Efficient Group chief economy Dawie Roodt said political ideologies and policies that protect private property rights are the best to ensure economic growth.
Roodt shared this view as part of an Efficient Group discussion about the world of politics and its economic impact.
He said numerous political ideologies exist, including capitalism, socialism, libertarianism, fascism, and anarchy.
One of the main differences is the individual’s rights in society.
- On the one extreme, there is a strong focus on the individual’s rights, with ideologies like libertarianism, anarchy, and free marketeers.
- On the other extreme, there is a strong focus on the rights of groups, with ideologies like communism and socialism.
The ideology followed in a country is important because it informs the policies implemented, which in turn affects economic growth.
The economy relies on protecting personal private property rights – a foundation of free trade and economic growth.
There are two main systems which have different views on protecting property rights.
- Capitalism – associated with strong protection of personal private property rights.
- Socialism – associated with weak protection of an individual’s property rights.
“I do not doubt that the ideology and policies that protect private property rights and individual rights are mostly responsible for the amazing economic growth the world has experienced,” he said.
Roodt’s views on political ideologies alight with his three pillars of a strong economy – private property rights, free trade, and sound money.
The combination of these three principles creates a great environment for economic growth and a “free lunch”.
“When you allow two individuals to trade freely with one another, they create a free lunch because they are both better off after the transaction than before it,” he said.
“The more trade we can generate, allow, and facilitate in an economy, the more free launches we create.”
As a result, the economy becomes more successful, and the country becomes wealthier.
However, it is not possible to have free trade between individuals if they do not own things. It is why it is so important to protect private property rights.
“If you implement these three principles, it will guarantee success in an economy,” Roodt said.
Roodt’s views echo the words of the late Prime Minister of the United Kingdom, Margaret Thatcher, in her speech at the International Free Enterprise Dinner in 1999.
“Either you believe in capitalism, or you believe in socialism. Capitalism, as we know, creates wealth. Socialism, as we also know, creates poverty,” he said.