Leon Louw

Leon Marais Louw has been considered the face of the free-market movement in South Africa since the 1970s. In a December 1987 biographical article by journalist Stan Kennedy in the Johannesburg paper The Star, Louw was described as “the driving force for a free-market society” in South Africa. Louw came from an Afrikaner family, initially flirted with fascism, then at university became a Marxist and acted as a courier for the then-banned African National Congress (Lawson 2013). He was weaned away from Marxism when he discovered that there was “no sign of any great struggle between the working classes and capitalists,” instead seeing cooperation between consumers and sellers (Kennedy 1987).

Louw wrote in 1981 in the Free Market Foundation (FMF, of which he has been Executive Director since 1975) journal Free Market that adopting a free-market paradigm would solve South Africa’s most important social, political, and especially racial problems. His major points were three:

  • There needed to be rapid wealth creation, without which any political solution to South Africa’s problems would be stillborn. Even if all the wealth white people owned at the time were redistributed, this ultimately would do little to help the impoverished black majority. Only a free market would be conducive to such rapid wealth creation.
  • South Africa’s woes would not come to an end unless racial intergroup domination is eliminated. By embracing the free market, life would be less politicized, with the important decisions that affect people’s daily lives being made by them individually or as communities.
  • Such a depoliticization, furthermore, is not possible except under a constitution that provides for a limited government, especially insofar as government’s economic powers are concerned. Such a constitution would defuse the intense racial and ethnic tensions.

Louw concluded, “the promotion of a free market, or stated conversely, the reduction of statism, whether it be left or right, is the most urgent and important priority in South Africa” (Louw 1981, 2).

Louw was the principal author of the Ciskei’s Small Business Deregulation Act (Blundell 1985), and chairman of the Commission of Inquiry into Ciskei Economic Policy (Financial Mail 1980). The Ciskei was an Apartheid homeland considered by the Apartheid regime to be “independent” from South Africa but rightly seen by the international community as a puppet meant to legitimize the Apartheid system. Louw and the FMF pressed to take advantage of the South African government’s self-declared non-involvement in domestic Ciskeian affairs. The Small Business Deregulation Act, among other things, exempted small businesses from a host of interventionist legislation still imposed upon the homeland by the central South African government, and it established the office of the Small Business Commissioner, who could exempt small businesses from other burdensome laws or regulations unless Parliament overruled it. The Act also legalized child labor when there is consent from parents or guardians. And the Act certainly did not create a free-for-all of economic anarchy; for one, it explicitly provided that all the rules of employment and public health that exist under common law shall persist (Hetherington 1985, 192).

In 1986, Louw and his wife Frances Kendall co-wrote the best seller South Africa: The Solution (Louw and Kendall 1986). Widely acknowledged as a potential path forward for South Africa, the book recommended a direct democracy system patterned on the Swiss canton system: “Democracy is a complicated array of checks and balances, intended to protect individuals and minorities and limit the power of central governments” (Sun 1987). The book was widely promoted by the FMF and Groundswell at forums like the 1987 Dakar Conference and the first national congress of the Institute for a Democratic Alternative for South Africa (Pretoria News 1987). Groundswell was formed specifically to promote the Swiss-style direct democracy and federal canton system ideas offered in the book. The book opened the way for FMF’s participation in the constitutional negotiations that brought South Africa out of Apartheid. Louw and Temba A. Nolutshungu “played a role in negotiations to democracy, and successfully included property rights in the Constitution” (Bloor 2019).

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