Free Markets and BEE

My philosophy is closest to that of Objectivism – made famous by Ayn Rand, author of “The Fountainhead” and “Atlas Shrugged”. Amongst others this includes a capitalist or free market economy. It also presumes individual freedom as an absolute.

Now BBBEE does not imply a free market, so it was a quandary for me to be involved with an activity contrary to the spirit of free market economics, or Objectivism. In analysing this I soon realised that BBBEE is not as large infringement on the free market as I first thought. There are hundreds of other laws that are far more onerous – tax, PAYE, labour issues – the CCMA, minimum wage legislation, licenses – eg liquor licenses, mining licenses etc.

From a theoretical viewpoint BBBEE as it stands actually has no effect on the free market. It is not a law that prohibits or demands you do something. If you chose to ignore the BBBEE Act completely you will not go to jail. You will not get a criminal record. All that will happen is your customers may choose not to buy from you. If your customer is government, then government expenditure is a bigger infringement of the free market than the requirements of the BBBEE act anyway.

I see BBBEE as a social requirement. We need to redress the wrongs of the past – it is inconceivable that 10% of the people can control 90% of the economy and 90% of the best jobs and then expect the remaining 90% of the people to be happy and satisfied. I’ll cover why we need BBBEE in more detail in other posts. Right now I am satisfied that the requirements of the BBBEE act is a sufficiently low infringement of the free market that the social reasons for having it outweigh the free market disadvantages. Anyone who complains that BBBEE is against the principles of the free market is correct – but let him first consider and complain about the many other laws and regulations before getting to BBBEE!

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