On Friday the Free Market Foundation’s President Leon Louw distributed an emotional ‘Open Letter’ explaining why he is leaving the once respected economic think tank which he co-founded in 1975. In this interview with BizNews’s Alec Hogg, SA’s long-time voice for free enterprise explains how he believes the organisation has lost its way. He is appalled at its politicisation through a ‘cabal’ which has acquired control, reflected in its staff is populated by lawyers rather than economists. Louw has approached the funders of the FMF to request they withdraw their financial support of the organisation which is no longer able to interact across the political spectrum because, he claims, it has become aligned with the Democratic Alliance.
Leon Louw on when his troubles with the FMF began
It goes back actually three, four, even five years. And the history very briefly, is that when I started querying issues of concern regarding finances and I asked the bank for bank statements, they said, sorry, you’re no longer an authorised signatory. I think it was about three years ago. And I said, what? I’m the CEO. Who decided this, the board? So somebody who I presume wanted to hide something did that. I could not get bank statements. I was the boss and I could not pick up bank statements from my own staff.
On the FMF’s involvement with the ANC and other political parties
The ANC right now has the socio-economic impact assessment, which I was consulted by them to introduce. So, even now with the EFF, we’re working with the EFF in a shantytown trying to get them title deeds. So we were always apolitical, not aligned with any other group, liberal, conservative, it didn’t matter. No political affiliation or alignment, all political parties across the spectrum. We even did a presentation on free market economics to Eugene Terre’Blanche’s outfit and the current President Ramaphosa arranged for me to do a presentation on privatisation to the National Union of Mineworkers in the dark days of the struggle. Now you’ve got to have a lot of neutrality, which I have. I am not here to join or advance any interest. I’m here to advance ideas.
On the role of a think tank
It is the think tank’s job to go to them and try and persuade them how to do things better, which is what we do. And we, until literally as recently as last month, had significant policy changes made by the government. And we distinguish, by the way, between the government and the party, as everybody should, that unfortunately fell away under the Nats, under the apartheid regime, and it has never been restored. The distinction between the two. Our job is to influence the government. Our job is to get the government of the day to govern better or less, and that is gone.
On his resignation and what he would like to do
I’ve announced my resignation in three months, which is my contract. I’ve submitted my contract to resign. And I want to be relevant. I want to bring about a freer, better, more prosperous world. And that requires very careful economic policy and thinking. So, for example, I’ll give you a concrete example. When they say expropriation without compensation, you can either rant, which white people mostly do and one or two black people, about how bad it is and how it’s going to cause the economy to decline. Or what you can do is you can say: I understand why you want to do this. Can we find ways that could actually promote growth as well as doing strong land transformation? For example, give every black South African occupying a piece of land ownership, a title deed. We’re talking about 10 million people. We’re talking about more than doubling or tripling the size of the current deed registry and injecting what FNB estimates to be something like over 2 trillion rand into the economy, that can be done easily, positively. You will have more black landowners than white landowners and the economy will be boosted. And to do that, you have to persuade not just the current ruling party, but all parties. You have to actually go to the Freedom Front and the EFF and Action SA and IFP and so on and say, why don’t we do this? This is a way of bringing about land ownership and transformation.
On whether political parties are good or bad
I think it’s very important to realise that all political parties have rotten apples. All the political parties have skeletons in the cupboard, some conspicuously fewer than others. But there is another non-binary way of looking at this. Firstly, are there two ANCs, are there three or four ANCs? I mean, two is too limiting. And what do they do? There are some wonderful people in the ANC with whom I work and whom I’ve got to know and pretty much every other party I could literally say to you people I deal with in pretty much all the parties I consider to be wonderful people committed to the country. Now we can look at what has happened under the ANC or whichever ANC one is talking about. I don’t think it’s any more a single party in any meaningful sense of the word and it should actually have broken up. The alliance should have broken up, really, in 1995 or before. So let’s look at what’s happening. We all see this whingeing about the potholes and about the water supply and the load shedding, well, of course, that’s very, very unfortunate stuff. But I would encourage everybody who’s feeling depressed about South Africa to go to Stats SA and look up all the statistics on the quality of life indices, life expectancy, healthcare, literacy, housing services, whatever you look at, incomes, they’ve all improved. So everything’s been going up, almost everything. Unemployment, of course, has been going down spectacularly and horrifically. But even there, there’s a silver lining on the big dark cloud, which is that more people have jobs in the unrecorded or informal sector. They all working all the time.
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