Last week this newspaper reported that the Constitutional Court had overturned the Western Cape government’s sale of the former Tafelberg School site in Sea Point in Cape Town, which had been sold to a private buyer for R135 million in 2015. The Court found that the province had failed to properly consider whether the well-located public land should have been used to help address the housing shortage before selling it. The case was brought by housing activists who argued that the State had a constitutional duty under section 26 of the Constitution to promote access to housing, particularly in areas where land is scarce and valuable.

While left-wing activists have celebrated the judgement, it has terrible implications for the poor.

The court gets the economics and social justice back to front. By its inference, the shortage of housing arises from the fact that the state has not provided enough of it and not from the fact that the investment rate remains too low for the economy to grow fast enough to create opportunities for people to earn incomes and accumulate assets. Hence, it in practice found that the state should be compelled to provide more housing, even at the cost of blocking investment. Take that to its ultimate conclusion and private investment, in public infrastructure at least, should be suspended until South Africa’s government has provided people with jobs, houses, medical care, and the like.

Reverse-engineer the reason for South Africa’s housing problem and the wrongheadedness becomes explicit. Why does South Africa have a housing problem? Because the unemployment rate is over 30% (the global rate is 4.9%). Why is the unemployment rate so high? Because the rate of growth in the economy is just 1%. Why is the growth rate so low? Because the investment rate, which measures capital committed to the economy as a share of GDP, is half of what it should be.

South Africa’s foundational problem, therefore, is that the rate of investment is so low. Now the highest court in the land has imputed that there is a conflict between investment and social justice and that this should be settled by cancelling the investment.

This is the trouble with an activist court in lockstep with social justice activists, often funded from abroad. They have ended up with a court judgement that while being celebrated from New York to Brussels to San Francisco has in practice made it much more difficult for South Africa to address its socio-economic inequalities at scale.