How South Africa chooses to be poor

What creates wealth ?

Taking advantage of opportunities.

Making the most of each. Extracting maximum economic value from every opportunity.

What do we do instead ?

We choose to be 50-60% less efficient than we can be.

How do we do this ?

Imagine an economic value chain 7 levels deep. One business buys a product from another business, who in turn depends on service from another business who in turns ... you get the idea!

Now imagine loosing 10% efficiency at every step....

I've calculated the effect will be that you only realise 47% of the value, with 53% of the value being lost.

This means if we used every opportunity to its full, each person would have been twice as wealthy, earn twice as much money... and half as many people would have been desperately poor.

Instead this is how we throw away our opportunities
- Imagine loosing 10% in productivity due to massive electricy problems
- Imagine loosing 10% in time due to being stuck in traffic jams and lack of public transport
- Imagine a business spending 10% of its inccome on security measures due to our rampant crime
- Imagine the productivity loss due to the Telkom monopoly
- Imagine the loss in productivity due to the fact that many companies are required to hire employees that best fit their BEE (black economic empowerment) objectives rather than the most skilled ones
- Image the loss in productivity due to all the highly skilled people buggering off to Australia, the UK etc.
- Imagine the loss in productivity due to inflexible labour laws (companies cannot hire and fire employees easily, employees regularly strike and demand wage increases far in excess of inflation etc.)

All of these inefficiencies add up.

This is the South African reality. A place that has through active negligence by its leaders ensured that it only operates at 47% efficiency.

If only SA didn't wait until recently before acknowledging the extent of crime...
If only Eskom could have ***somehow*** foreseen the obvious supply problems 10 years ago...
If only South Africa could have realised the price it pays for BEE in terms of inefficiencies and in chasing competent white people out of the country...

All of these things have been blatantly obvious for years, but our leaders refused to act.
The damage has been done and will take 10 years or more to recover from - if we get superstar competent president appointed next.

However the majority (mostly black people) are all voting for Jacob Zuma, the person that has been accused of Fraud, Rape, Corruption and that enjoys singing a song (Translated as "Bring me my machine gun")

Articles in the news:

Zuma makes his final legal stand
ANCYL wants zuma for President
'Zuma will be President'


and then: Totally Bizare ?!??

"President Zuma will sort out White People" was published in the Sunday Standard in Gaborone.

The Wealth Redistribution Myth

What most white people fear will happen to South Africa ...

Rich vs Poor

What we all fear...

So we are being told that the massive gap between the HAVE's and HAVE-NOT's must be closed.

Here are some useful background facts and widely used buzz words:

• The rising black middle class (supposedly responsible for record increases in property prices in the early 2000's)
• The "Black Diamonds" phenononym to describe the newly minted rich black yuppies.
• Despite the biggest economic boom in South Africa's history, the number of desperately poor people (those living on less than a dollar a day) have doubled since democracy(1996) from 2 Million to 4 Million, and the biggest preportional increase was from the white race group (Ref: The race relations research institute)

Land Reforms, Wealth Redistribution blah blah... transformation ... blah

This is the mind virus that we are constantly being fed.

What everyone is missing, is a fundamental economic truth:

Wealth can ONLY be Created or Destroyed. Never redistributed.

Whenever artificial and forceful means are attempted to redistribute, or re-allocate wealth, the wealth gets dissapated in the process. Look at the history of Argentia, Zimbabwe, Russia, Poland.... (Communism is the perfect story book example of what happens when one tries to distribute wealth evenly)

The solution to make the Poor happy is not to kill the rich fat cats.

The solution is actually to make the rich fat cats EVEN RICHER, along with everyone else.

Wealth is basically a pyramid

..............RICH
.....MIDDLE CLASS
.DIRT POOR PEOPLE

A small number of very rich people at the top, a middle class, a lot of people scraping buy, and in South Africa, tons of poor people at the bottom.

The trick is to pull the Entire pyramid up. Not to try and reshape the pyramid and in the process destroy the wealth.

Some of the main reasons why wealth cannot be redistributed

• Someone who did not create something, cannot care for it, look after it or manage it.
• Wealth is not money. Rather: Wealth is the ability to create money from specialised knowledge, business systems and saved up capital.