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South Africa: the Solution Goes on Selling and Selling SOUTH AFRICA THE SOLUTION LEON LOUW & FRANCES KENDALL FOREWORD BY CLEM SUNTER AMAGI PUBLICATIONS I· iv AMAGI PUBLICATIONS (PVT) LTD PO Box 65, Bisho, Ciskei, PO Box 92385, Norwood 2117 (SA Representative) First published March 1986 2nd Impression June 1986 Revised edition November 1986 2nd Revised edition April 1987 3rd Revised edition March 1989 Cover concept by Gill Marshall Cover illustration by Bernie DeHaas Maps and Figures by Aubrey Lamour Cartoons by Walter Pichler © Frances Kendall Louw and Leon Louw, 1986 ISBN No 0-620-09371-4 All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without the prior permission of the publisher. Typeset, printed, and bound by The Natal Witness Printing and Publishing Company (Pty) Ltd. Cover colour separations by Photoscan (Pty) Ltd., Johannesburg. v To the future of South Africa vi Contents Acknowledgements xii Foreword xii Introduction xiv Part one: The history 1 Black South Africans: Their rise and fall 3 Tribal society – Early economy – Political and social structure – Trade – The Mfengu: Natural entrepreneurs – What went wrong? – A people dispossessed – Natal– Transvaal and OFS – A golden age forgotten. 2 The rise of Afrikanerdom 19 The Afrikaner nation – A history of rugged individualism – The seeds of Afrikanerdom – The trekboers – The Cape Patriots – British rule and policies leading to the Great Trek – The Great Trek – Voortrekker republics–The Transvaal– Orange Free State – Conclusion. 3 The rise of apartheid 31 Lord Milner's contribution to racial conflict – The Native Land Act – The Indians – Militant white trade unionism – An unholy alliance – Apartheid and socialism – The United Party – The 'Swart Gevaar' – The fruition of apartheid – Comment. Part two: The status quo 4 White capitalism 47 Are white South Africans free? – Economics: The root cause – Guild socialism – Minimum standards vii regulations – Agricultural interventions – Rent control – Price control – State monopolies – Labour – Education – Conclusion. 5 Black Socialism 59 Before 1970 – After 1970 – Discretionary law – Does apartheid benefit whites? – Ethnicity and achievement. 6 Political unrest – Causes and cures 67 Causes – The economic recession – Over-regulation – Unfulfilled expectations – The failure of reform – Bureaucratic sabotage. 7 The political status quo 73 The false left–right dichotomy – Tricameral parliament – African National Congress (ANC) – Azanian People's Organisation (AZAPO) – Afrikanerweerstandsbeweging (AWB) – Conservative Party (CP) – Herstigte Nasionale Party (HNP) – Inkatha lenkululeko (INKATHA) – Labour Party (LP) – National Forum (NF) – Natal Indian Congress (NIC) – National Party (NP) – National People's Party (NPP) – Democratic Party (DP) – Pan African Congress (PAC) – SABRA – Sofasonke Party – Solidarity – United Democratic Front (UDF) – Trade Unions: COSATU – CUSA – FOSATU – SACLA – TUCSA – General – Homeland Political Parties – Other pressure groups – Conclusion. 8 The redistribution of wealth 93 An equal distribution of wealth or poverty? – Economic myths – The zero sum fallacy – The rich get richer and the poor get poorer – Black socialism – Income gradients – Practical difficulties with redistribution – Compensation can be made. 9 Affirmative action: Fashionable racism 103 Negative economic effects – Freedom to disassociate – Property rights – The market is colour-blind – The bittereinders – Freedom includes the right to be wrong – Birds of a feather – Conclusion. viii Part three: The solution 10 A free society 111 What is a free society? – The myth of the 'golden mean' – Democracy – Principles of good government – Government by law or discretion – Power struggle – The necessity for constitutional entrenchment – Specific issues – Decentralisation of government. 11 Cantons: A political solution 121 Why is Switzerland relevant? – The Swiss system – The cantons – Communes – The Federal Assembly – The National Council – The Council of States –The Federal Council – General comments. 12 A canton system for South Africa 129 Determination of cantons – Judicial Delimitation Commission – Referendum: the final arbiter – Homelands and national states – Structures and powers of cantons – Political diversity – Voting – Administrative diversity – Economic diversity – Citizenship – Advantages of diversity – The demonstration effect – Freedom of movement – Secession – Expulsion. 13 Problems arising from a canton system 139 Unequal wealth – Viability – Does diversity cause confusion? – Problems resulting from freedom of movement – Bureaucratisation – Does a canton system need a sophisticated population? 14 Central government in a canton system 147 Structure – A People's Congress – A Delegates' Congress – The cabinet and central government departments – Treaty functions of central government – Citizenship – Voting – Depoliticisation – Defence – Racial Discrimination. 15 Bill of Rights 157 Introduction – Personal rights: Articles I to XII – Canton rights: Articles XIII to XX – Explanatory notes. ix 16 Protection of minorities 167 What are minority rights? – The ‘Swart Gevaar’ – Entrenched minority protection. 17 Socio–economic solutions 173 Canton powers – Advantages of a free market: recapitulation – Louw's eleven laws of government intervention – Taxation in a canton system –Transport – Agriculture – Mineral wealth – Welfare vouchers – Education – Labour relations and trade unions. 18 The legal order 189 Common law – Legislation – Discretionary law – Limited legislation – The importance of independent judiciaries – South African courts: the status quo – Canton courts – Recognition of customary law – Conflict of law – Legal precedent – Central court of appeal– Interpretation of the Bill of Rights – Conclusion. 19 Strategy 199 Fertile soil – The present government role – Implementation of a canton system – Decentralisation and devolution – A popular movement. Part four: The future 20 From communism to laissez faire in one country 211 KwaNatal – Cape Flats canton – Workers' Paradise– Witwaterberg – Harrismith-QwaQwa (HQ) – Cisbo. Notes 225 Bibliography 235 Index 238 Groundswell 252 x Maps 1 Eastern Cape – 1800s 8 2 Voortrekker routes 26 3 Magisterial districts – Cape 130 Figures 1 False left-right dichotomy 74 2 Diagrammatic representation of high and low income gradients 98 3 A free vs. an unfree society 112 4 Relative bureaucracy in a unitary system and a canton system 144 5 The canton system 148 Charts 1 White political parties 36 2 Black political and labour groups 82 Cartoons 1 Cape Flats 213 2 Workers' Paradise 215 3 Witwaterberg 218 4 H-Q 220 5 Cisbo 222 xi Acknowledgements This book is the culmination of many years of research, study, thought and debate, and reflects the influence of many great thinkers, the most important of whom are Ludwig von Mises, Friedrich A Hayek and Murray Rothbard. Our first thanks go to Charles Koch, who persuaded Leon to embark on this book, and helped make it possible through his financial support; also to the Manhattan Institute (USA) for its generosity. In our immediate Circle of friends we are indebted to Eustace Davie, Libby Husemeyer, Graeme Levin, Terry Markman and Michael O'Dowd for comments, insights and ideas. We thank Loraine Harris for her tireless efforts to produce a perfect manuscript, Joan Evans and Riana de Beer for their fortitude in the face of mountains of typing, and Roger van Niekerk for finding facts and figures at short notice. Libby Husemeyer did the editing and proof-reading, and Graeme Levin ensured that the book was printed and distributed in double-quick time. We also thank Anamie Gardner, Birthe and Nick Taylor and Kerry Welsh for starting Groundswell, and for their energy and optimism. Our daughters, Justine, Camilla and Kate, cheerfully put up with very little attention for three and a half months. Finally, we congratulate each other for managing to preserve our marriage and our sanity under conditions of extreme stress! xii Foreword This marvelous book has been on the shelves of bookshops for three years now. The beat goes on: sales continue to grow. I have read the book twice, in its South African and American formats. It was just as refreshing the second time around. Its most beguiling feature is its optimism in human nature. Left to their own devices, people produce a more prosperous society than if ordered into little boxes by intellectuals and academics. "Power to the people" should mean what it says: each individual has maximum power over the conduct of his own affairs. Swiss society enshrines this principle with its emphasis on devolving as much power as possible to local communities, and with its use of referenda as a means of direct democracy. I was talking to a luncheon club of Swiss businessmen just outside Johannesburg last year. Before the presentation, I asked the members of my table, “Who is the most famous Swiss person alive today?” It took them ten minutes to come up with an answer, and then it was a Swiss skier! No politicians, no famous world statesman - in fact, there were people around the table who did not even know who the current head of government was. When I expressed my surprise that citizens of such an illustrious nation should take so long to think of someone famous, one man replied: “In Switzerland, we have leadership, not leaders. The ordinary man in the street is the champion.” So there it is. Success does not need messiahs. It requires a system of government
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