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Only freedom can stimulate competition

Competition is not something that can be artificially created. Competition is an inherent facet of human – or living – nature, and thrives most when it is left alone. The notion that government can introduce swaths of laws, regulations, and red tape, like the new Competition Amendment Bill, and not have a deleterious effect on competition and economic growth is naïve. Government should stick to ensuring no violence or fraud is used by firms and let the rest of the chips fall where they may, in the interest of all consumers.

South Africa’s competition policy regime, as constructed around legislation like the Competition Act, is permeated by a fundamental misunderstanding of the economics of competition and of the Rule of Law. The Competition Amendment Bill, for instance, is of a racialist character; assigns excessive discretionary powers; its provisions are ambiguous and unclear; and it seeks to oust the jurisdiction of the Supreme Court of Appeal, each of which falls foul of the commitment to the Rule of Law found in section 1(c) of the Constitution.

Nothing in the Bill will make competing easier for historically disadvantaged persons. According to Christo Hattingh, competition “is the method by which consumers judge whether prices are ‘too high’”, and businesses that charge too much for their goods or services will inevitably lose customers and face closure. The Free Market Foundation’s former chairman, the late Michael O’Dowd, wrote that entrepreneurs have “to produce goods or services that other people want to buy. Where competition comes in, is that he will not be able to sell his product if others do a substantially better job of producing it than he does. He does not have to defeat the competition, but he does have to keep up with it”.

Competing, in other words, is not something the law can help one do. The law can only create an environment in which competition can thrive. What the Competition Amendment Bill does is open various doors through which cronyism and corruption can slip through as firms, some not as honourable as others, vie for government favour.

By providing that the Competition Commission must take “the promotion of a greater spread of ownership, in particular to increase the levels of ownership by historically disadvantaged persons” into account when determining whether a merger is “in the public interest”, for instance, the Bill is calling for racial arbitrariness the likes of which still haunt us from the Apartheid era. The Commission is being called upon to look, among other things, at the racial character of businesses wishing to merge in determining whether the merger should be allowed or not. There are no strict guidelines for how the Commission must make this determination, so it is a matter of discretion.

Where there is discretion, there will, inevitably, be corruption. When an official can base their decision simply on their own interpretation of the facts, nothing protects them from giving in to the temptation to favour some at the expense of others, other than their own strength of character.

A provision of this nature has nothing to do with the fundamental nature of competition regulation; that is, to ensure the market is contestable and not monopolised by particular firms.

Competition in the marketplace is not stimulated by active government interference in the affairs of firms and entrepreneurs. Government interference leads to price distortions caused by factors such as increased compliance costs and perverted incentives. Ordinarily, entrepreneurs would seek to profit by providing consumers with the goods and services they desire at a better quality or speed than their rivals, but, when government starts to interfere, they now also need to satisfy the ideological and arbitrary whims of the bureaucracy by competing with one another over who can cosy up the closest to the industrial regulator to ensure that their virtue-signalling compliance with ideological legislation receives notice.

For competition to flourish, government must start a process of dismantling anti-competitive legislation and regulations, and of dismantling State-sponsored or -owned monopolies that force private competition out of those respective industries. Competition is not created by government, but comes about in a market free of excessive interference. The role of government should simply be to ensure no firms use violence or deception to deny market entry to their potential rivals.

Author Martin van Staden is Legal Researcher at the Free Market Foundation. This article may be republished without prior consent but with acknowledgement to the author. The views expressed in the article are the author’s and are not necessarily shared by the members of the Free Market Foundation.

Help your business go green

??Going green is not only a great way to contribute to maintaining (or even saving) our environment, but it can set you apart from the competition and help you stand out. There are some simple steps you can take to save yourself some money and do your bit to decrease your negative impact on our planet.

Turn off at the switch. Your laptop doesn’t need to be plugged in 24/7, and leaving the charger in the wall with the power on will increase your electricity usage. Turn off chargers, appliances such as kettles, and other equipment like printers. Make sure all computers are turned off at home time. Check the plugs before you leave to make sure things aren’t plugged in overnight using unnecessary electricity and costing you extra money.

Book to attend in June!
Book to attend in June!

 

Go paperless. We have a whole article dedicated to this, which you can read here,but in summary: encourage emailing, use scrap paper for writing things down, store invoices and accounts online, try to avoid printing, and if you must print – do it double sided.

Use recycled materials for your packaging. If you pack products then use recycled and recyclable materials for your boxes, wrapping and so on. For printers, use remanufactured cartridges instead of originals. They are much cheaper and better for the environment too.

Consider your lighting. Switch to energy efficient bulbs, keep blinds and curtains open instead of turning on the lights, or just use a desk lamp in the evenings.

Water can also be very expensive, and water scarcity is becoming a major problem. Don’t waste this precious resource. Make sure to fix any leaky taps, and don’t allow taps to be left running. Consider installing motion sensors for your taps to reduce water consumption. Turn down the temperature of your water heater – keep it as low as you can in order to meet the needs of your business.

Climate control can be expensive. Africa can get very hot, so we see the appeal in air conditioning, but first try opening windows or using a fan. In the winter wear extra layers and keep doors and windows closed to retain the heat. Also keep the curtains or blinds open during daylight hours to let the sun warm the room. If you really need to use air-con or heating, do it sparingly. Set the thermometer to room temperature (around 24 degrees or so) rather than very hot or very cold, and don’t use the air-con overnight when nobody is there. Either turn it off manually or set it to turn on and off at pre-selected times (and temperatures!).

Tell any suppliers that you are interested in buying “green” products and reducing your carbon footprint. Buy products that have been recycled or refurbished. You can stretch this as far as your office furniture as well – buy secondhand, or furniture made from biodegradable or recycled materials.?

Source: bizcommunity

Book your seat here for the Green Business Seminar taking place at Sustainability Week on 25 June 2015


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Young SA scientists called to enter Green Talents 2015

South Africa’s most ambitious young scientists with an interest in sustainability research are being invited to take part in the international 2015 Green Talents Competition which offers the opportunity for its winners to promote their research in Germany and be granted unique access to the elite of the country’s sustainability research field.

With 2015 named the “City of the Future” Science Year, organisers of the Green Talents competition have announced that they particularly welcome submissions relating to this topic. The competition is however still open to all fields and offers equal chances to win. The deadline for submission is 2 June 2015, 12 p.m. CET.

The German Federal Ministry of Education and Research (BMBF) has held the prestigious ”Green Talents – International Forum for High Potentials in Sustainable Development” since 2009 to promote the international exchange of innovative green ideas. The award, under the patronage of Minister Professor Johanna Wanka, honours 25 young researchers each year. The winners come from numerous countries and scientific disciplines and are recognised for their outstanding achievements in making our societies more sustainable. Selected by a high-ranking jury of German experts the award-winners are granted unique access to the country’s research elite.

The 25 Green Talents 2015 will be selected by a high-ranking jury of German experts.

The prestigious 2015 award includes an invitation to visit Germany later in the year to participate in the fully funded two-week science forum. While touring Germany, the award-winners will have access to top science and research institutions that will offer unique insights into their work.

Award-winners will also be granted a chance to present themselves and their work in person during individual appointments with experts of their choice (during the two-week science forum).

A fully funded research stay of up to three months will be offered at an institution of the award-winner´s choice in 2016. Additionally, the Green Talents of 2015 will gain exclusive access to the “Green Talents Alumni Network” of 130 high-achievers in sustainable development from over 40 countries.

Sustainable development has been defined by the competition organisers as leading an environmentally friendly life in a way that conserves resources. This is essential to preserve our world for subsequent generations and particularly important in enabling our cities to overcome the challenges ahead. With its top innovation and research centres, Germany supports these efforts in particular by intensifying international cooperation among the bright young minds of tomorrow.

Those wishing to enter the competition must satisfy the requirements that they:

• Are enrolled in a Master’s programme or have completed higher academic degrees (Master/PhD) with significantly above-average grades at the time of application.
• Have an excellent command of English
• B Be a non-German citizen and reside outside of Germany. Not eligible to apply are German passport holders as well as anyone living in Germany at the time of application (even if the residence is limited in time).

Applicants need to register on at www.greentalents.de.

Source: All Africa


 

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