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Isn’t this the truth

Summary:
Extensive allegations about corruption in South Africa. About which one says:Several of the Watsons’ other BEE partners became part of the country’s new political elite; there was a revolving door, in these first years of the new government, between political appointments and BEE entrepreneurs. “The minute you have a system where people make money just by the connections they have, rather than the work that they do, the system is ripe for abuse,” says the political economist Moeletsi Mbeki, long a staunch critic of BEE. “It’s a recipe for corruption.”Quite so, this is true of systems that allocate economic activity, ownership, legal privilege, on the accidents of social position, the school tie network, race, political party membership and so on. All systems have been used at times and all

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Extensive allegations about corruption in South Africa. About which one says:

Several of the Watsons’ other BEE partners became part of the country’s new political elite; there was a revolving door, in these first years of the new government, between political appointments and BEE entrepreneurs. “The minute you have a system where people make money just by the connections they have, rather than the work that they do, the system is ripe for abuse,” says the political economist Moeletsi Mbeki, long a staunch critic of BEE. “It’s a recipe for corruption.”

Quite so, this is true of systems that allocate economic activity, ownership, legal privilege, on the accidents of social position, the school tie network, race, political party membership and so on. All systems have been used at times and all do spiral into that network of corruption. Some worse than others of course but the direction of travel is always the same.

This being a great merit of markets and simple, pure, cash. If people are able to do whatever it is better than the competition - competition which is free of legal constraint from actually competing - then they should be the people doing that thing. Getting the best results does indeed mean that the economy is going as well as it can given technological constraints.

Further, a market economy has its own feedback mechanism. Those who aren’t the best succumb to that competition and are removed from the economic fray.

Another way to put this being that if politicians don’t have the power to choose favourites then we consumers aren’t subject to the inefficiencies and inadequacies of political favourites. Whether that’s a Duke with a Royal Monopoly or the man the President shared a trench with gaining some favour.

If economic privilege is allocated on anything other than efficiency then the inefficient will gain such privilege to the impoverishment of everyone else. This isn’t a good way to run a society.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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