Land Redistribution will not make us richer

[Philip Copeman]

The idea that "Land has been stolen" and is currently occupied by thieves, and can make us all more wealthy by non market related redistribution, has many flaws. I am an African, a Pan Africanist. I want to see Land redistribution and restitution under a means that we all benefit, particularly those from whom it actually was stolen and who have battled the ANC for 20 years to get a fair hearing. However we want the Capitalists to keep investing in South Africa. We want them to keep buying Land and keep improving it. Land restitution and distribution, without a fair market system will not make us richer.

Gold Platinum and oil, all lie way under ground and have been there for millions of years. It is not Land that unlocks them. It is Capital that unlocks them. Capital, Entrepreneurship and a great deal of luck. Capital is a demanding mistress. Capital is completely elusive and in the hands of one person it grows, in the hands of another it withers. Successful entrepreneurs are those that are able to transfer resources from low preforming areas to high preforming areas. However no matter what its shortfalls, Capital offers one very enticing proposition. It is simply the most efficient way to accumulate wealth. Take away the Capital and it is just - dust.

Very few people want to become entrepreneurs, because simply holding onto Capital is a very difficult process. That is why we say - "A fool and his Capital are soon parted". It is a natural reaction to believe that Capital can easily be transferred in ownership. If this was easy, then the BEE system would not have been such a spectacular failure. The BEE implementation of the ANC, has effectively robbed the African people for the benefit of a few (mostly white). Can this be cured with "Broad based" BEE ?- sadly the same result will likely happen. Any benefits derived from Broad based BEE, will soon get converted into consuming goods made by Capitalists rather than invested to increase Capital and the cycle will turn once more.

Under the Capitalist system, OVERALL participants reach maximum wealth. Botswana and South Africa are the most unequal of African Nations. They are also the richest. The irony is that poor in South Africa and Botswana are richer than the average African. This is why Africans flood towards these unequal societies. The same is true of the rural/urban argument. We don't have a movement of people from cities to country. Rural Land is cheap. It is Capital that has the value. Urban Land with Capital improvements is expensive. The idea that we are are trying to get back to the nineteenth century to become pastoralists is naive dreaming. It is simply cheaper to buy milk at a super market than it is to produce it yourself!

The failure of the "stolen Land" argument applies in time as well. Real Capital has been made in the last 10 years, not in the 150 that preceded it. It is interesting to note that many of the richest Capitalists in South Africa, no longer make their money from inside South Africa. South Africa under the ANC Government, may attract foreigners (Britain is biggest) but the South African rich and the socialist policies of the ANC have caused our top Capitalists to seek returns elsewhere. The Land and particularly the land that has been Capitalised, has been done so out of profits made elsewhere. That is Stellenbosch. Would we prefer that the Capitalists spend their profits (I emphasise profits made elsewhere) buying and Capitalising Land in Switzerland or the UK? This is one of the saddest legacies of the ANC.

It is not all bad. As the world stands now, the rich get richer and the poor get richer. The difference is the rate and the problem is the inequality. The cost of this new wealth is envy. 99% of us hate this inequality, 1% are uncomfortable, but 0% of us know what to do about it. Worrying about who occupies Land is a distraction. The idea that you can move resources from areas of high growth to areas of lower growth and be better off defies logic. Frustrating as it is, you can't make the poor richer by making the rich poorer.

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