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I don’t believe in ‘if’ anymore

Monday, 09 March 2015   (0 Comments)
Posted by: Author: Jerry Schuitema
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Author: Jerry Schuitema (Moneyweb)

How hypotheses can cripple national discourse on critical issues.

It seems to be happening more frequently lately: using hypothetical arguments to silence criticism. One of the better known was President Jacob Zuma’s suggestion that things would have been better if Jan van Riebeeck had not landed in the Cape. Then there are those peculiar defences of executive bonuses despite poor performances based on the hypothesis that things would have been worse if they were not there. And hypotheses become particularly questionable when used as a veiled threat like "without BEE we would have had a bloodbath”. 

Seldom are hypotheses as logical as they appear and even less so do the assumptions that underpin them reflect scientific Newtonian certainty.

So it was with a sense of let down that I saw the technique being used in a vital post budget debate a few days ago, (see Moneyweb report here) featuring a highly respected thought leader and jurist, Judge Dennis Davis, in a spat with another thought leader, economist Mike Schϋssler. The discussion was focused on South Africa’s tax burden, with Schϋssler arguing that we pay a lot of tax and get very little back for it; and Davis countering that this was "profound rubbish” if one considered South Africa as a whole and not only the middle and upper income groups. He then cited a World Bank assessment that South Africa had "the best tax transfer system in the world”.

This assessment has its own context. Apart from experiencing the global problem of massive corporate and other tax avoidance, we have highly efficient tax collection, but being the most redistributive in the world is by no means an accolade, rather a massive indictment. The level of redistribution is never a measure of government success, rather a failure to create the conditions in which people are able to care for themselves. All governments are "redistributive” to some extent, but that extent should be restricted to a minimum.

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