Fair Capitalism Essential To Country’s Survival

by Letters Editor · January 14, 2020

Frans van Neerijnen, Roodepoort – I read with interest part two of Bishop Sipuka’s interview headlined ”What is needed to help fix SA’’ (November 27).

I want to stress that true and proper capitalism, especially that practised by Christians (Catholics) and the many other good people, is essential to South Africa’s survival.

May I define this type of capitalism. It starts off by people investing in a business which is expected to give them a reasonable return. Just like you and I do when we open a savings bank account; we expect interest in return.

A business creates employment, and these employees are expected to do their best and work productively without stoppages in thanks for their jobs and their salaries or wages, which were agreed to by both parties. This is fair practice.

Furthermore, the profit that the business owner makes is equivalent to the interest that we earn on our savings in the bank. The net profit is generally not much more than this. This profit is then shared with government in the form of tax. These taxes are then used by government to help mainly the poor.

The more profit businesses make, the more tax they pay. That is fantastic support for our economy, GDP and country.

If the business does not make a profit, then it does not pay any tax, and so the people dependent on government taxes for their education and health will suffer.

If the business does not make a profit, then the owner will close it down. Just like we all would withdraw our savings from the bank which does not pay interest.

We should be very grateful for all investors who open businesses that employ us. These investors, many of whom hopefully have confidence in our economy, are the main ones that can create employment.

We also hope that many investors are from overseas and hence also help our foreign exchange situation, as well as increase our GDP. The bigger the investment, the more people are employed by businesses and able to make a living.

So we should remember and favour companies—especially the large ones—because of all the people they employ, and all the profits they make, since almost half of that profit goes into our tax coffers to support our economy and thus the poor.