Why are there so few entrepreneurs in South Africa?

They are discouraged by the State, and by corporate business. There are reasons for this, which we will examine later if I get that far.

LABOR:

Possibly the biggest disadvantage of the entrepreneur is the labor laws. They place the employee at great advantage, to the detriment of the employer. The employee is given a "right" to his job, can do almost nothing wrong in the eyes of the law and is given a huge legal backing by several organizations. The sad part is that all these systems were originally designed to protect employees, whereas today they cause huge unemployment. It is very much not worthwhile to employ anybody today if there is any alternative available.

MANUFACTURING:

Manufacturers are penalized much more heavily than criminals. They are taxed, criminals are not. They have to pay VAT, criminals do not. They have to pay for everything they get, criminals get free board and lodging. Manufacturers have to comply with huge tomes of legal requirements, paperwork and complications, criminals do as they please. One would think that manufacturing should be encouraged by the state. The state is always declaring that poverty should be alleviated, yet they never seem to get the picture that wealth has to be created.

Manufacturing is the creation of wealth

TAXATION:

Entrepreneurs must be the most severely taxed group in the world, not just South Africa. If you look at taxation from the point of view of the economy of a country, entrepreneurs should not be taxed at all, as their profits would create more and more jobs in an escalating cycle.

On the other hand, laborer’s and non-productive people might as well be taxed to within an inch of their solvency, since they are never going to create any new jobs.

PARASITES:

Unfortunately a lot of people are unproductive and counterproductive. Worse still, this is entirely legal. There are people for example who speculate on the stock exchange instead of working. The contribute nothing to society, they slowly and systematically erode the life savings invested by little old ladies in the stock exchange, and they are applauded for it. I am in favor of closing the stock exchange today.

ATTITUDES:

One would think that entrepreneurs would be respected and applauded for creating jobs. Unfortunately this is not the case in South Africa. Entrepreneurs are regarded as profiteers and profit is regarded as very close to crime.

REGULATION:

Markets, production, and prices are interdependent self-regulating economic entities which maintain their own dynamic equilibrium. At least they would if the state did not interfere. Even the most well intentioned intervention is counterproductive. I met a guy who started erecting a factory which couldn’t work. I pointed out its pitfalls to him and he said it didn't matter, the DTI are financing it, he didn't put in a penny. So what happens when it fails? I asked. Don't worry, he said, they financed my last failure, and they still give you a third chance. Why does the government take my taxes from a successful business and give them to an unsuccessful business?

IMPORTS:

South Africans' biggest shame is their belief that imported goods are better.

SERVICE:

South Africans' second biggest shame is their acceptance of poor service. South Africans do not complain. South Africans accept whatever the government decides. South Africans are blind to

corruption. Foreign visitors correctly point out that South Africans get exactly the poor service that they allow.

MONOPOLIES:

We supposedly have a government board to stop monopolies. Why then did they allow Iscor to buy and shut down all its competitors? Why does Iscor export steel so cheaply and sell it to us so expensively that we can import steel components made of Iscor steel cheaper than we can buy the same Iscor steel here?

Why does our government actually legislate the monopoly on land line telephones?

Clearly our economy would be better off without a government.

Now for the other problem, the large corporations:

It has been my consistent experience in business that service is inversely proportional to the size of a company. In selecting a supplier, you will never go far wrong by choosing the smallest company. The smaller the business the less communication is involved, and with luck you can have a single person attend to your needs. Another criterion for selecting a supplier is that it must have an owner. Partners diminish the responsibility, and in public companies there is no sense of responsibility. Considering the enormous inefficiency of

the large corporations, how do they survive? This is a complex issue. One of their advantages is economy of scale. An ominous advantage is their influence over the government. They have proved to be capable of wangling all sorts of legal concessions, import protection etc. In an

extreme case, the diamond industry even persuaded the government to set up 2 special police branch to protect their monopoly and imprison people whom they solicited into buying diamonds "illegally". Their most powerful economic tool is credit. They feel it is the duty of small businesses to finance them. I was nearly bankrupted by a large corporation which withheld payment of a large order for four months on the basis of a flimsy excuse. T stopped doing business with large corporations. It was tough for a while, my turnover dropped, but now my business is prospering. My bank manager told me that 90% of the bankruptcies she saw were caused by cash flow problems. We would see a huge turn around in our economy if we scrapped VAT and instead taxed debt at 14% per month. I am a sole trader. I take full responsibility for everything I do. I have no means of escaping my debts. By registering another company every six months I could avoid ever paying for anything and make a fortune. One of the most disturbing things I have seen, is the number of people registering companies at the DTI. Am I the only person who sees a company as 2 legal means of stealing? I sincerely believe that there should be no such thing as a company. Every economic entity should be privately owned to function efficiently.