By Jacques Jonker
South Africa has been on lockdown for more than a week. Integral to the lockdown regulations are the forced closures of businesses that are not deemed 'essential' by government. These closures are felt by everyone in the economy, but the effects are most pronounced amongst the poor, who mostly find themselves in the informal sector. The distinction that is being made between "essential" and "non-essential" goods and services is of grave concern, because it is derived from flawed and ignorant postulates, and it indirectly discriminates against poor black people.
A cornerstone of economic thought is that value is subjective. The implication of this is that what is essential is whatever individual human beings deem necessary to fulfil their needs. There is, objectively speaking, no good or service that is subjectively non-essential to anyone. If it was produced, it means that somewhere in the world there is most likely someone who deems it essential. But this point still does not get down to the root of the problem, which is that government is ignoring the human beings behind the goods and services.
When looking at the goods and services included in the list of those deemed essential, it is clear that only the consumer of the end product has been considered, albeit also in a short-sighted manner. One would be justified in picturing the Minister of Cooperative Governance and Traditional Affairs sitting with a picture of Maslow’s hierarchy of needs before her, neatly sketched in a primary school textbook that failed to reach the learner it was supposed to, and restricting consumer goods to only those that serve the foundational level of the hierarchy. Government is largely ignoring those behind the production of products deemed non-essential. What is produced in an economy is not only essential to those who consume it, but also to those who produce it. It provides all those in the supply chain with a means to survive. To paraphrase French economist Jean-Baptise Say, the more people can produce, the more they can purchase.
From this alternative paradigm, where the notion of subjective value and the invisible individuals behind the goods and services are taken into account, it becomes clear that distinguishing between goods and services on the basis of whether they are "essential" is an exercise that is a) axiomatically flawed, and b) is distinguishing between humans based on the nature of their labour and regarding some livelihoods as expendable in the name of the greater good.
This is not simply semantics. It has tangible consequences; a lot of them deadly. What should those do who even struggled to survive before the lockdown, when their only source of income has been stripped from them? The billions donated by the Ruperts, Oppenheimers and Motsepes is not nearly enough. Government, itself a bankrupt institution, already subsidises the lives of millions of South Africans and cannot afford to subsidise more. Also, let's not pretend that the poor have enough savings stashed away somewhere to keep them and their families alive for three weeks, or possibly even longer. In 2019, South African households, overall, had a negative savings position of R7.6 billion, which is understandable given how government policy has for decades disincentivised saving.
The irony of it all is that government itself requires money to fight off the virus. That money comes from taxes, a prerequisite of which is existing wealth created by people engaged in productive economic activity. By forcefully (sometimes extra-judicially) preventing people from taking care of themselves, government is also taking away its own means of curbing the spread of COVID-19. We must also not pretend that the Reserve Bank's attempts to artificially increase the money supply through reduced interest rates and the monetisation of government debt is a good alternative to keeping the economy, and by extension the state itself, afloat.
People try to justify government taking away people’s means to care for themselves and their families with patently absurd slogans such as "we can rebuild economies; we cannot revive lost lives". Collapsed economies themselves kill people. It would, in fact, be entirely within the realm of reason to argue that not only are they capable of proving themselves deadlier than COVID-19, but that when they combine with the disease, the detrimental effects would be seriously exacerbated.
The public healthcare system is also in shambles and serves as an instruction manual of how not to manage one. Alas, we are now stuck with a situation where, precisely because of government's destructive economic policies, those who rely on this system, are being punished even further by having their means of staying alive stripped from them.
It does not make sense to implement a nationwide lockdown to save lives when that same lockdown prevents people from generating a livelihood for themselves. We must fight against the virus but we must do it in a manner that will not worsen an already dire situation and, quite possibly, lead to even more lives being lost than would have been the case had people been allowed to care for themselves.
Jacques Jonker is an Economic and Legal Analyst at the Free Market Foundation. The views expressed in this article are those of the author and not necessarily those of the Free Market Foundation.