Despite the benefit of over two centuries of history to look back on when formulating economic policy, successive administrations of the new South Africa have eschewed human ingenuity in favour of state intervention.  Today, the State looms so large over the economy that there is little room left for the individual to demonstrate ingenuity. A slate of government policies (RDP, GEAR, ASGISA, NDP) have found strong expression in support of “leave it to me” and State-Owned-Enterprises (SOEs).  The problem is that SOEs operate in creative domains whose fundamental underlying ingredient of success is human productivity.  In such domains, outcomes follow a Pareto Distribution where there is wide disparity between businesses that are successful and those that fail.  Profits are distributed away from SOEs to their competitors (e.g. SAA vs. KLM) or other players in the value chain (Eskom vs. Exxaro).  Winner-take-all outcomes are not what the State’s redistributive ideology are trying to achieve.  Incessant attempts to panel beat a Pareto Distribution into a Normal Distribution demonstrates that the Government does not appreciate the complexity of the problem it is trying to solve.  Normal Distributions exist in factors such as intelligence, cognitive ability, motivation, and so on.  These distribution of these factors does not follow race, gender, or religious traits as the Apartheid government pretended for so long.  Had the government limited itself to creative legislation in Parliament to democratise and regulate these factors and allow human ingenuity to solve local problems, the country would not be on the cusp of systematic risk in energy, water, education, health care and the capital markets.

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