Leave it to business

“It is the height of conceit for the government to believe it can devise a system that will work better than an unimpeded market.”

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Words of wisdom from Temba Nolutshungu, a director of the Free Market Foundation, in an article on the liquor industry in The Star of 14 March. I’m not about to investigate the liquor trade, but I’m using the above extract as the theme for this week’s column.

“In any growing economy, freedom to trade is a fundamental right. Without any interference from government other than to ensure that there is no force or fraud involved, firms must be allowed to implement strategies that will make their businesses profitable,” continues Nolutshungu. “The market, when free, forces companies to be competitive, efficient, and above all, to supply goods that satisfy the needs and wants of consumers.”

Commission selling
On our fresh produce markets, commission selling is the truest form of price discovery. History has shown that artificial interventions from government simply don’t work. Yet, despite the positive benefits of the commission system on our markets, we find ourselves drowning in a ‘sea of legislation’.

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In the training I do for market agents there is an entire module dedicated to the laws that govern market agents. If followed to the letter, these would have every market agency reduced to complete inertia for fear of legal repercussions. The problem
is that politicians and bureaucrats can’t fix problems because the former are governed by political agendas and self-interest, while the latter are operating in a massive cauldron of ineptitude and red tape.

So what do they do? They make a law. In this way they can show they’ve done something to address the issue. The fact that it would take an army of people to truly implement the law is conveniently overlooked. I’m not advocating a ‘free-for-all’ society. That would be crazy. As humans we need parameters in which to operate and to understand the consequences of crossing those boundaries (laws).

Beyond that, as Nolutshungu says, “business logic dictates that firms refrain from practices that would cause them to be regarded as societal pariahs.” A lot of this has to do with ethical values, which prompts the question, “Are we practising what we’re preaching when it comes to ethics in business?”
Contact Mike Cordes at [email protected]. Please state ‘Market floor’ in the subject line of your email.