When no-one is held accountable, everyone suffers

Zuma engages in polite debate

In November 2007, Tiger Brands was fined R 98.8 million for collusion in fixing the price of bread. This was only 5.7% of their revenue; other manufacturers – who didn't fez up in time - face fines of 10% of turnover.

This satisfies our natural urge to punish those responsible for causing society harm. However, who exactly is carrying the pain here?

A penalty like that does more than take profits away from the company, it also reduces their ability to pay salaries, do maintenance, or make future investments. They can choose to absorb the cost, by firing people or reducing capacity; or they can pass on the cost through higher bread prices.

In other words, a punishment aimed at the company becomes a punishment that society must bear.

Conversely, it may not be as spectacular to penalise only the people who made the decision to collude, but it is more effective. In making people personally responsible for the choices they make, one has a better chance of reducing the risk of penalising everyone.

The current alternative – of not holding anyone accountable – has catastrophic consequences that ripple out far further than you can predict.

Kenya's elections have resulted in violent conflict stemming from the failure of two men to agree on what is best for all. The Kenyan tourism industry has collapsed, tea plantations can't get their goods to market and industry is in chaos.

Worse, though, is that the blameless citizens of Uganda, Rwanda and Burundi have been dragged into the fray. Fuel supplies that must come in via the land route through Kenya have been disrupted. Refugees are squabbling on their borders. And the region's tea growers are all in trouble as Kenya was the main despatch and purchasing hub for international buyers.

Back home, the failure of the South African government to hold the health ministry to account sees millions dieing from AIDS. Electricity, and its ails, have been discussed to death; but consider the knock-on impact to industry in Namibia, Mozambique and Botswana – countries that were hoping to grow their economies and push their own people out of poverty.

Collectivism is the source of the thinking behind forcing entire nations to be punished instead of the individuals responsible.

It is what the ANC Youth League has in mind when they demand that pubs be closed on Sundays because a very small number of people can't drink without starting a fight. It is what Jacob Zuma has in mind when he says, "Once decisions have been taken by a collective, you can’t punish individuals as if they’ve done something deliberate." If a few people are irresponsible, we should punish everyone.

In a system of this nature it is impossible for talented people to get ahead, or for incompetent fools to be removed from positions where they will cause harm. The assumption that governments make when refusing to hold individuals to account is that collective punishment will never happen.

Hence President Thabo Mbeki's obvious confusion and panic as he attempts to account for how it is possible that a decision not to invest in new energy capacity a decade ago could possibly result in all the chaos today. Plus, having carefully promoted only the most incompetent people into positions of command in both government and the parastatals he is finding that there is no-one who is capable of taking responsibility for sorting things out.

As Friederick Hayek said, "In a competitive society most things can be had at a price – though it is often a cruelly high price we have to pay … The alternative is … orders and prohibitions which must be obeyed and, in the last resort, the favour of the mighty."

Well, we've got lots of orders and prohibitions, and the mighty we require favours from are incompetent, unaccountable and passing the punishment back to us.