I keep meaning to respond to Michael Meadon’s critique of my position on global warming, but the real world keeps intervening. I’m busy writing about currency intervention, after a fortnight in which I simply had to tackle the topical and thorny subjects of Zimbabwean immigrants (give them citizenship, I wrote), as well as the National Health Initiative and the water crisis (about which I warned in 2008). Mr Meadon, I have not forgotten your post.

The current rise in food prices is very, very dangerous. Not because food will be more expensive, but because chances are the government will intervene to prevent this.

The unions in South Africa have already called for a food price freeze. This merely serves to show that they didn’t bother paying attention in Economics 101. Nor bothered to witness the results of price controls in our neighbouring no-crisis zone, Zimbabwe. If you cap prices, you cause shortages. Simple. Fact. Nothing can change that except complete nationalisation of the entire supply chain, and even then, the difference will be made up from tax, so lower real incomes will keep the real price of food the same.

The danger is that there are enough communists, socialists, interventionists and developmental-statists in government that they might just listen to the unions. If only to pander to the population and avoid the counter-productive impact of strikes and riots.

A recent commentary by the grandiloquently named Swaminathan S. Anklesaria Aiyar, picked up by the Wall Street Journal Asia, makes a good example of India. His conclusion is similar to mine, posted a few weeks ago:

India’s current food price problem isn’t a market failure. Rather, it’s a government failure to allow markets to work. The only sustainable solution is to pull back the subsidies and protections. But sustainability is the last thing on the minds of politicians competing to win the next election with ever-higher subsidies.

It’s a simple truism that in a free market, the solution to high prices is high prices. High prices drive prices down by stimulating production and discouraging unnecessary consumption. It is also true, however, that artificial costs and inefficiencies introduced into the supply chain by government intervention merely serve to perpetuate the supply-demand imbalance.

Our government should indeed take drastic action, by removing any and all regulations, subsidies, tariffs and other red tape from the agricultural sector. It should take drastic action to ensure that any pending land transfers are expedited (or cancelled) as quickly as possible, to prevent otherwise productive commercial farm land lying fallow. It should take drastic action to guarantee farmers — including new farmers on restitution or redistribution lands — gain full title to their property, so they can raise working capital by using their land and equipment as collateral. It should take drastic action to complete its long-overdue audit of state-owned land, and make suitable land available to emerging farmers and communities. And it would do well to take to heart the lessons Aiyar cites from India’s agricultural policy and its history of government intervention.

Everyone asks what government can do. Instead of acting innocent and blaming corporate collusion, this is what the government can do. This is positive action. This is taking the moral high ground. And it had better do these things quickly, or people might start thinking the unions actually have the right idea. I can think of no more dangerous result of food price inflation than that.

In the US presidential election, candidates pay millions to flight campaign spots in states where primaries or elections are to be held. Each is tailored to the region in question. Though they’re often banal, promising the undeliverable, pandering to prejudice or exploiting economic illitaracy, the idea of targeting your limited campaign funds seems sensible. It is also possible in a free and fair society.

There is, therefore, a terrible irony in the fact that candidates standing in opposition to Zimbabwe’s brutal dictator, Robert Mugabe, in tomorrow’s election there, are buying advertising in newspapers and on prime-time TV in neighbouring South Africa. Both Simba Mokoni, the outcast from Mugabe’s ZANU-PF party, and Morgan Tsvangirai, leader of the main opposition Movement for Democratic Change, have spent a lot of money here.

There are several reasons for this. One is that a large number of Zimbabweans are in South Africa, legally or otherwise, and may be inclined to return to vote tomorrow. (Expats are no longer permitted to vote abroad.) They’re here because they cannot survive with the hyperinflation, empty grocery shelves and political violence — the legacy of Mugabe’s long rule and failed policies — so one hardly needs a survey to tell you that about 100% of them would want to see political change. NGOs are urging the two million or more expatriate Zimbabweans in South Africa — many of whom will risk arrest and deportation in South Africa, or worse in Zimbabwe — to go home and vote.

The more sinister reason is restrictions on free speech and repression of opposition campaigns in Zimbabwe itself. The picture alongside, tellingly named “Policeviolenceagainstanoppo.jpg” was taken last year, and republished on This is Zimbabwe, the must-read blog if you’re following events in Zimbabwe. Its “election watch” series gives a good impression of how free and fair elections are likely to be. Voting districts have been gerrymandered, voter rolls are being tampered with, and election laws have just been amended, contrary to pre-election agreements with opposition parties, to permit police to enter polling stations to “assist illiterate voters” to vote, for example. (In South Africa’s historic 1994 election, there were dozens of parties on the ballot, most voters had never voted before, and illiteracy was a major concern. So the ballot came with pictures of party logos and photos of their leaders, and extensive voter education campaigns were run by the Independent Electoral Commission and a myriad NGOs, explaining how the ballot would work. This elegantly solved the problem. No apartheid-era police officers were needed at polling stations to “help” people vote.)

It is no surprise that Zimbabwe has banned most foreign media. Among broadcasters, the state-owned South African Broadcasting Corporation is one of only two networks permitted a bureau in Zimbabwe (the other is Al Jazeera). SABC rival e-tv says it will be reporting the election diligently, from the Beit Bridge border post. As I was on the Burma issue, and often am on issues of foreign policy, I’m ashamed to call myself a South African, considering the tacit and overt support my country gives to nationalist dictators, communist despots and murderous tyrants, such as that geriatric scum, Mugabe.

For tomorrow, election observers are not permitted, except for the South African Development Community delegation led by South Africa. Why them? Because they were the only bunch of reprehensible clowns to declare the previous election free and fair. The simpering idiots will do so again this year. South Africa’s highest officials have already laid the groundwork for a conclusion that panders to ogre of Harare, as has SADC itself. Human rights campaigners are not so sure.

So political parties are turning to non-traditional means of getting their messages of change out, and those means include campaign advertisements in countries other than where the election is being held.

In words that make him sound like the biggest bully on the school playground (”Just dare try it. We don’t play around while you try to please your British allies. Just try it and you will see.”), Robert Mugabe has threatened dire consequences for anyone who dares dispute the outcome of the election. After all, it’s already rigged, so the outcome is almost a foregone conclusion.

The sad fact is that Mugabe’s sham elections are unlikely to restore freedom to Zimbabweans. They’re unlikely to reverse the economic disaster that Mugabe shamelessly blames on Western sanctions and colonial plots, but are actually the result of wholesale expropriation of land and assets, price controls, cronyism and outright kleptocracy.

Perhaps nothing short of violent revolt will reverse the disaster. I can’t possibly make a case for such a revolt by the people of Zimbabwe, since South Africa’s constitution limits my freedom of speech when it comes to “propaganda for war”, but at Commentary South Africa, John makes a good case, using Tibet as a case in point, why the superficial nobility of peaceful opposition against violent repression masks the fact that it seldom, if ever, produces a free and fair outcome.

That Zimbabwean political candidates are campaigning in South Africa against an 84-year-old ogre merely underscores the limits of “quiet diplomacy” and “peaceful opposition”. While Zimbabweans try to vote themselves a better future tomorrow, I will spend the day mourning the empty breadbasket of sub-Saharan Africa. I will spend tomorrow remembering why free people and free markets (to pilfer a tagline) are the “basis” of “basic human rights”. Why political and economic liberty are prerequisites for a fair, prosperous future.

I wish you well, Zimbabwe. But if wishes were horses, beggars would ride.

A very welcome addition to the South African internet landscape is a new satire site that calls itself Hayibo. I have no idea who runs it, or who writes it, but it’s generally pretty funny stuff. Witness its take on the South African blackouts, for example:

Eskom vows to keep lights on, will burn Zim banknotes

Embattled power distributor Eskom has won the praise of government after vowing to keep rolling blackouts to a minimum by burning Zimbabwean banknotes in some of its coal-fired power stations. […]

If you’re casting about for ways to spend a dreary (and intermittently dark) Monday afternoon, you could do worse than idly browsing your way over there.

This is tragic, in a side-splitting sort of way:

Zimbabwe’s latest inflation figures had been delayed because there were not enough goods in the shops to measure price increases, the state statistical department said yesterday.

It’s instructive for various reasons. The most obvious is that price controls, which Zimbabwe imposed to curb consumer price inflation, cause shortages. Eventually, those shortages become critical, as they have done now. Pity it’s the Zimbabwean people who pay the price for their government’s failure to grasp Economics 101, but it’s hardly surprising.

The other point to make is that the consumer price index that is usually held up as a measure of inflation is, in fact, nothing of the sort. It measures a possible effect of inflation, perhaps, but it does not measure inflation itself. Inflation is not a general increase in price levels. Inflation is an increase in money supply.

For an illustration, consider this chart, which measures US money supply against the value of the US dollar:

As the value of a dollar decreases, consumer prices will, of course, tend to increase too, but that increase is not in itself inflation. An Austrian School monetarist, Frank Shostak, has this to say by way of defining inflation:

The subject matter of inflation is the debasement of money. For instance, historically inflation originated when a ruler would force the citizens to give him all the gold coins under the pretext that a new gold coin was going to replace the old one. In the process, the king would falsify the content of the gold coins by mixing it with some other metal and return to the citizens diluted gold coins. On account of the dilution of the gold coins, the ruler could now mint a greater amount of coins for his own use. (He could now divert real resources to himself). In short, what was now passing as a pure gold coin was in fact a diluted gold coin. The expansion in the diluted coins that masquerade as pure gold coins is what inflation is all about. As a result of inflation, the ruler could engage in an exchange of nothing for something.

Under the gold standard, the technique of abusing the medium of the exchange became much more advanced through the issuance of paper money unbacked by gold. Inflation therefore means here an increase in the amount of paper receipts that are not backed by gold yet masquerade as true representatives of money proper, gold. Again the holder of unbacked money can now engage in an exchange of nothing for something.

In the modern world the money proper is no longer gold but rather paper money hence inflation in this case is purely the increase in the stock of paper money. Please note we don’t say as monetarists are saying (sic) that the increase in the money supply causes inflation. What we are saying is that inflation is the increase in the money supply.

Note that inflationary monetary policy remains, today, a way for governments to “inflate away debt”. But more pertinently for Zimbabwe, this shows that inflation can be measured simply by checking the records of the central bank: how much money did it print last month, as an annualised percentage of money in circulation? That’s inflation.

Measuring inflation does not require shelves full of consumer goods of which prices can be determined. Why would such a measurement be meaningful if prices are capped by government anyway? More pertinently, why would such a measure be meaningful if the shelves are empty in the first place?

I don’t mean “Mugabe’s Moses” in the Afrikaans sense (”Mugabe se Moses”), which, roughly translated, means “screw Mugabe”. On the other hand, it appears that he did get screwed.

Rotina Mavhunga, also known as Nomatter Tagarira, a spirit medium no doubt well-versed in exploiting gullibility, recognised that the lunatics in charge of Zimbabwe might be taken in by an outlandish Moses-at-Horeb scheme to strike — excuse the pun — oil.

Details of this story appear first to have been reported in Zimbabwean newspaper, The Herald. Clemence Manyukwe of the Financial Gazette also reported on the case, claiming to have seen court documents recounting the swindles of Tagarira.

I’ll let Jan Raath’s version in the Times of London tell the tale:

When Nomatter Tagarira, a spirit medium, claimed that she could conjure refined diesel out of a rock by striking it with her staff, ministers in Robert Mugabe’s Government believed that they might have found the solution to Zimbabwe’s perennial fuel shortage.

After witnessing her apparently miraculous gift they gave her five billion Zimbabwean dollars in cash (worth £1.7 million at the start of the year but now worth one seven-hundredth of that) in return for the fuel. Ms Tagarira was also given a farm, said to have been seized from its white owner during Mr Mugabe’s lawless land grab, as well as food and services that included a round-the-clock armed guard on the rock in the district of Chinhoyi 60 miles (100km) from Harare, the capital.

More than a year later officials realised they had been duped. Ms Tagarira is now in custody, awaiting trial on charges of fraud or, alternatively, of being “a criminal nuisance”. Details from court papers published this week said that over 15 months, until July this year, Ms Tagarira convinced Cabinet ministers, ruling party heavy-weights and top army and police officers that by striking the rock with her staff she could produce enough fuel to supply the country for 100 years.

The legal firm representing her told The Times that she had been refused bail and no trial date had been set yet.

“It’s an outlandish story but the people in government who believed this are the same ones who believe that Mugabe’s official policy of printing money will end inflation,” said an economist, who requested anonymity.

The story continues with details of how the official “task force” determined whether she was speaking the truth: they put the stuff in their lorries and drove off. QED.

If this story is indeed true, the world should thank the sorceress of many names for sacrificing her liberty to prove the degeneracy, gullibility and just plain stupidity of Zimbabwe’s government officials. It should thank the witch of many frauds for risking torture and death to show that Robert Mugabe doesn’t need quiet diplomacy; he needs a padded cell.

(Hat tip: Blue Crab Boulevard.)

Zimbabwean activist Natasha Msonza touches on a sensitive topic, all the more dangerous when spoken in a country where the ruling kleptocracy routinely blames the country’s economic problems on white racists, neo-colonialist farmers and imperialist foreigners. Referring to a column published in the Zimbabwe Independent, she notes several telling instances of racist behaviour, and writes:

I couldn’t help agreeing with Muckraker when he/she wrote: “…primitive racism is now the official creed of Zanu PF.” Now before anyone starts labeling me an unpatriotic born-free who doesn’t understand the sovereignty our ancestors died for; will the real racists please stand up?

(Via Sokwanele.)

Respect to Kader Asmal, former cabinet minister and senior ANC national executive council member. He has stood up and spoken out, publicly and strongly, against the Zimbabwean tyrant, Robert Mugabe, saying that he should have done so sooner. He also disputed the view that Zimbabweans must solve the crisis for themselves.

Our government has often asked, when defending its policy of “quiet diplomacy” towards Zimbabwe, what exactly critics expect it to do, as if the only alternative to “quiet diplomacy” is a full-scale invasion and regime change. There are many alternatives, and the least it can do to appear honourable on the subject is send a vocal message of condemnation of Mugabe’s depradations.

Read the rest of this entry »

The annual Economic Freedom of the World index for 2007 has been published. Zimbabwe isn’t exactly a winner, but South Africa’s performance is merely average. According to the report:

The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Forty-two data points are used to construct a summary index and to measure the degree of economic freedom in five broad areas: (1) size of government; (2) legal structure and security of property rights; (3) access to sound money; (4) freedom to trade internationally; and (5) regulation of credit, labor and business. This year’s index includes a number of new components based on the World Bank’s Doing Business ratings.

South Africa’s score rose slightly, but it slipped to 60^th in the rankings, from 54^th in 2006 and 36^th in 2005, as other countries overtook it and new countries with higher scores were included among the 141 evaluated. The report is copublished by the Cato Institute, the Fraser Institute in Canada and more than 70 think tanks around the world.

The Free Market Foundation (FMF) launched the report at separate events in Johannesburg and Cape Town today. I was unable to attend, but the organisation’s executive director, Leon Louw, said in a statement:

After impressive gains from greater political and economic freedom achieved in and after 1994, SA’s overall economic freedom score has stagnated during recent years, although there have been significant changes in individual components in the index.

This year’s report notes that economic freedom remains on the rise, and also confirms that it is contagious — albeit not as highly as some would like to think. “Countries ‘catch’ about 20% of their average geographic neighbors’ and trading partners’ levels of, and changes in, economic freedom,” argue the authors, Russell S. Sobel of West Virginia University and Peter T. Leeson of the Mercatus Center at George Mason University. According to the announcement:

The average economic freedom score rose from 5.1 (out of 10) in 1980 to 6.6 in the most recent year for which data are available. Of the 102 nations with scores in 1980 and in the most recent index, 90 recorded improvements in their economic freedom score, and just nine saw a decline. In this year’s index, Hong Kong retains the highest rating for economic freedom, 8.9 out of 10, followed by Singapore, New Zealand, Switzerland, Canada, United Kingdom, and the United States.

Zimbabwe, which isn’t a failed state according to its ambassador to the US, is ranked dead last, behind Myanmar. “[Prosperity, security, freedom and life expectancy] are part of a fundamental base needed to build a free and prosperous nation. A quick glance at the countries scoring lowest on the index quickly shows that without economic freedom, especially protection of property rights and the rule of law, there is little individual freedom and little in the way of prosperity,” said Temba Nolutshungu, Cape Town director of the FMF.

South Africa’s scores in each category changed as follows:

• Size of government: remained unchanged at 5.5.
• Legal structures and security of property rights: improved from 6.6 to 7.0.
• Access to sound money: declined from 8.2 to 8.0.
• Freedom to trade internationally: declined from 6.9 to 6.6.
• Regulation of credit, labour and business: improved from 6.4 to 6.8.

The full report is available from the Cato Institute or the Fraser Institute. Eustace Davie, a director at the FMF, discusses the report in an article of the week. Because this link may not last, I’ll reproduce the full text below the fold.

Read the rest of this entry »

Over at Politics.za, they note an interesting article in The Telegraph, which reports that Britain has been told by China that it would withdraw all support from Zimbabwean president Robert Mugabe, save humanitarian aid. If true, this would be a dramatic shift in policy, and could precipitate the final collapse of the regime. Even if Mugabe has not lost his appetite for power.

The economy is already on its knees. With prices having been fixed by government dictat, the only supply of goods and services is on the black market. With wages having been fixed too, nobody can afford them.

It’d be nice to think that the South African government had the foresight to accept Zimbabwean economic refugees and grant them work permits on the basis that their labour and entrepreneurship will contribute to the South African economy. However, the protectionist impulse among the politicians, steeped as they are in socialism and unionism, is too strong. So a refugee crisis is what it’ll be.

On the other hand, the sooner Zimbabwe collapses altogether, the sooner Zimbabweans can get to work rebuilding a new post-Mugabe country. Let’s hope this happens without a war.

Zimbabwe’s ambassador to the US, Machivenyika Mapuranga, speaks to Foreign Policy TV about his nation and its inclusion in the 2007 failed state index at number four, after Sudan, Iraq and Somalia. (Hat tip: This is Zimbabwe.) It’s all a plot, of course. Things are just fine. In fact, Zimbabwe is one of the strongest and well-organised states in Africa. It rocks, it rolls, and shimmies to the beat. If racist homosexual colonialist imperialist in Britain and the US didn’t ban the export of harps to Zim, it would be heaven!

Sadly, the fellow speaks some truth:

In Africa, Zimbabwe is not regarded as a failed state. We are greatly loved and admired by the other 53 African countries.

Including by Zimbabwe itself, one assumes.

The United Nations voted Zimbabwe to be the chairing country of the United Nations Commission on Sustainable Development. … They wouldn’t do that to a failed state!

Actually they would. And they did. Someone should abolish that impotent, corrupt and downright offensive charade of an organisation.

Along with a few dozen other writers, the Mail & Guardian Online has invited me to blog for their new opinion section, called Thought Leader. Not sure about the leader bit, but I sure have a surfeit of thoughts. What follows is an extract from my first post, which went live last week during beta testing:

The upside of an unfree press

Like the charred oak of a toasted wine barrel, an acute struggle for liberty imparts rich vitality to an oppressed media. The all-enveloping mix of peace and violence, calm and trauma, relief and fear, elation and despair creates in reporters a sense of history, and of the role and responsibility they have in its unfolding.

During the last days of South Africa’s own fight for freedom, the then Weekly Mail and the ill-fated Vrye Weekblad were both famous for their fearless, fresh, and gritty reporting. At these papers, many a young reporter learnt the rigours of research, the importance of accuracy, the grave duty to be unbiased.

There are distinct echoes of these papers to be found in The Zimbabwean, a weekly newspaper aimed at the estimated 25% of that country’s citizens who live in exile. On sale in South Africa for just R4 an issue, it puts many of today’s South African newspapers to shame. …

Read the rest over here. Do comment, rate posts and browse around on the site. It’s a pretty cool evolution of the opinion/editorial page idea.