Coase Theorem and property rights in South Africa

The Coase theorem is a curious anomaly that most economists seem to ignore or dismiss. From what I've read on economics, the field is mainly divided between the Monetarists and the Keynesian economists.

Monetarists view currency as another product subjected to the laws of supply and demand. They conclude that government intervention in the economy distorts the market price for currency, thereby exasperating economic cycles.


Milton Friedman, the man associated with monetarism. He blinds you with science. And his bald patch.

On the other hand, Keynesian economists view currency as a tool that governments may use to influence supply and demand. Government intervention in the economy is thus justified to address social issues by influencing levels of inflation or unemployment statistics, among other hardships. Yet there are more obscure economic theories out there. One such a theory is Coase's Theorem.


John Maynard Keynes, the biggest economist of the last century. In more ways than one.

Definition of Coase's Theorem

If there are no transaction costs, the efficient outcome will occur regardless of the initial property rights.

Coase's theorem seems to me especially applicable to South Africa's land redistribution policies, which has seen some very inefficient outcomes like a drastic drop in agricultural production and having South Africa become a net importer of food. The inefficient outcomes are not based on lack of skill, but rather on lack of certainty with regards to property rights.

It appears that government wants to stimulate growth and nurture black ownership of farms on the one hand, while simultaneously not offering reasonable prices for farms. The result of such a situation is lack of investment and commitment on the side of the farmers - both current owners and new owners. This is perfectly understandable, especially with the threats of nationalisation and land appropriation (they'd call it theft if they had the balls) coming from the ANCYL.

In turn, the net result of such a situation is increased transaction costs and lower agricultural production. A transaction cost is a cost associated with making an exchange. It's the cost of doing business, which could prevent economic efficiency.

What is economic efficiency?

Economic efficiency refers to a situation whereby the most goods and services are provided with the least amount of resources. Naturally, transaction costs and externalities would have to be kept to a minimum to facilitate efficiency.

The redistribution of wealth is essential, we are told, to address the imbalances of Apartheid South Africa. But what if it were absolutely justifiable, but did not lead to the desired outcome? Should we not stop and question policies before we enforce them? Perhaps the road to hell is indeed paved with good intentions, and perhaps one such golden intention is the redistribution of wealth?

Should we not address transaction costs?

Coase's theorem explicitly states that initial property rights are inconsequential if one desires economic efficiency. The best course of action to me seems to be to work towards decreasing transaction costs instead of plotting nationalisation and land grabs. We all know what happened to Zimbabwe. As a developing nation, surely we'd like to compete with India, Brazil and China instead of losing our position as the economic powerhouse of Africa?

Media Appeals Tribunal Update

I've received some insightful comments on my Media Tribunal posts. Here's a quick summary of them:


More than one thousand bloody agents have joined the No Media Tribunal campaign.

A summary of the Media Appeals Tribunal debate

• The Media Tribunal and the Protection of Information bill are two separate concerns. The Protection of Information Bill is already on the table, while the disgraced Media Tribunal is fast becoming a political liability so it's unlikely to even reach parliament.


• Neither of these bills appear to be founded on constitutional values and many experts agree that they will not make it past the Constitutional Court in their current form.


• Nevertheless, the ANC claims that there is overwhelming support for the Media Tribunal and thinks that going ahead with this bill is still a great idea. This despite the fact that it's been shelved before due to overwhelming opposition to the bill and the current backlash from the public against the notion.


• The media is aware of its own shortcomings, but disagrees with the idea of a statutory body that oversees the press. In any event, the notion of such a statutory body is in direct conflict with the Bill of Rights.


• Some believe that the media should be censored to attenuate certain ideologies in favour of spreading certain different ideologies. I do not think this is relevant to the debate at all. It certainly isn't the function of any democratic government to dictate ideology with statutory bodies.
  
  Many of the catchphrases border on sloganeering and have no rational basis. Some of these include ill-defined terms such as addressing inequalities, neoliberalism, market fundamentalism, public interest and national security.
  
  Some of the claims are demonstrably false, namely that market profitability drives all media (the SABC isn't profitable and it's the biggest media mouthpiece in the country), a cartel owns all South African media (besides the SABC, there are two major syndicates and many independent papers, not counting community newspapers), or that there is overwhelming public support for the Media Tribunal and this justifies a little compromise on the side of our constitution (the backlash against both the Protection of Information Bill and the Media Appeals Tribunal proposal has been incredible).


• If the ANC were really concerned about its image, it would focus on radio since radio has the highest penetration of any medium in South Africa. The ANC already effectively controls radio as radio belongs to the SABC - one of our many beleaguered parastatals. It does not make sense to try and censor the local press, unless perhaps the government has something to hide from the foreign press? Like, say, a white genocide or two?


• The argument that the Media Tribunal is not a personal vendetta against the press is incredibly weak - laughable, even. Especially in light of the public sector strike that is out of control, the doings of the Don Jackie Selebi, the current state of our national defence force... I could go on but you have a free press for the time being and you don't have to look hard.

Meanwhile I have gone from exponential growth to linear growth in the support of my No Media Tribunal campaign. If you'd like to pledge your support, feel free to do so and please keep in mind that pledging your support does not mean that you agree with my views expressed here (or anywhere else) in any way. In fact, the point of freedom of speech is that we may allow differences of opinion and opposing views, because ultimately this results in a wise crowd.

Suggested reading on South African Media Freedom

1. Former intelligence minister Ronnie Kasrils drafted the original Protection of Information Bill and claims not to recognise the current one in Defend democracy - don't gag it!


2. Journalists highlight their concerns with the onslaught on South African press freedom.


3. A recent Wits debate on the Media Tribunal where Action Jackson of the ANC got his behind handed to him.


4. The Committee to Protect Journalists raise their concerns about South African media freedom and suggests that president Jacob Zuma is in a position to stop this madness before South Africa loses its position as a leader of the free press in Africa.

This could save your life

Just a thought, use it, don't use it.



The age of consent chart from Wikipedia. Absolutely crucial information for any traveller. Don't forget your towel either.

Latest on the disgraced Media Tribunal

Since my last post, No Media Tribunal, over 500 followers have joined the fray to oppose the Media Tribunal. I didn't realise there were so many irate internet nerds in South Africa.


More than 500 South Africans are against the Media Tribunal. I know, I counted them all.

Prominent people oppose the Media Tribunal

Some of the sane people opposed to the Media Tribunal include Pick n Pay's CEO and the US Ambassador.

People at grassroots level oppose the Media Tribunal

This is ironic because according to Jacob Zuma, the Media Tribunal is designed to protect ordinary people who he thinks are too stupid to know about the ombudsman or who cannot afford court proceedings against the boogy man media.

Well, if us ordinary, grassroots level South Africans are such high flyers that we need a Media Tribunal that censors the press to protect our anonymous reputations then why do we feel this way about the proposed media tribunal?

• YES to Media FREEDOM. NO to Hitler's sentiments over the journos!


• Don't touch me on my media.


• I think someone once said something about history repeating itself. This farce is a bloody tragedy.


• Most certainly - it's the run up to the Fourth Reich - The African Chapter.


• This is exactly what the ANC fought against in the APARTHEID years, now THEY are simply re-branding it as DARKER APARTHEID!

These gems were taken from the comments on the No Media Tribunal twibbon page.

The ombudsman is jacked up

Smart, educated, experienced black people are the last kind of people the ANC wants. It's not so easy to sell them the revolutionary rhetoric of 'we're the liberation party, if you don't vote for us apartheid is coming back'. More like the libation party because they all seem drunk to me.

This is why the current press ombudsman, Joe Thloloe is having such a sweaty time in the hot seat. This is why Mzilikazi wa Afrika is having such a tough time to stay out of jail, and why convicted fraudsters like Schabir Shaik gets parole. Jackie Selebi will probably catch something like a near-lethal ingrown toenail soon. We need this Media Tribunal like a fish needs a bicycle.

It's up to you to guard our freedom!

Thank you so much to all those who have joined the debate and have voiced concern over the Media Tribunal. I know many of you felt patriotic when you stuck those retarded condom flags on your car mirrors and I laughed at you for turning your cars into twat mobiles. Now it's my turn to feel patriotic, not because of some liberation movement or some politician, but thanks to ordinary South Africans who realise that treating free speech you dislike with censorship is akin to treating dandruff by decapitation, like Saint Frank Zappa used to say.

Feel free to leave me a comment!

No Media Tribunal

The ANC seems hell-bent on this censorship trip. Even though they've already decided that the media tribunal will be implemented, apparently more debate is needed surrounding the issue. I say CENSOR that. If it's unconstitutional, it's non-debatable.

If you are a lamer on Twitter, please join my campaign

I started a haphazard No Media Tribunal campaign to try and get lots of irate Internet nerds to oppose the proposed Media Tribunal. If you are one of those nerds, first, get some sun. Please. You need Vitamin D.



This is Dr Joseph Goebbels. No, he does not work for the ANC although you may be forgiven for thinking so. To the Illiterati, this picture is meant to be ironic. As in, a difference between what is meant and what is portrayed. See, just like the ANC, Dr Goebbels was not a fan of free speech. I wonder why?

Secondly, please join my No Media Tribunal twibbon campaign. Now get some sun before sunlight becomes regulated by the Ultra Violet Radiation Tribunal.

Fear and loathing on the campaign trail

From the No Media Tribunal page:

The South African government is trying to establish a Media Tribunal to censor the press. I believe this goes against the spirit of what it means to be South African. It also tramples on the sacrifices made by many during Apartheid so that we may enjoy freedom of speech. Freedom of speech is absolute in my mind, because what you do not know can hurt you much more than what you do know.

Blog what thou wilt shall be the whole of the law

If you have a blog, please consider mentioning your thoughts on the proposed Media Tribunal. Feel free to link back to this post, or to the twibbon campaign. Also feel free to add me some comments at the bottom of this post.

External links relating to press freedom

• Electronic Frontier Foundation, more concerned with digital rights.


• The Ministry of Public Enlightenment and Propaganda under NAZI Germany. Bad idea then, bad idea now in South Africa.


• Reporters Without Borders, an advisory organisation on press freedom.


• Rights that are inalienable from a philosophical perspective.

Free Mzilikazi wa Afrika

The free Lindsay Lohan post was a bit of a joke. To you, perhaps, but not to me. With Lindsay Lohan behind bars, who is going to flash their tits in public?

However, Mzilikazi wa Afrika, a journalist for the Sunday Times, has been jailed because some chop in Mpumalanga did not like his face. I happen not to like his face either but the man has a job to do, namely report on newsworthy events. If our one party state does not like what the media prints about them, perhaps they shouldn't conduct themselves so newsworthy?

Like George Carlin once said, the Germans may have lost the war but fascism won. Seems like the ANC forgot what life was like under Apartheid with the security police watching the media like Hawks.

I hope the Specials haven't retired yet because South Africans who value their personal freedoms still need them to make more remixes. I took the liberty of making a new cover for them:

Free Lindsay Lohan

Lindsay Lohan is in rehab

Again. Before entering a rehabilitation centre, Lindsay Lohan was in prison. This is an outrage. When fine, upstanding citizens such as Nelson Mandela spent unjust time in prison, there was an international outcry to have him freed. There is a famous song (apparently, we never really heard it in South Africa back in the day) called Free Nelson Mandela. That's free as in release Nelson Mandela from prison, not free as in you get a free Madiba with your McDonalds happy meal. Sorry.



I took the liberty of creating my own campaign to Free Lindsay Lohan. There can be no justice in the world until Lindsay Lohan walks free!