Free Market Foundation
The Free Market Foundation refers to itself as a classical liberal think tank located in Bryanston, Johannesburg, South Africa. Founded in 1975, the FMF was established to further human rights and democracy through the principles of an open society, the rule of law, personal liberty, and economic liberalism and press freedom. According to The Mercury editor Fikile-Ntsikelelo Moya, the FMF is a "libertarian think tank" wanting "unfettered capitalism" which "eschews all forms of state intervention in the life of the individual citizen". In 1987, Leon Louw, the FMF's co-founder and then-Executive Director, described the work of the foundation as follows:
In 2017 the Think Tanks and Civil Societies Program of the University of Pennsylvania ranked the FMF as the 123rd best think tank in the category "Top Think Tanks Worldwide –," the 21st best think tank in Sub-Saharan Africa, and the 109th best "independent think tank" in the world, for the year 2016.
From 2012 until May 2014, businessman Herman Mashaba, who was the Executive Mayor of Johannesburg, served as chairman of the foundation's board. He stepped down from his position when he joined the Democratic Alliance as an "ordinary card-carrying member," citing the need for the foundation to remain politically impartial.
After a bitter power struggle over several years, Leon Louw, the face of the foundation for nearly five decades, was ousted from the organisation and resigned in July 2022. Louw said the FMF wanted to be more partisan while he wanted to retain its neutral stance. The executive committee said he refused "to work within the lawful structures of the Foundation and work with its executives."
As of November 2023, David Ansara is the chief executive officer and Rex van Schalkwyk is the chairman of the board.
The FMF is an Atlas Network partner.
History
Apartheid era
The "South African Free Market Foundation" was founded in August 1975 "to promote free enterprise" in South Africa. The initiative was spearheaded by the Association of Chambers of Commerce of South Africa, which sought a way "to promote the free market economy in South Africa". According to the Sunday Express, the FMF was founded by "a group of five young professional men", because "Government progressing inexorably toward a greater degree of control over traditional free market forces." Leon Louw led the steering committee responsible for the establishment of the foundation. The steering committee consisted of Louw, FE Emary, M Lillard, Fred Macaskill, André Spies and Marc Swanepoel". When asked about its view of South Africa's apartheid policies, the first chairman of the FMF, Lu Sher, said that the FMF "would like to see restrictions on the movement and use of labour, capital, and goods, phased out wherever possible". Sher continued, saying the FMF was generally "limiting to the economic field, but there we believe that the fewer restrictions the better, and that all races should be able to compete freely in all sectors".The foundation published a monthly classical liberal magazine, The Individualist, from its founding in 1975 until October 1976, when the FMF was officially registered as a non-profit organisation in South Africa. The magazine was from then on published independently. The Individualist is currently defunct. The FMF would later publish its own journal, Free Market, which was released six times a year. Senator Owen Horwood and Gerhard de Kock were among its contributors. Free Market is also currently defunct.
In May 1976, the FMF moved offices to 401 City Centre, 36 Joubert Street, Johannesburg.
In November 1976, after the FMF's registration as an NPO, it was reformed into the "Free Market Foundation ". Dirk Hertzog, Chairman of the Oude Meester Group and President of the South African Society of Marketers, was chosen as chairman of FMF's interim executive committee. By this time, the FMF "had the backing" of Assocom, SASOM, the South African Federated Chamber of Industries, the National African Federation Chamber of Commerce, and the Afrikaanse Handelsinstituut. The Clarion magazine also " its full support to the whole concept" of the FMF.
At its inaugural congress in 1977, Professor Stephan du Toit Viljoen, Chairman of the Bantu Investment Corporation and the Bank of Lisbon, was elected as the FMF's first president. In his inaugural address, Du Toit Viljoen claimed that the cause for the unrest throughout South Africa was because black South Africans could not identify with the political and economic system in which they lived. According to Du Toit Viljoen, it was necessary to involve all of South Africa's races in the development of the free enterprise system, to avoid this unrest. To this end, Du Toit Viljoen called for the progressive removal of discriminatory laws, improving education facilities, and improving the quality of life by providing home ownership; and that "the gradually increasing involvement of all races in the administration of the country would be an essential corresponding development in the political field". At the time, André Spies was the secretary of the FMF.
In March and April 1978, the FMF and the School of Business Leadership at the University of South Africa hosted Friedrich A. Hayek, the Nobel Prize-winning economist, on a visit to South Africa. Hayek addressed a public meeting at the Carlton Hotel on Wednesday, 22 March, on social justice and economics. The Johannesburg Chamber of Commerce held a lunch for Hayek on Thursday, 6 April, at the hotel. At a banquet on Friday, 7 April, at the same hotel, Senator Horwood was the main speaker.
The FMF criticized the South African government's 1980 budget, especially the "increased welfare spending including subsidies and housing". Howard Preece, an editor of the Rand Daily Mail, responded to this criticism, sarcastically remarking that "there will be all those black pensioners whooping it up on their R33 a month while the oppressed whites slave to provide cheap bread for the blacks generally". The editor concluded that "ommunists never had better friends than these ultra-marketeers and their Standard Nine economics".
Eustace Davie became a director of the FMF in 1981.
Professor Jan A. Lombard, Head of the Department of Economics at the University of Pretoria and Deputy Governor of the SA Reserve Bank, was President of the FMF between 1981 and at least 1991.
Louw and Frances Kendall, his wife, wrote the bestselling book South Africa: The Solution in 1986, which put forward a vision for direct democracy broadly based on the Swiss canton system. The book sold over 25,000 copies and was translated into Afrikaans.
By 1987, much of the FMF's funding came "from large corporations, with lesser contributions coming from individuals and smaller companies". The FMF also earned an income from consulting work for companies seeking to overcome government interventions that inhibit their enterprises, and advising government institutions and homeland governments, especially on deregulation and privatization. Its With Justice For All training program, aimed at teaching "economic principles and also covers politics", which ended in 1988, accounted for 60% of the FMF's total income. The Rand Mines Group sent 100,000 of its staff to participate in With Justice For All. Don King, the group's personnel director, said the program would "tell workers of the benefits of the free market system as the viable and more welcome alternative to the marxist-socialist system".
At the time, the FMF argued that privatization was the only way to bring about racial equality between black and white South Africans. Louw said that, in addition to producing enough wealth to raise the welfare of blacks, privatizing South Africa's state-owned enterprises and industries would depoliticize various economic sectors, like buses and trains, which had been racialized whilst in state hands. Resistance from civil servants and the possibility of generating private monopolies were two issues Louw identified, but this could be overcome by guaranteeing job security and ensuring privatized enterprises are not given to one firm.
In 1988, the FMF awarded Lawrence Mavundla with its "Free Market Award" for his contribution to the cause of economic freedom in South Africa. Mavundla had co-founded the Co-Operative for Hawkers and Informal Business in 1986 to fight for the right to enterprise of black South Africans during the time of the apartheid regime's discriminatory legislation.
Post-apartheid
The FMF was an active participant in both the negotiations to end apartheid in South Africa as well as the negotiations surrounding what the provisions of the Constitution of South Africa, 1996 would be.The FMF opposed the inclusion of section 8 of the Constitution, which provides that the rights in the Bill of Rights do not only bind government, but also citizens. The FMF further protested the inclusion of "public interest" as a justification for the expropriation of private property, currently found in section 25 of the Constitution. Public interest, it argued, is wide and leads to uncertainty, making it "not only open to abuse, but deprives the courts of clear principles on which to adjudicate property rights disputes". The FMF also opposed including socio-economic rights, such as the right to access to housing and the right to access healthcare, food, water, and social security, because, firstly, it argued the South African government did not have the resources to give effect to these rights, secondly, that 'right to have access' is "jurisprudentially vague", and thirdly, socio-economic rights were "unprecedented" in South African law, meaning the courts of South Africa would need "to decide whether measures that confer 'access' to targeted benefits are sufficiently 'reasonable' and 'progressive' and what the state's 'available resources' are, which means judges may have to determine levels of taxation; budget deficits and allocations; housing, health et al policies..."
Professor Themba Sono, who was the President of the South African Students' Organisation between 1971 and 1972 and a co-founder of the Black People's Convention, was President of the FMF from 1997 to 2000.
In 2000, the FMF awarded its "Free Market Award" to Sir Ketumile Masire, the former President of Botswana, with FMF chairman, Michael O'Dowd, saying "Botswana maintained all the institutions and practices which constitute a free market economy." The award ceremony was attended by the former South African president, Nelson Mandela.
The FMF came out in opposition to the South African government's decision to expand South Africa's nuclear energy capacity in 2014, with executive director, Leon Louw, saying, "The government has shown conclusively that it is unable to manage electricity. It is entirely in the wrong hands." Louw, however, expressed approval of nuclear power in principle.
Between 2013 and 2016 the FMF attempted to have section 23 of South Africa's Labour Relations Act, 1995 changed. The section "allows the minister of labour to extend a collective agreement concluded in the bargaining council to any non-parties to the collective agreement that are within its registered scope". The FMF's argument was that this section was detrimental to small businesses "which could not afford wage agreements reached in councils they are not affiliated with". In Free Market Foundation v Minister of Labour and Others 2016 SA 496, Murphy J of the Pretoria High Court found against the FMF, holding that the section need not be changed and that the Promotion of Administrative Justice Act, 2000 provided sufficient protection for small businesses wishing to review the labour minister's extension of agreements.
In 2017, the FMF opposed the South African Department of Justice and Constitutional Development's Prevention and Combating of Hate Crimes and Hate Speech Bill, 2016, arguing that the "right to free, uncensored communication was the foundation of a truly democratic society." The FMF also argued that the Bill falls foul of the section 16 protection of freedom of expression found in the Constitution. When the Bill was updated in April 2018, the FMF welcomed the changes but continued to argue that the Bill was unnecessary.
File:Frans Rautenbach and Daniel Mitchell at the Free Market Foundation.jpg|thumb|250x250px|Frans Rautenbach and Daniel J. Mitchell speaking at the FMF on the Rule of Law on 14 November 2018.
The FMF has opposed the South African government's plan to amend section 25 of the Constitution to enable the expropriation of private property without compensation. Nolutshungu warned that expropriation without compensation would betray the victory of constitutional democracy over such legislation as the Natives Land Act, 1913, and said that even though the current government might not wish to use the power to expropriate without compensation maliciously, the nature of constitutional change means any future government will have the same power. Professor Robert Vivian, who sits on the FMF's Rule of Law Board of Advisors, said in September 2018 that, contrary to the conventional belief that only two-thirds of the members of the National Assembly would need to support the amendment for it to pass into law, 75% of the assembly's votes would instead be necessary. This is because according to Vivian, amending the requirement to pay compensation for expropriated property does not simply affect section 25 of the Constitution, but also affects section 1's commitment to the advancement of human rights and freedoms. Provisions in the Bill of Rights require two-thirds of the assembly, and provisions in section 1 require 75%.
The FMF has also voiced its concern over the public participation process surrounding the adoption of the expropriation without compensation policy. It pointed out that the government had allocated more time for written submissions on a tobacco regulation bill than it did for the constitutional amendment. Later, the FMF condemned Parliament for not inviting the foundation to participate in the oral hearings before the National Assembly's constitutional review committee.