­o­mist Carl Di­et­zel was the first per­son to sug­gest a jus­ti­fi­ca­tion other than an emer­gency – to es­tab­lish some­thing of last­ing util­ity.

What is last­ing about fes­tiv­i­ties?

In to­day’s ter­mi­nol­ogy Di­et­zel’s “last­ing util­ity” is called pub­lic spend­ing on in­fra­struc­ture.

What in­fra­struc­ture will fol­low from fes­tiv­i­ties?

CVR Wait, pro­fes­sor emer­i­tus, depart­ment of eco­nomics Nel­son Man­dela Univer­sity

Pic­ture: EU­GENE COET­ZEE

COUN­CIL MEET­ING: The Nel­son Man­dela Bay coun­cil meet­ing held at the Nan­goza Jebe Hall in New Brighton, where a pro­posal was made to ob­tain a R700m loan

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