Dawie Roodt on Economics, Rhinos and Chickens

One of our leading economists Dawie Roodt has just published an excellent book entitled: Tax, Lies and Red Tape (Zebra Press). It provides an accessible, sometimes controversial, and entertaining look at a range of economic issues. Why weren’t there books like this when I was studying economics? ZA Confidential had a short chat with Dawie to learn more about this venture….

ZAC: A central theme of this book seems to be your mistrust of government, and firm belief in the private sector. How badly do you think the imbalance is in ZA?

DR: It’s quite bad and getting worse. In fact, in recent years politicians have been putting all sorts of pressure on private rights: nationalisation, the ‘secrecy law’, a clamp-down on the press, and so on.

ZAC: Is there any realistic hope that the tax burden on businesses or individuals could be eased?

DR: Not really. The reality is that pressure will increase on the state to provide more – inevitably meaning more taxes. But the good news is that eventually the tax burden gets so heavy that community simply revolts – France is a nice example of that happening now, and the opposition against the e-Tolls is an example in SA.

ZAC: You try in your book to explain complex issues and to make it possible for the man and woman in the street to understand. How worried are you that all too often economists don’t communicate their views effectively?

DR: I think it used to be a much bigger problem in the country. In the past, economists spoke a language nobody could understand – but today economics is much more of a braaivleis subject, thanks to guys like Mike Schussler, and hopefully myself.

ZAC: The plight of the rhino is a big concern currently. You suggest that rhino horns should be freely traded. How would that help ensure the survival of the animals?

DR: It will lead to the official price of a rhino – R250 000 to R300 000 – and the market price of over R10m getting closer to each other. The results will be better prices for farmers, and therefore a stronger incentive to protect rhinos, and a lower price for consumers – and most probably lower consumption because lower prices reduce the so-called Rolex effect, where expensive stuff is more attractive. Of course I am not advocating a free-for-all overnight, as some controls may be needed, and also education. But the reality is that nobody can fight the market indefinitely – and currently the market is trying to close the gap between the official and market prices. The pressure will remain until the gap is closed.

ZAC: DA leader Helen Zille wrote a foreword to your book. Does that mean the DA has the best economic policies?

DR: Most definitely not! I like Helen because I think she is a good leader and also an honest leader. But there are many instances where I have criticised the DA’s policies. I also think that they are moving away from their intellectual roots in their attempt to get more votes.

ZAC: This week we saw new tariffs on imported chicken. Is this an example of an over-active state, or the right response to predatory dumping in our market?

DR: It’s an excellent example of how a pressure group can establish themselves as rent seekers. The priority of the chicken producers will now shift to making sure this protection is maintained, by keeping up the pressure on the politicians. Under proper competition, their emphasis would have been on how to make their industry more competitive. Also, keep in mind, somebody dumping produce in SA means that somebody else is subsidising my consumption – what a bargain!

Tweet of the Day:

J Montana (@JMontanaPOTL): People try to live within their income so they can afford to pay taxes to a government that can’t live within its income.

ZA Confidential is e-mailed to subscribers. For subscription rates, please contact zaconfidential@gmail.com

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