Sunday, August 30, 2015
47 A note on Business Cycles
There are three types of business cycle indicators that are reported on a) The composite leading business cycle indicator which for example includes the number of residential building plans passed, and the interest rate spread. It also looks at the percentage change in the composite leading business cycle indicators for South Africa’s major
trading-partner countries, and changes in the US dollar based export commodity
price index.
Then these is the composite coincident business cycle indicator.
and the composite lagging business cycle indicator.
Wednesday, August 26, 2015
Monday, August 24, 2015
Wednesday, August 19, 2015
44. Why not Free Market Capitalism?
Why would one not be a free market capitalist? Let this be the legacy of the African Renaissance. The awakening of the African giant.
If , in a market economy, the government simply allows and then protects the private ownership of property and the right to the voluntary exchange of labour, goods and services through consenting participants. A society of peace and stability within which people live their lives without fear of confiscation through taxes and expropriation for the common good. Where willing buyers and sellers meet in an unfettered marketplace where the value of goods and services are determined by buyers and sellers that are allowed to trade freely without subsidies and price controls, tariffs and special licences and controls to stem the free flow of ideas and goods and services.
If, in a free market economy people can trade with their property and labour in any way they see fit, as long as they not act in a way that would infringe on others to be have in a similar way and without force or the threat of force or acting in a fraudulent way. Where individuals take responsibility for their actions and cause no damage to others lives and property. Where there is a free movement of people, goods and services between nations and states.
A free market capitalist society where the role of the state is not to promote the interest of any one group, where it sees its role as the protector of property rights of all and cherishes individual liberty and the rights of groups to promote their groups as long as it does not done in a way that it offends basic human and individual rights.
A free market where economic growth is high because of a low tax regime, where people spend more time and effort on creating wealth than on efforts to protect themselves from the tax authorities. Where the government upholds a policy of protecting the value of the currency and therefore takes no inflationary actions. Where nobody is granted any special privileges on the basis of race or gender and there are no special subsidies, tax concessions, import controls, tariff protections granted to favour some special interest groups. Where political power and influence is curtailed to the essential services of foreign relations, the army, the judiciary and internal safety and security.
A free market where rules are kept simple and understandable, where you would not find unrealistic building, zoning, and other restrictions on trade and costly process involved in setting up of businesses, the subdivision of land and the meeting onerous regulatory requirements when starting enterprises.
A society where the government allows communities and sub-communities a bigger say in those decisions that affect them directly.
Why not free market capitalism?
Many of the ideas expressed here have their origin with Marc Swanepoel - previously Director of FEBDEV.
Eustace Davie Capitalism, free markets, economic freedom and free enterprise all have in common that they consist of voluntary exchange between individuals free of third party intervention. Where is the evil to be found in voluntary exchange between individuals? It is force and fraud that are the evils that hamper progress towards a civilisation that is epitomised by peace and freedom. It is incongruous that the most ardent critics of "capitalism" are ferocious in their support for collective violence against those with whom they disagree.
Tuesday, August 18, 2015
43. Equal pay for equal work
On 702:
Gender pay gap in the workplace
"The principle of equal pay for equal value remains elusive in South Africa. Women continue to earn less than their male counterparts despite the enactment of legislation to promote equality. The South African gender pay gap is estimated, on average, to be between 15%-17%."
This morning we speak about why the pay gap persists and what needs to be done to correct the situation." (Government has embarked on legislated non-discrimination, titled: equal pay for equal value which is detailed in the Employment Equity Act).
The answer: It will stay elusive until the law is removed. If a person is faced with a choice A or B, the price of A and B is the same, but the perceived value of A is greater than B, A will be chosen. That is normal human behaviour whether you are selecting a cake to eat, shoes to wear or your life partner. Why would it be different when you select an employee? One cannot legislate that people not have preferences, biases or discriminate on the grounds of reasons that they might not even know or understand themselves - it is for this reason that there may exist a preference to select men for certain positions and women for others. To force an equal pay regime onto situations like this one will unfairly force the decision maker to select in favour of the bias that he/or she holds - exactly the opposite of what the act's intentions are!
The only way to resolve the situation is to allow the person who is being discriminated against to be able to attain some competitive advantage. So, often when a person, in this case a woman, wants to do a particular job where there may be a bias to select men (the bias may be based on real issues such as physical strength, or on more subtle and even wrong perceptions) the only real advantage the woman could offer is a lower rate in order to obtain the job. By forcing equal pay for equal work, the law is really forcing the hand of the employer in this case to select the man. An understanding of economics will help to find a solution - not the law.
C.M. Heydenrych
September 2015
The answer: It will stay elusive until the law is removed. If a person is faced with a choice A or B, the price of A and B is the same, but the perceived value of A is greater than B, A will be chosen. That is normal human behaviour whether you are selecting a cake to eat, shoes to wear or your life partner. Why would it be different when you select an employee? One cannot legislate that people not have preferences, biases or discriminate on the grounds of reasons that they might not even know or understand themselves - it is for this reason that there may exist a preference to select men for certain positions and women for others. To force an equal pay regime onto situations like this one will unfairly force the decision maker to select in favour of the bias that he/or she holds - exactly the opposite of what the act's intentions are!
The only way to resolve the situation is to allow the person who is being discriminated against to be able to attain some competitive advantage. So, often when a person, in this case a woman, wants to do a particular job where there may be a bias to select men (the bias may be based on real issues such as physical strength, or on more subtle and even wrong perceptions) the only real advantage the woman could offer is a lower rate in order to obtain the job. By forcing equal pay for equal work, the law is really forcing the hand of the employer in this case to select the man. An understanding of economics will help to find a solution - not the law.
C.M. Heydenrych
September 2015
Sunday, August 16, 2015
42. Stardust Investments
An investment company that focuses on creating a wealth repository for individuals - to enable individuals to contribute to securing an income for themselves if they live beyond the normal points of demise (have funds available to pay for amenities when normal sources have been depleted, and not have to be dependent on the state to do so).
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