RESEARCH - Private Property, Public Interest

In February 2018, South Africa’s Parliament adopted a resolution providing that the Constitution should be amended to allow government to expropriate property without being required to pay compensation. At the time of writing, it was also proposed that the amendment provide for outright nationalisation of all fixed property (“land”) in the country. 

The Constitution Eighteenth Amendment Bill, whether in its current or in a different form, is likely to be adopted, and will change section 25 of the Constitution, to, at least, allow for no-compensation confiscation of property. The Expropriation Bill, an ordinary piece of legislation, is also likely to be adopted, and will spell out the precise procedure and requirements for when property may be so expropriated without compensation. This bill provides scant protection for property rights. 

This paper discusses the dangers of government’s proposed confiscation regime. Secondly, it explains why secure, entrenched private property rights serve, rather than undermine or hamstring, the public interest. Thirdly, the alternatives to confiscation and nationalisation will be discussed. These include the fact that government is financially capable of providing market-related compensation for expropriations; that restitution of land and property is achievable (indeed imperative) without destroying property rights; that urban land reform success is within grasp but underappreciated; and that much can be done about rural reform without threatening the economy or food security. Fourthly, a viable, pro-property rights alternative to government’s proposed legislation is outlined. 

To achieve a better life for all, including the poorest of the poor, freedoms and security of property must be respected and expanded. The Economic Freedom of the World report illustrates this by showing a strong correlation between GDP per capita and economic freedom, of which property rights is a precondition. This paper proposes that confiscation and nationalisation be abandoned in favour of viable, property rights alternatives.