What’s Holding Up Economic Growth

Three articles in last weekend’s Wall Street Journal offer a sampler of the kinds of government intervention that are hampering the world economy, from South Africa to Detroit to France. On page A8 a headline declares, “Blackouts Stall South Africa Economy.” Why doesn’t South Africa have dependable power? Because the country’s power provider is a government-owned monopoly:

Accidents at South Africa’s aging stock of coal-burning power plants and construction delays at a new one have regularly pushed generating capacity of the state-owned power provider, Eskom Holdings Ltd., below daily demand of about 32,000 megawatts. (my emphasis)

Three pages later we read that “The Motor City’s Regulators are Hitting the Brakes on Regrowth.” How? By denying peaceful enterprisers permission to operate:

The Operation Compliance Initiative [aims] to regulate Detroit’s 1,500 illegal unlicensed businesses. Most operate on extremely low profits and … are often run out of homes. Part of a complex underground economy, they are usually in poor areas. They offer everything from auto parts and electrical equipment, to basic retail and in-house dining—but they all have failed to meet the permitting and licensing requirements mandated by the city and the state of Michigan. (my emphasis)

So the government is shutting down these little businesses.

One page after that “Notaries Public to the Barricades” gives the good news that in France, surprisingly, a genuine reformer is trying to roll back government intervention:

The Bill for Growth and Activity … would demolish longstanding barriers to entry for the legal and notary professions, open up domestic rail lines to competition from private bus companies, fast-track the adjudication of some labor disputes, and lower some of the environmental hurdles developers need to jump to gain approval for new projects. The bill also would require the government to dispose of up to €10 billion ($12 billion) in state-owned assets, primarily in airports and utilities.

That article goes on to say, unsurprisingly, that the special interest groups which benefit from the targeted interventions are objecting:

The protests against these common-sense reforms have already started. First up were the attorneys, notaries and bailiffs, who last week flooded Parisian streets, robes and all, to object to [the] plan to make it easier for recently minted lawyers to start their own practices and to reduce the tariffs and legal privileges currently enjoyed by these “protected professions.”

Economic health depends on private ownership and freedom of exchange. The government of South Africa should privatize Eskom Holdings, Ltd. and open up electricity production to competition. Detroit should repeal its business licensing and lay off all city bureaucrats who enforce it. France should pass the Bill for Growth and Activity and plenty more like it. Governments everywhere should get out of the way of human creativity and enterprise.

Facebook Twitter Linkedin Email

Leave a reply

availableonamazon
Contact Dr. Baetjer

Enter your email address:

Skip to toolbar