The article by Russell Loubser, a nonexecutive director of SAA, (SAA is a priceless strategic national resource, June 27) refers.

He writes that "a disappointing aspect" of discourse on state-owned enterprises (SOEs) and SAA in particular "has been the oversimplified and emotive approach, often devoid of facts and rational thought".

We should not question whether we need SOEs or SAA at all, but need to contemplate the alternative to not having such a priceless national resource, Mr Loubser argues.

Firstly, as a former CEO of the JSE, Loubser should know that SAA is not "priceless". Just as Comair has a market value and investors value the company each day, and ironically trade it on the JSE of which he was CEO, so would SAA if it was to be privatised and listed. The statement that SAA is "priceless" is an emotive one, if I ever saw one, if not only plain wrong.

Then Mr Loubser attempts to underscore the importance of this "strategic national resource". Here he explains the amount of taxes generated and paid over to the state by the airline business.

Would the consumer not prefer to pay less in taxes, which account for up to half of domestic flights these days? In so doing, Mr Loubser gives away that he confuses "national economic interests" and the interests of the people - that is, the taxpayer who must support this loss-making SOE.

SAA would not disappear if it was to be privatised, but be streamlined and run more efficiently and cease to be another political tool of the state. In so doing, SAA will also be less of a financial burden on the taxpayer. Taxes paid to the state are monies and resources wasted, as economist Murray Rothbard explained through rigorous deductive logic, which Mr Loubser so hankers after.

Finally, Mr Loubser argues that SAA should not be privatised or foreign competitors allowed access to our market, because "experience shows that non-South African companies will take decisions without reference to what is good for the South African economy". But experience shows that foreign companies that invest in SA are focused first and foremost on serving customers here, the broader public, which is separate from the state, a class distinction first explained in the 19th century by French liberal thinkers Francois Guizot and Augustin Thierry.

Who is this "we" Mr Loubser talks about, as if it is a foregone conclusion that the interests of the people and the state are aligned?

Economic science and logic proves the freer an economy, and the less state control over resources, the greater the prosperity that can be created for the people. The fact is we do need to question whether SOEs should be privatised or not. It is the key question to be dealt with.

Chris Becker

President, Ludwig von Mises Institute SA