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Is SA really a basket case?

What are they not telling us about growth?

By Richard Cluver

Officially, South Africa’s gross domestic product has been in steady decline since it peaked at 5.6 percent annually in 2006 and the consequence has been to drive away foreign investors, limit service delivery to ordinary citizens and, most importantly, to convince ordinary folk everywhere that South Africa Pty Ltd is going to hell in a handcart.

But is the assessment fair, and how accurate is our GDP Calculation? Most of us take for granted that the monthly GDP stats the government supplies us are accurate. But how accurate is the calculation when the GDP number is a measure calculated from data collected by the Receiver of Revenue and yet we all well know that the Receiver is struggling to collect tax in large swathes of our economy: think for instance of the duties due on the sale of illegal cigarettes which is believed to account for nearly two thirds of all cigarettes sold in South Africa.

Moreover, if you accept the word of the ‘White Zulu” GG Alcock” whose recent book KasiNomic Revolution lifted the lid on what is really happening in the un-taxed township economy, those numbers are massive.

“The scale of those economies is untapped and really unrealised. And equally, these figures around unemployment are absolute rubbish because no one’s considering the businesses, and other forms of income that are actually being earned in those kinds of spaces,” says Alcock.

“In 2019 I found something that was closer to 12% and I’d stick to the same number now. Just to dwell on the unemployment figures, I’ve said its around 12% real unemployment. If you want to take the figures of say 40% that are touted around, you’ve got to place the word ‘formal’ unemployment in front of that word because that reflects people who earn a pay check, they have a pay slip and earn a salary or a wage. If you look outside of that, if you look at this massive informal economy, the spaza sector’s 150-billion rand sector, fast food is a 90-billion rand a year sector. The taxi industry is a 50-billion rand a year sector. Traditional herbal medicines’ an 18-billion rand sector. Hair salons, a 10-billion rand sector.

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“None of them have payslips. Then over and above that, there’s a lot of passive income that we don’t measure. So, for instance, all the spazas are primarily foreigners or immigrant traders. They pay 25-billion rand a year in rental to South African owners of the houses that their spaza is on. There’s another 20-billion rand a year in the backroom rental sector, which is a booming sector.”

Respected economists calculate that, conservatively, the “Township Economy” is worth at least R900-billion annually, and it could well equal the known SA economy. If that is correct then just the townships and lost tobacco revenue could arguable at least double our nominal GDP calculation and practically none of it is actually measured by the Tax Man. Indeed, were it to be taxed on the same basis as the formal economy it is arguable that South Africa’s fiscal problem might disappear overnight.

Why is there a problem regarding the official figure? Few folk really understand how GDP is calculated. So let us start by noting that gross domestic product measures the total value of goods produced and services provided in a country. It is calculated by adding the net value added by each economic “actor” in the economy. For that, of course, you need tax returns to be able to measure the numbers.

So, for example, if you are a car manufacturer and your vehicles sell for R100 000 each while the parts used to manufacture it are bought in at a cost of R80 000 per car, then your contribution to the GDP is R20 000. Simple enough, but any economics textbook you care to choose will likely admit that GDP is flawed when it comes to measuring production in an economy.

One of the first to highlight this was the economist who invented the GDP measure, American Simon Kuznets who in 1934 warned the US Congress of the fundamental inaccuracy of his calculations and the inadequacy of GDP in assessing an economy’s “true welfare.”

“One problem,” he said “is that the black market, cash-in-hand payments and tax evasion are all excluded from GDP calculations. We’d like to include them, but we simply don’t have the data. A second issue is the number of non-monetised items produced in an economy.”

Sheffield University economics lecturer Dr Alexandere Tziamalis explains it this way: “A joke among economists goes that if you marry your car mechanic, GDP will fall. A service you used to pay for is now free of charge and therefore not included in GDP. The same applies to non-chargeable activities like childminding by grandparents, or cooking food at home.

“A further limitation concerns public goods. Economists are still perplexed by the economic contribution of the army or a primary school for example. In many cases we just add up the cost of a public good in the GDP calculation yet this is clearly wrong. A public good can cost little and offer great value, or vice versa.

“There’s also the difficulty of measuring the economic contribution of banking and financial services. To capture the value produced by banks, statisticians use the concept of “spread” – the difference between the interest rate on a risk-free asset and the lending rate. Then they multiply this by the number and value of loans in an economy. Yet in the financial crisis of 2008, the spreads rose due to uncertainty, making the economy appear to be producing more from financial services than it was before. And it really wasn’t.”

The most commonly-used formula for calculating GDP is the money spent by various groups in society. The formula is as follows: GDP = C + G + I + NX where C = consumption or all private consumer spending within a country’s economy, including, durable goods, non-durable goods, and services. G = total government expenditures, including salaries of government employees, road construction/repair, public schools, and military expenditure. I = sum of a country’s investments spent on capital equipment, inventories, and housing and NX = net exports or a country’s total exports less total imports.

Nominal GDP is the number most of us are familiar with. It is a number representing the total value of all goods and services produced at current market prices over a time period, including the effects of inflation or deflation. South Africa’s nominal number, as most of you are aware is currently 1.3 percent. But how many are aware that South Africa is not alone in enjoying abysmally low GDP growth? Picking at random two other economies, World Bank figures were used to calculate the graph on the right which compares the GDP performance of South Africa in blue, Australia in yellow and Namibia in green.

Look how closely all three graph traces have moved together over the past half century! I could overlay dozens more countries and the same downward trajectory would be apparent because economies all over the world have been slowing for years under the burden of rising government debt.

Meanwhile, if the means of calculating GDP is probably flawed by the limitations of the Tax Man’s ability to tax everyone equally, something which our Commissioner for Inland Revenue Edward Kieswetter freely admits to, is there another measure which more accurately represents South Africa’s economic performance?

Subscribers to my Prospects Newsletter service will, by now be familiar the following graph which I published in my Friday, November 17 column. The topmost trace represents the JSE All Share Index over the entire period of ANC governance during which time the average share rose in value annually by ten percent. Look how closely the daily index trace hugs a trend line rising at compound 10 percent annually!

To add perspective I have laid below it the Rand/US Dollar exchange rate with a trend line indicating that, on average, over the same time the Rand has lost 4.7 percent annually. Subtract one from the other and you can clearly understand that notwithstanding the nearly total collapse of state-run infrastructure during this time, the private sector nevertheless managed to achieve ‘real growth’ annually of 5.3 percent.

On top of that the average JSE company delivered cash dividends to their shareholders at current share valuations of 6.6 percent thus representing a ‘real’ total return of 11.9 percent which most economists would probably agree suggests a vibrantly healthy private sector.

If you consider that a huge swathe of private companies are having to invest heavily into backup electricity generation to replace their Eskom supplies – an enormous expenditure that their overseas competitors are not saddled with. Additionally, they are having to move both their raw materials and finished goods by road when their overseas competitors enjoy far cheaper rail and barge systems. And to cap it all the ANC’s refusal to allow the private sector to handle its own port-handling has created freight backlogs that are months long. Despite all of these problems, our private sector is still delivering world-beating returns.

Just as a comparison, the average US company listed on the New York stock exchange has delivered share price growth of 5.5 percent over the same period. Deduct average inflation of 2.5 percent and add an average dividend yield of 3.4 percent and one might thus conclude that on a ‘real’ comparative basis South Africa’s private sector growth is doing twice as well as its US counterpart.

Now the direct link between economic growth and unemployment has long been understood, but the precise translation figure depends entirely upon which economic study one references. One of the most recent local studies by Daniel Meyer of the North West University published in the International Journal of Economics (Vol 9 N01 2017 ISSN 1309-8055) determined a O.96% conversion rate which, crudely argued suggests that if South Africa’s private sector were left alone without State interference to do the job of ending unemployment, our global record joblessness rate of 32.6 percent could be eliminated within the next four to five years.

Given that the ANC’s approach to providing “a better life for all” has year by year since 2008 handed us the global wooden spoon: the very worst performance in the world, perhaps it’s time to let someone else have a try!

I leave you with Statista’s graph of our unemployment record over the past 20 years, drawn from World Bank figures it illustrates how constantly South Africa’s failure has impacted the lives of ordinary folk through most of the period of ANC governance.

But there is one final, damming point. In the 1920s, with the scorched earth of the Anglo Boer War, the Spanish Influenza and the then worst drought in history preceding the Great Depression in 1929, South Africa’s unemployment rate peaked at 22 percent.

Globally, monetary theorists speculate in fear about something they call “The Great Reset” which will likely result when the current Bretton Woods monetary system finally collapses (note I have said when). It will, they fear, make the Great Depression look like a walk in the park.

For South Africa the numbers don’t lie. With twice as many South Africans out of work than during the Great Depression, we are arguably already there!

It is thus timely to consider a new report from one of the world’s most respected economic think tanks: Harvard University’s Growth Lab led by Professor Ricardo Hausmann whose latest report has just been handed to the SA Treasury. To fix South Africa its prime recommendation is to end the ANC’s policy of ‘Cadre Deployment,’ renting out Eskom’s grid and power plants to the private sector and to go big on green energy in which, he says, the country is in a prime position to exploit.

As a side note, Hausmann says that ditching the government’s preferential procurement rules which are throttling service delivery, SA could save a fifth of all the money it spends and on its own deliver three percent of GDP growth.

As we prepare for an election early in the New Year which will likely propel them into opposition benches, it will be good to hear how ANC politicians answer that telling list of the things they have done to destroy our economy and give us the world’s highest level of unemployment!

Before you vote, make sure you ask the person who craves your tick on the ballot paper!

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Sticking to the fiscal guns

By Brian Kantor

The shortfall in government revenues of R56.8-billion reported in the Budget Review of 2023 came as no surprise to observers of the monthly tax returns. It represented a moderate miss in volatile circumstances – equivalent to 3.1% of the revenues expected in the February 2023 Budget of R1787.5 billion: A very large number and equivalent to 25% of GDP.

This real tax burden (Taxes/GDP) is not expected to change over the next few years. Underestimated company tax, lower by R35.8-b and net revenues from VAT down by R25.6-b, accounted for much of the revenue shortfall. Weaker metal prices and massive investments in alternatives to Eskom power were largely responsible for both declines. Personal Income Tax grew as expected by 7% in line with some growth in real wages and salaries for those employed in the formal sector.  The shortfall will be fully covered by raising additional loans of about R54b.

The higher ratio of national government expenditure to GDP, currently 29.1%, is estimated to decline to about 28% of GDP over the next three years: Still leaving scope for a positive Primary Balance of 0.3% of GDP this year and 1% next year.

Raising revenues to exceed expenditures, net of borrowing expenses, is the first and necessary step to reducing the burden of National Debt to GDP-now about 74%, though predicted to decline to about 71% of GDP in three years. National government expenditure, is estimated to increase by an average 4.6% p.a. over the next three years, including servicing our debts, currently over 20% of all revenue that will cost the taxpayers about R400-billion this year. That would represent a decline after inflation.

The SA government is still practicing fiscal conservatism despite persistently slow growth that weighs so heavily on revenue and inhibits expenditure. And raises persistent doubts about fiscal sustainability. That is the willingness of the government to avoid money creation that is a heavy reliance on its central and private banks to fund its expenditure over the long run. Which raises the risks of more inflation and is already well reflected in high borrowing costs.  Risks incidentally that have not trended higher in the run up to the Budget Review.

Encouragingly the debt and currency markets reacted positively to the statement itself. The rand strengthened to improve the outlook for inflation and long bond yields declined by about 15 b.p.to help reduce debt service costs.

Source; Bloomberg

South Africa; Risk Spreads- Differences in borrowing costs. RSA-USA

 Source; Bloomberg, Investec Wealth and Investment

In reading the Budget Review and listening to the Minister one is struck by how deeply dissatisfied the government is with its own performance. The statement is a catalogue of government failure.

To quote the statement

The case for reconfiguring government, as it is put, is vigorously argued by the government itself. It will however need its own genuine champions informed by events rather than a stale ideology. It will have quite simply to put the private sector and private sector incentives in control of much of the activities so badly performed by the SOE’s and government departments generally, that could be outsourced. It can be called private public partnerships rather than privatization, but the essential reforms required will be to incentivize operating managers on the bottom line and return on capital- as the private sector does – to thrive and survive.  The upside is incalculable.

And as far as funding a reformed public sector, the place to start would be to dispose of key underperforming assets on the best possible terms. Selling assets or leasing them over the long term would be equivalent methods for raising capital and reducing government debt. The leases can be sold to funders (foreign and local) who would be very keen to provide finance on favourable terms, given credible operators. The Transnet iron-ore line from Sishen to Saldanha would be an obvious candidate for sale or lease. There will be many other such projects made much more valuable under different operating control. For the mines to lease and operate their essential gateways to the market would add many billions to their values and taxable incomes.

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The Survival of the Republic

By John Mauldin

Thanksgiving brings to mind not only turkeys, family, and friends, but also should help us recall the remarkable ideas and philosophies that helped shape, and indeed were, the foundation for the United States of America as a Republic.

In that spirit let’s reflect on what we want our world to look like after that crisis. What should be our guiding principles?

Most of us are aware that the founding fathers read Locke, Hume, Smith, et al. But not many of us are aware that there was another series of papers that were just as influential as the works of more famous philosophers. They were clearly a part of the background for the Federalist Papers and, later, our Constitution.

My friend Joe Lonsdale, most well-known for his prodigious and successful venture capital efforts (Palantir, Anduril, Oculus, software, healthcare, etc.) and founder of 8VC, which manages $6 billion in early-stage startups, also writes and hosts a podcast on a wide range of topics. He also founded The Cicero Institute, a pro-liberty think tank and activist group focused on changing things at the state level. They have been very successful.

This week, he writes about Cato’s letters, a series of 144 writings published between 1720 and 1723 in London on government and corruption and what is necessary for republics to succeed. They were very influential in pre–Revolutionary War America. He has kindly given me permission to use his work for this week’s letter.

Before we dive in, let me strongly encourage you to subscribe to his newsletter. You can navigate to all his work from that site. He interviews the Who’s Who of the tech world, politics, and more, as well as writes.

Now, let’s think about what we want our country to look like, to act like, after we solve the coming crisis.

Cato’s Letters: The Rules for Republics

By Joe Lonsdale

In Revolutionary America, colonists read Cato’s Letters for its rousing lessons on liberty, power, tyranny, and republican government.

If you were to attend an average American history course today, you’d be lucky to pick up on any principles behind the American Revolution beyond unjust taxation and perhaps opposition to monarchy. If you were unlucky, you might hear fantastical reasons like white supremacy and slavery, as posited in the radical revisionist “1619 Project.”

One thing you would struggle to find is any mention of the most popular political work of the late-colonial period that educated colonists knew and could often quote: Cato’s Letters.

2023 marks the 300th anniversary of the publication of the collection of 138 pseudonymous letters in English newspapers. They were penned in response to public outrage over the South Sea Bubble and were influential in British politics and in the colonies.

Authors John Trenchard and Thomas Gordon chose the Roman statesman and Stoic Cato the Younger (95–46 BC) as a pseudonym because of his strong opposition to corruption in the Roman Republic. In his final days during the Civil War, he committed suicide rather than surrender to Julius Caesar, whose tyrannical claims Cato opposed.

The South Sea bubble was an early instance of government-corporate cronyism. In 1711, the South Sea Company was formed as a speculative venture to exchange England’s nine-million-pound national debt for shares in the company. The company’s purported value was based on a monopoly granted by Parliament to trade in the Spanish colonies of the New World and a license to provide African slaves to those colonies.

Emblematical Print on the South Sea Scheme, William Hogarth

The company never turned a profit, nor could it even make interest payments, but company leaders, speculators, and even British royals drove the price of the stock in 1720 from £125 to £950 in just six months through intense speculation. When the bubble burst, share prices fell to £185, many lost huge sums, and the debt had to be exchanged once again into the national bank and other public financial institutions.

Trenchard and Gordon recognized the South Sea Bubble not merely as a financial crisis, but a crisis of political corruption and lack of public spirit: government leaders had colluded with financial manipulators on a huge racket and betrayed the public trust. If that sounds familiar, you’ll understand why I want my fellow citizens to revisit the letters with me. The acts of government-corporate collusion and mischief take different forms today, but the underlying problems are largely the same. Below, I share some key lessons for our current age.

Note: unless otherwise noted, “Cato” refers to Trenchard and Gordon, the authors of the 18th-century letters, not the ancient Cato Younger

On Accountability and the Law

“It is nothing strange that men, who think themselves unaccountable, should act unaccountably, and that all men would be unaccountable if they could.”

Like his predecessors, Thomas Hobbes and John Locke, Cato begins his analysis of the state with the social contract. Before governments existed to make and enforce laws, there were two fundamental laws grounded in nature that governed human societies: the law of equity (to not harm one another) and the law of self-preservation (to defend yourself).

Given the difficulty of maintaining this order—don’t hurt others, defend yourself—people come together to form governments to rule and benefit themselves. In agreeing to a social contract, people give up some of their individual authority and empower some others to enforce the rules. When rulers assume greater authority, they must also assume greater accountability.

Cato points out that while the social contract had been intended to ease life in the state of nature, it also could empower corrupt rulers: “human society had often no enemies so great as their own magistrates; who wherever they were trusted with too much power, always abused it…” For Cato, this was not surprising; it was simply part of human nature.

Cato suggests that it is “as frivolous as it is wicked” to imagine that the fear of God would restrain a wicked ruler. So, power must be checked, and rulers must be accountable to citizens, be they kings, presidents, or consuls. In the United States, we have no king, but who are the leaders who evade accountability while wielding power? Congress? The President?

Neither. Our most unaccountable leaders are those in the regulatory and administrative state, the vast apparatus of bureaus and agencies created democratically by Congress but which have turned into powerful political institutions in their own right. These are the institutions that make citizens small and corrupt interests large. Cato could not have foreseen the modern regulatory state, but he still provides guidance on how to wrangle it.

In Letter 8, he presents the case of monopolies under Queen Elizabeth I. When she learned that some of her advisors had tricked her into granting them monopolies on certain commodities for their own profit, she publicly apologized and acknowledged her wrong judgment—and then delivered the guilty within her court up to justice. The queen’s solution to corruption was also Cato’s: severity in the defence of liberty.

Cato explains that the peace and security of a society are maintained through the twin forces of “the terror of laws, and the ties of mutual interest.” We know these tools proverbially as the carrot and the stick, and Cato stresses that the impulse toward self-preservation, or self-love, drives people to pursue the carrot and avoid the stick. But strong leaders must be willing to escalate and use constitutional power—the stick.

“To spare the meek and to vanquish the proud; to pay well, and hang well, to protect the innocent, and punish the oppressors, are the hinges and ligaments of government, the chief ends [of] why men enter into societies.”

The law for Cato had the two-fold purpose of encouraging virtue and discouraging vice. Good government and happy people are found where “the laws are honestly intended, and equally executed.” Healthy societies cannot have double standards for public officials and corporations. In such a society, honest citizens and dishonest officials would be treated in the same manner.

Cato was especially concerned about the abuses of power perpetrated by public officials because of their power of influence over society. And he was adamant that the crimes of private citizens were not comparable to those of public officials because “the first terminate in the death or sufferings of single persons; the other ruin millions, subvert the policy and economy of nations, and create general want, and its consequences, discontents, insurrections, and civil wars, at home; and often make them a prey to watchful enemies abroad.”

On Virtuous Self-Interest

“We do not expect philosophical virtue from [men]; but only that they follow virtue as their interest, and find it penal and dangerous to depart from it.”

Cato takes a realist view of human nature. And since both virtue and vice are propelled by the same root force in human nature, Cato doesn’t think in terms of improving human character. He considers it a fool’s errand to try to change human nature, to make it more virtuous or less passionate. In fact, it’s just this nature within us that can be harnessed to improve our society.

As noted above, he encourages this first through law. But the second force is wealth and its honest pursuit through capitalism. Self-interest and capitalism allow every man to provide for himself by providing for others and providing for others as he provides for himself.

Cato explains that people “are never satisfied with their present condition, which is never perfectly happy; and perfect happiness being their chief aim, and always out of their reach, they are restlessly grasping at what they never can attain.” This is our nature and not something to be fixed by Marxist schemes against capitalism or acquisitiveness. Neither wealth nor poverty are measures of moral superiority. It is possible to despise wealth and shun power because of disinterestedness “created by laziness, pride, or fear; and then it is no virtue.” 

It is no virtue indeed to despise wealth in itself. It’s paradoxical but true that “the best actions which men perform often arise from fear, vanity, shame, and the like causes.” So rather than attempting to make men perfect and build a utopia, Cato advises that laws be framed in such a way as to spur human ambition, incentivize virtue, and punish vice.

On the Danger of Luxury

“Pleasure succeeded in the room of temperance, idleness took the place of the love of business, and private regards extinguished that love of liberty, that zeal and warmth, which their ancestors had shown for the interest of the public; luxury and pride became fashionable; all ranks and orders of men tried to outlive one another in expense and pomp; and when, by so doing, they had spent their private patrimonies, they endeavoured to make reprisals upon the public; and having before sold everything else, at last sold their country.”

The Romans in their Decadence, Thomas Couture

While Cato praised virtuous self-interest, he also identified the obsessive desire for luxury as a danger to society. This was hardly a new idea in Western canon, but these ideas are constantly being forgotten. That was certainly the case in the lead-up to the South Sea Bubble.

Millennia before, Rome’s stable society and republican government atrophied as its leading citizens sought opulence. Wealth itself was not the problem, but rather a culture of narcissism that drove people to seek wealth in order to lavish it on their personal whims, rather than put it to productive use.

Rome became a republic of softness and indulgence. Public interest was replaced by self-serving narcissism, and vices took the place of virtues. People wanted to enjoy the fruits of labor without the hard work, and each was jealous of those who had more. It bears remembering that “republic” comes from the Latin res publica, meaning “the common matter,” and republics depend on a public spiritedness to unite citizens in a zeal for liberty and the republic itself.

As the leading Roman citizens and politicians pursued their private whims, they set the tone for citizens of every rank to do the same. A mimetic cycle ensued by which everyone sought to live more grandly than the next. Both the great and the humble turned in on their own interests and abandoned interest in the republic they shared responsibility for in common. 

In some instances, Roman statesmen literally prioritized their own fishponds as the republic fell apart. Read more about that in “Fishponds and Fighters.”

On Public Spirit 

“‘Twas in vain to think of bribing a man, who supped upon the coleworts of his own garden. He could not be gained by gold, who did not think it necessary. He that could rise from the plough to the triumphal chariot, and contentedly return thither again, could not be corrupted.”

The civilizations that Cato valorises—Rome and Sparta among them—were societies in which virtue, honor, and public spirit were prized far above wealth. In these societies, men could be honorable and poor. Cato uses the example of colewort’s to describe the ultimate simple but admirable lifestyle in antiquity. Today, we call this leafy vegetable “kale.” 

When men’s honor came as a reward for their virtue, virtue became popular and sought after in society. Rulers ought to be interested in making their people virtuous, as the virtuous are governable, good citizens, but wicked rulers strategically introduce vice in order to debauch their subjects so that they will quietly bear the yoke of tyranny.

The Roman poet Juvenal coined the phrase “bread and circuses”—panem et circenses—to describe how cynical leaders might feed and entertain subjects to pacify them. The opposite of bread and circuses might be “coleworts and chariots”—men who could feed themselves and ride into battle themselves, not for entertainment, but for honor.

Wealth, ease, and grandeur had replaced honor and virtue as social capital. Cato writes that “The Roman virtue and the Roman liberty expired together; tyranny and corruption came upon them almost hand in hand.” Officials who accepted bribes or enriched themselves at the expense of the public trust forsook a value that we speak little of today: public spirit.

Cato defines public spirit as love of one’s country—we’d say “patriotism”—and the term recurs throughout the 138 letters. He writes:

“This is publick spirit; which contains in it every laudable passion…it is the highest virtue, and contains in it almost all others; steadfastness to good purposes, fidelity to one’s trust, resolution in difficulties, defiance of danger, contempt of death, and impartial benevolence to all mankind. It is a passion to promote universal good, with personal pain, loss, and peril: It is one man’s care for many, and the concern of every man for all.” 

Cato himself admits that the notion may be antiquated, “too heroic, at least for the living generation” of the eighteenth century, but public spirit summarizes the qualities required to be part of a res publica, a republic. Republics have citizens, not subjects, and besides their obligation to self-preservation, citizens have duties to each other and the common good.

Without that spirit, tyrants inevitably fill the void.

Trenchard and Gordon died well before the Declaration of Independence in 1776, which their work helped to propel. The Founders and Framers heeded their lessons on public corruption, the importance of accountability in the state, and the importance of freedom itself. In James Madison’s first draft of the 1st Amendment, he paraphrased Letter 15.

Cato: Freedom of speech is the great bulwark of liberty; they prosper and die together: And it is the terror of traitors and oppressors, and a barrier against them.

Madison: The people shall not be deprived or abridged of their right to speak, to write, or to publish their sentiments; and the freedom of the press, as one of the great bulwarks of liberty, shall be inviolable.

We Americans should be wary of anyone who would attack the pillars of our republic—the honest pursuit of wealth, the spirit of patriotism, and the rule of law, including the “great bulwarks of liberty.” These are worth fighting for.

The Liberty Fund has published a two-volume edition of Cato’s Letters and made the text freely available online. I would encourage anyone to read them for many more lessons.

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John here. Again, let me strongly encourage you to subscribe to Joe’s newsletter. He interviews the Who’s Who of the tech world, politics, and more, as well as writes. He is a “stop what I am doing and read” kind of writer. You will thank me.

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