This post is part of the series COVID-19
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Restrictions on individual liberty always and everywhere affect poorer people more than those who are well off. For example, when healthcare is nationalised, wealthier citizens and politicians can travel to other countries for their healthcare needs – poorer people cannot. Because of many Apartheid-era restrictions and rules which linger to this day, many poorer South Africans cannot travel with as much ease as others. The legacy of Apartheid socialism is felt across many sectors. South Africa has not pursued economic and individual freedom with the necessary fervour since 1994; now, those who deserve freedom the most must try to make do in intensely restricted circumstances.
Street traders and people who try to run shops in informal settlements are just some who will be most devastatingly affected by the current nationwide lockdown. Countless South Africans live hand to mouth, because of ridiculous regulations that persist 25 years into democracy making it very difficult for them to subsist.
Many South Africans have come out in support of the lockdown. A report from the Mabopane taxi rank says that many of the informal traders selling goods and food there, understand why the lockdown is happening; but they are fearful that they will not survive through these three weeks.
Now is precisely the right time to appreciate what is the ‘seen’ and the ‘unseen.’ As French economist Frédéric Bastiat explained in the first half of the nineteenth century, the ‘seen’ are the obvious consequences of public policies.
With the lockdown and the instruction that all South Africans must stay in their homes, how can someone who lives in a shack, often sharing with several others, and without running water, be expected to stay confined in that small space for three weeks, and to follow social distancing recommendations?
From a psychological perspective, we vastly underestimate the vital importance of trade. And not just trade between countries. Trade at the grassroots level of going to the shop on the corner of the street, or trade-in the sense of going to the local pub and meeting with your friends after a week of work. There is a profound feeling of individual agency and mobility in trade. The easier it is to trade, the more people feel empowered (in a real, concrete sense of the word) to try and engage with those around them and figure out how to improve their lives.
Countless South Africans rely on trains and taxis for their everyday transport. On Saturday, 28 March, the SA National Taxi Council (Santaco) asked for more clarity and collaboration with the government, regarding the rules and regulations of how taxis are supposed to operate under the lockdown.
Now, taxi drivers can operate between 5 am and 9 am, and again from 4 pm to 8 pm. However, there is much uncertainty about how much leeway there is and the areas of permitted operation have not been made clear. Many taxi drivers rent their vehicles from owners and are unlikely to be able to continue with payments.
Middle- and upper-income people are usually better placed to weather these sorts of storms. What will happen to poorer people in the townships, on the outskirts, and in more rural areas? Subject to certain rules, for example, the mandatory wearing of rubber gloves, and using sanitary wipes (handed out by the government) when trading, the informal sector could still operate as ‘normal.’ Broadly speaking, our focus should always be on more freedom than not and on measures and policies that will not bring the economy to its knees.
Now is precisely the right time to appreciate what is the ‘seen’ and the ‘unseen.’ As French economist Frédéric Bastiat explained in the first half of the nineteenth century, the ‘seen’ are the obvious consequences of public policies. The ‘unseen’ are the consequences no one considers, and which are very often unintended. An unintended consequence of a nationwide lockdown, for example, is people gathering close to each other in queues in shops because they are banned from visiting restaurants or from buying food from traders on the side of the street.
The informal sector in South Africa is massive; much bigger than any of us estimate. That it has managed to operate throughout the decades, despite the worst of Apartheid, and the most stringent of regulations, is a testament to the ability of millions of South Africans to innovate and to improve their lives and those of their families. A blanket approach of enforced lockdown does not allow for people’s real experiences and what they may need to do to survive.
The informal sector (including street traders and spaza shops) accounts for employment and income for about 2.5 million entrepreneurs. The dangers of COVID-19 are massive, yes, but our initial reaction to any crisis should always be: how can we impact people’s freedom as little as possible, and not cause more problems through sweeping interventions? What do people really need the state to do? Or, perhaps more appropriately, not to do?
Chris Hattingh is Project Manager and a Researcher at the Free Market Foundation. He has an MPhil in Business Ethics from Stellenbosch University. The views expressed in this article are those of the author and not necessarily those of the Free Market Foundation.
Photo Credit: Eagle News
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South Africa: Economic Disaster caused by the Lockdown