In One Sentence: Brian Kantor – former Chief Investment Strategist at Investec – makes a compelling case for the use of free market capitalism to better South Africa and provide more opportunity for all through basic economic education.
Recommended Summary: Try as we might, we could not find any half-decent summaries of this book. So, we shall give a brief outline of it below:
The book opens with the idea that South Africa is floundering in its current state. The country’s eschewing of business as a means for improving people’s lives has left it trying to fix everything with governmental intervention and we can all see where that has got us.
Then the reader is taken on a journey through the Adam-Smith-like lens of how more business means more money in the system, which in turn means more opportunity and a better life for everybody. For instance, Kantor advocates for the lowering of corporate taxes on the premise that it will encourage foreign enterprises to headquarter in South Africa yielding greater overall revenue for the country and ultimately more jobs.
Kantor suggests that the only way forward for South Africa is to embrace market forces rather than run from them. He speaks about how increasing trade will lead to our country becoming more competitive, and how when business focusses on growing profits by becoming more competitive, they naturally improve their product offering and contribute to the growth of the economy without needing to be charitable organisations. This is pretty much run-of-the-mill economic theory, but it certainly will be a big teaching moment if you have not heard it before. Over several chapters, he advises the reader to “address poverty and inequality will look after itself”.
This advice includes the argument for limiting the power of the unions and a call for the deregulation of the private sector, on the basis that interventionism creates drastic inefficiencies. In an time where populism is the word of the day and every second person is a frothy lobbyist, Kantor’s book comes as a much needed educational tool.
If you are pressed for time, please at least give the concluding chapter (chapter 9) a read. In it, Kantor outlines much of his prior arguments, as well as the deep necessity for their acceptance.
Author: Brian Kantor has an absolutely fantastic blog here. We cannot recommend it enough for South African investors. Every post is chock-filled with nuggets of financial insight and interesting thoughts. Personally, we find his blog-writing a little dull, but if you look past the boring-ish prose, the underlying economics are very enriching. He writes predominantly for the layman and as such, his articles are not so coated with economese as one would expect to find from a professor.
Review: Like his blog, his prose is a little dull and the first couple chapters in particular can be a bit of a push to work through. His arguments are rock solid though, and we really enjoyed the Points of View he included in each chapter. The economics behind what he is saying are relatively simple. If you took any economic course in university, you are very likely to understand them. Thus the impact of the book comes not from the complexity of its economics but from the application of it to South Africa’s economy. Kantor has a deep understanding of how our business sector functions and to learn from him was a privilege.
Application to SA Equities: There is a lingering idea in the common mind that those who love business or investment must by extension love money and therefore cannot be trusted to love the good of the masses. This idea must be stamped out for effective, competitive business and astute, careful investing are two of the most powerful driving forces humanity has available in its fight to alleviate poverty and progress society. This is true globally, and especially true locally.
Takeaway: If you have never taken an economics course and are interested in making South Africa a more equal, prosperous, and growing society, this book is a must read. Skim the chapters if you have to – we understand it can be boring at times – but the big takeaway from this book is that currently, South Africa is struggling and the best way to grow it is with economics.