Free Market Foundation

Free Market Foundation

Abbreviation	FMF
Motto	Progress Through Freedom
Formation	1975
Legal status	Non-profit company (NPC)
Purpose	Advancing personal and economic liberty
Location	Bryanston, Johannesburg
Executive Director	Leon Louw
Website	www.freemarketfoundation.com

The Free Market Foundation (FMF) is a classical liberal think tank located in Bryanston, Johannesburg, South Africa. Founded in 1975, the FMF was established to further human rights and democracy through the principles of an open society, the rule of law, personal liberty, and economic liberalism and press freedom.^[1] According to The Mercury editor Fikile-Ntsikelelo Moya, the FMF is a "libertarian think tank" wanting "unfettered capitalism" which "eschews all forms of state intervention in the life of the individual citizen".^[2]

In 2017 the Think Tanks and Civil Societies Program of the University of Pennsylvania ranked the FMF as the 123rd best think tank in the category "Top Think Tanks Worldwide – (U.S. and non-U.S.)," the 21st best think tank in Sub-Saharan Africa, and the 109th best "independent think tank" in the world, for the year 2016.^[3]

From 2012 until May 2014, businessman Herman Mashaba, who is currently the Executive Mayor of Johannesburg, served as chairman of the Foundation's board.^[4] He stepped down from his position when he joined the Democratic Alliance as an "ordinary card-carrying member," citing the need for the Foundation to remain political impartial.^[5]

The trade union SAMWU has accused^[6] the FMF of being against South Africa's collective bargaining system, likely referring to the FMF's 2013-16 attempt to have a provision of the Labour Relations Act changed.^[7] Irwin Jim, general secretary of NUMSA, has similarly accused the FMF, writing, "The FMF’s attack on collective bargaining is based on its devotion to the neoliberal capitalist perspective and is part of a broader campaign to defend the neoliberal orientation of the ANC government".^[8]

Leon Louw is a co-founder of and is the Executive Director of the Free Market Foundation. The other directors of the FMF are economist Jasson Urbach, accountant Eustace Davie, and Temba Nolutshungu,^[9] a pioneer of black consciousness and a participant in the struggle against apartheid.^[10] The FMF is an Atlas Network partner.^[11]

History

The Free Market Foundation was an active participant in both the negotiations to end apartheid in South Africa (notably, the Dakar Conference of 1987) as well as the negotiations surrounding what the provisions of the Constitution of South Africa, 1996 would be.

FMF executive director Leon Louw and Frances Kendall, his wife, wrote the bestselling book South Africa: The Solution^[12] in 1986, which put forward a vision for direct democracy broadly based on the Swiss canton system. The book sold over 25,000 copies and was translated into Afrikaans.^[13]

The FMF opposed the inclusion of section 8(2) of the Constitution, which provides that the rights in the Bill of Rights do not only bind government, but also citizens (so-called "horizontality"). The FMF further protested the inclusion of "public interest" as a justification for the expropriation of private property, currently found in section 25(2)(a) of the Constitution. Public interest, it argued, is wide and leads to uncertainty, making it "not only open to abuse, but deprives the courts of clear principles on which to adjudicate property rights disputes". The FMF also opposed^[14] including socio-economic rights, such as the right to access to housing (section 26) and the right to access healthcare, food, water, and social security (section 27), because, firstly, it argued the South African government did not have the resources to give effect to these rights, secondly, that 'right to have access' is "jurisprudentially vague", and thirdly, socio-economic rights were "unprecedented" in South African law, meaning the courts of South Africa would need "to decide whether measures that confer 'access' to targeted benefits are sufficiently 'reasonable' and 'progressive' and what the state's 'available resources' are, which means judges may have to determine levels of taxation; budget deficits and allocations; housing, health et al policies..."^[15]

The "Free Market Award" 2000 ceremony. From left to right: Ketumile Masire, Leon Louw and Nelson Mandela.

In 2000 the FMF awarded its "Free Market Award" to Sir Ketumile Masire, the former President of Botswana (1980-1998), with FMF board chairman, Dr. Michael O'Dowd, saying "Botswana maintained all the institutions and practices which constitute a free market economy." The award ceremony was attended by the former South African president, Nelson Mandela.^[16]

The FMF came out in opposition to the South African government's decision to expand South Africa's nuclear energy capacity in 2014, with executive director, Leon Louw, saying, "The government has shown conclusively that it is unable to manage electricity. It is entirely in the wrong hands." Louw, however, expressed approval of nuclear power in principle.^[17]

Between 2013 and 2016 the Free Market Foundation attempted to have section 23 of South Africa's Labour Relations Act, 1995 changed. The section "allows the minister of labour to extend a collective agreement concluded in the bargaining council to any non-parties to the collective agreement that are within its registered scope".^[7] The FMF's argument was that this section was detrimental to small businesses "which could not afford wage agreements reached in councils they are not affiliated with".^[18] In Free Market Foundation v Minister of Labour and Others 2016 (4) SA 496 (GP), Murphy J of the Pretoria High Court found against the FMF, holding that the section need not be changed and that the Promotion of Administrative Justice Act, 2000 provided sufficient protection for small businesses wishing to review the labour minister's extension of agreements.^[19]

In 2017, the Free Market Foundation opposed the South African Department of Justice and Constitutional Development's Prevention and Combating of Hate Crimes and Hate Speech Bill, 2016, arguing that the "right to free, uncensored communication was the foundation of a truly democratic society." The FMF also argued that the Bill falls foul of the section 16 protection of freedom of expression found in the Constitution.^[20]

Activities

Khaya Lam title deed giveaway ceremony in Grabouw, Western Cape on 25 July 2017. Seated in the front, left to right: Attie van Wyk (CEO of Two-a-Day), Isaac Sileku (Deputy Mayor of the Theewaterskloof Municipality), Christelle Vosloo (Mayor), Temba Nolutshungu (FMF director), Derek Corder (Trustee of the Elgin Foundation), and Perry Feldman (Khaya Lam project manager).

Khaya Lam Land Reform Project

Since 2013, the FMF have led a land reform initiative with First National Bank (FNB) originally called the Ngwathe Land Reform Project. FNB executive Simphiwe Madikizela explained: “When you release title deeds wealth is created for the community. Once people have the title deed, they can extend property and make a living off the property by renting the rooms. They can use their home as collateral to get loans for other personal purposes.”^[21]

The project is now called the Khaya Lam Land Reform Project. Its stated mission is assist communities in the conversion of their apartheid-era leasehold title (tenancy) to freehold title (ownership).^[22] Khaya Lam is Xhosa for "My Home." The project makes use of the Upgrading of Land Tenure Rights Act (112 of 1991), or 'ULTRA', which "places an obligation on councils to transfer municipal land to tenants".^[23]

On 25 July 2017 the FMF handed out 58 title deeds in Grabouw in the Theewaterskloof Local Municipality of the Western Cape, which were sponsored by the Two-a-Day Group (Pty) Ltd and the Elgin Foundation. FMF director Temba Nolutshungu acted as master of ceremonies, and was accompanied by the Project Manager of the Khaya Lam Land Reform Project, Perry Feldman.^[23]

The FMF has expanded the title deeds initiative to large parts of the Eastern Cape and KwaZulu-Natal.^[21]

Economic Freedom of the World report

The Free Market Foundation publishes the South African edition of the Fraser Institute's annual Economic Freedom of the World report.^[24] The FMF is listed as a "full member" in this partnership with the Fraser Institute.^[25] FMF director Temba Nolutshungu said for the 2016 edition that it "is tragic that a country ranked 42nd in the world in 2000, just outside the top 25% of countries in the world, should have fallen 63 places in the rankings in 15 years to a point where it now ranks in the bottom 35%." According to Nolutshungu, research shows that "there is a significant though not immediate correlation between economic freedom, economic growth and human welfare so a steady and dramatic decline in economic freedom in the country should not be taken lightly".^[26]

Health policy

The FMF's health policy unit has opposed the South African government's attempts at introducing single-payer national health insurance, arguing that with South Africa's narrow tax base and low economic growth, such a scheme would be unaffordable.^[27] Economist and FMF director, Jasson Urbach, has argued that South Africa spends as much on healthcare as is "equal to many developed economies' health expenditure as a proportion of GDP," and said that spending more will not solve the problem of a "dysfunctional" system.^[28]

Awards

• 2009: The FMF was awarded the "Templeton Freedom Award" by the Atlas Network for its book Jobs for the Jobless.^[29]

• 2017: The FMF was awarded the "Africa Liberty Award" by the Atlas Network for its Khaya Lam Land Reform Project.^[30]

Publications

Papers

• "The Final Constitution for the Republic of South Africa: A Critique of the Interim Constitution" (FMF Occasional Paper No. 1) by Bruce Fein (September 1995)
• "New Zealand's Remarkable Reforms" (FMF Occasional Paper No. 2) by Don Brash (1996)
• "Diamonds: The Competitive Cartel" (FMF Occasional Paper No. 3) by Prof. Duncan Reekie (June 1999)
• "Liberal Reflections" (FMF Occasional Paper No. 4) by Dr. Michael O'Dowd (December 1999)^[31]
• "Smoked Out: Anti-Tobacco Activism at the World Bank" (FMF Occasional Paper No. 6) by Richard Tren and Hugh High (August 2000)
• "Cartels, spontaneous price discrimination and international pharmacy retailing" (FMF Occasional Paper No. 9) by Prof. Duncan Reekie (August 2001)
• "Undermining mineral rights: An international comparison" (FMF Occasional Paper No. 10) by Johan Biermann (December 2001)
• "Capital gains taxation and its applicability to South Africa" (FMF Occasional Paper No. 12) by Roger Baxter (October 2002)
• "The real reason for the fall of the rand" (FMF Occasional Paper No. 13) by Dr. Richard Grant (November 2002)
• "Innovation, Information & the Poverty of Nations" (FMF Occasional Paper No. 15) by Prof. Robert Cooter (October 2006)
• "Constitutionality of South Africa’s competition policy" by Prof. Robert Vivian (September 2011)
• "A Guide to Laws and Regulations Affecting Cloud Computing in South Africa" by Terence Davie (June 2013)
• "An Analysis of the Principle of Public Participation in Policy-Making, including Socio-Economic Impact Assessments, and their Application in South Africa" by Martin van Staden (March 2017)

Books & monographs

• The Fallacy of National Control by Dr. Richard Grant (1991)^[32]
• Exchange Controls Must Go by Dr. Richard Grant (1992)
• The Social Market Trap: The Destructive Illusions of Social Democracy by Prof. Christopher Lingle (1992)^[33]
• The Importance of Political Traditions by Prof. Leonard Liggio (1992)
• The Environment: Rights and Freedom by Prof. Christopher Lingle (1992)^[34]
• Affirmative Action, Apartheid and Capitalism by Jim Peron (1992)^[35]
• On industrial policy by Prof. Duncan Reekie (1992)^[36]
• Damage by Debt by Symond Fiske (August 1995)
• Health-care options for South Africa: Lessons from the UK and USA by Prof. Duncan Reekie (1995)^[37]
• The world revolution in economic policy 1945-1995 (FMF Monograph No. 11) by Dr. Michael O'Dowd (1996)
• The Urban Housing Issue (FMF Monograph No. 12) by David Dewar (1996)^[38]
• Equality for the labour market: An appreciation of WH Hutt (FMF Monograph No. 13) by Prof. Charles Baird (1996)
• Monopoly and competition policy (FMF Monograph No. 14) by Prof. Duncan Reekie (1996)^[39]
• Is privatisation a public good? A review of recent literature (FMF Monograph No. 15) by Candice Perlmann and Prof. Harry Zarenda (1997)
• Industrial policy: A critique (FMF Monograph No. 16) by Prof. Duncan Reekie (1997)
• Labour markets and economic growth: Lessons from the UK (FMF Monograph No. 17) by Prof. Patrick Minford (1998)
• Chronically large federal budget deficits: The American experience (FMF Monograph No. 18) by Prof. Roger Garrison (1998)
• Unjustifiable dismissal – The economics of an unjust employment tax: The New Zealand Employment Contracts Act (FMF Monograph No. 19) by Prof. Charles Baird (1998)
• South Africa as an “Open Society”? (FMF Monograph No. 20) by Dr. Michael O'Dowd (1998)
• Privatisation: A UK success story (FMF Monograph No. 21) by Thomas O’Malley (1998)
• The Meat Board "carve-up" (FMF Monograph No. 22) by Nils Dittmer (1998)
• Real Money by Dr. Richard Grant (1999)
• Capital structure and the business cycle (FMF Monograph No. 23) by Pierre le Roux (1999)
• Monopoly and competition policy (FMF Monograph No. 24) by Prof. Duncan Reekie (April 2000, 2nd ed.)
• Deregulation of agricultural marketing in South Africa: Lessons learned (FMF Monograph No. 25) by Prof. Nick Vink and Prof. Johann Kirsten (May 2000)
• Smoke gets in your eyes: The economic welfare effects of the World Bank-World Health Organisation global crusade against tobacco (FMF Monograph No. 26) by Prof. Deepak Lal (May 2000)
• Money, central banking and monetary policy in the global financial arena (FMF Monograph No. 27) by Dr. Jerry Jordan (2001)^[40]
• Capital Gains Tax: The pros and cons (FMF Monograph No. 28) by Olimpia Staszczuk (June 2001)
• Gold, the euro, the dollar and the rand (FMF Monograph No. 29) by Dr. Richard Grant (June 2001)
• Investment, employment and South African labour laws: An international comparison (FMF Monograph No. 30) by Prof. W.S. Siebert (August 2001)
• Growth Theories and their Application to the Beloved Country (FMF Monograph No. 31) by Henry Kenney (2001)
• Ideal matter: Globalisation and the intellectual property debate (FMF Monograph No. 32) by Julian Morris, Rosalind Mowatt, and Prof. Duncan Reekie (November 2001)
• The Calculus of Consent and Madisonian democracy (FMF Monograph No. 33) by Henry Kenney (May 2002)
• Misguided virtue: False notions of corporate social responsibility (FMF Monograph No. 34) by Prof. David Henderson (September 2002)
• Prejudice is free, but discrimination has costs: The holocaust and its parallels (FMF Monograph No. 35) by Dr. Steven Farron (October 2002)
• Jobs for the Jobless: Job seekers exemption certificates for the unemployed by Eustace Davie (December 2003)
• The real digital divide: Convergence and South Africa’s telecommunications and broadcasting policy (FMF Monograph No. 36) by Neil Emerick (August 2003)
• The deconstruction of privatisation: A wake up call for South Africa (FMF Monograph No. 37) by Prof. Zane Spindler (March 2004)
• Globalisation and economic growth: Evidence from emerging market economies and South Africa (FMF Monograph No. 38) by Prof. Elsabé Loots (May 2004)
• Military expenditure in Sub-Saharan Africa: Why guns cost more than butter (FMF Monograph No. 39) by Prof. Geoff Harris (November 2004)
• Is central banking the best monetary regime for South Africa? (FMF Monograph No. 40) by Maureen Bader and Prof. Zane Spindler (July 2005)
• Unchain the child: Abolish compulsory schooling laws by Eustace Davie (September 2005)
• Paying for Intervention! How statutory intervention harms South African health care by Jasson Urbach (September 2009)
• Nationalisation by Temba Nolutshungu (ed.), Leon Louw, Dr. Richard Grant, Eustace Davie, Jasson Urbach, and Vivian Atud (January 2011, 1st ed. and June 2011, 2nd ed.)
• Jobs Jobs Jobs by Temba Nolutshungu (ed.), Richard Pike, Loane Sharp, Leon Louw, Eustace Davie, Lawrence Mavundla, Michael Bagraim, Ann Bernstein, Martin Brassey SC, Prof. Darma Mahadea, Dr. Richard Simson, Vivian Atud, Graham Giles, and Daan Groeneveldt (November 2011)
• The Economic Impact of Cloud Computing in South Africa by Mike Schüssler and Jasson Urbach (June 2013)
• The Regulatory Environment Affecting Cloud Computing in South Africa by Gary Moore (June 2013)
• The Real Digital Divide: South Africa's Information and Communication Technologies Policy by Martin van Staden and Neil Emerick (March 2017)

References