Lest Black South Africans start burning down the apartheid economy and taking over the land that the ANC gave back to them back in 2017: They will continue living as hostages to imaginary Covid-19 in their own country until they all die of hunger

By Hadebe Hadebe

[Side Note: There is nothing that the apartheid economy has in store for Black people in South Africa anymore. It has emerged that the majority of apartheid companies in South Africa have been deducting Unemployment Insurance Funds from their own workers’ salaries, but those deducted funds never reached the Department of Labour. One worker who has been working for a certain company and having UIF deducted from her salary for years came on radio and said she only received 76c of her UIF savings. And you still don’t see a need to get rid of this diabolical economy of corruption and thieving…]

Many years ago former president Thabo Mbeki was asked about the mounting political chaos in Zimbabwe at the time, he responded: “Crisis, what crisis?” When discussions about the country’s economic problems and how politics continues to fail the nation arouses denialist rhetoric in high quarters like: “Crisis, what crisis?”, that indicates a sorry state of permanent crisis being denied its existence. But where is the crisis? Or is there a crisis after all? Yes, there is a crisis. Unemployment keeps rising and poverty levels are climbing.

First, it is important to understand the relationship between politics and economics in order to locate the source of this persistent crisis which the CR17 government seemingly fails to decipher, or which economic think-tanks would rather prefer no one talks about it. And this crisis threatens to erode the capacity of politics to take charge and solve the socio-economic problems that confront the democratic dispensation.

Freedom on a hungry stomach characterizes the life of many South Africans, particularly the black majority, who stand in the sidelines as others devour the beast in an economy that persistently excludes them. 

Secondly, it is worth mentioning that the peaceful co-existence between politics and capital in South Africa occurs at the great expense of the people whom the end of apartheid was supposed to deliver political goods (public services).

One of these public goods is a functional economy that is beneficial to all in terms of production, employment and participation. Politics is about ensuring that political goods are delivered including jobs, oh yes jobs! Employment is not supposed to be left to markets to decide, this a key responsibility of politics. This article therefore asserts that there is a glaring failure and inability to utilize macroeconomic policy to deliver the political holy-grail of economic freedom to blacks in post-apartheid South Africa. 

The neo-liberal school of economics maintains that a government is supposed to only play a role of a facilitator in the economy, and not participate directly because it is likely to crowd out other players due to its unmatched spending power. This thinking informs the strong push for the sale of state-owned entities (SOEs) and for the reduction of public sector wage. The envisaged outcome is simple: a weaker government and a monopolistic private sector. Government is only seen to be good enough to only clean the streets, fix roads and all other things people consider important but would rather not do them themselves (through tendering system to private sector players).  

Unfortunately, this view about the role of government in the economy is extremely out-dated and is responsible for the socio-economic problems the country has been experiencing since the end of apartheid. If it is not resolved, freedom will keep eluding the black majority who suffer from unemployment, diseases, poverty and inequality.  

If in the past, the white colonial administration set up the Carnegie administration to investigate poverty amongst whites, the fate of apartheid victims is as bleak as it was in 1977. Capital runs the show while everybody watches.  

The reality is that when it comes to the economy, the situation of South African Blacks has only changed only a little bit but proportionally remain an abundant source of cheap labour in an economy they will never ever own (Side Note: unless they burn down the Western apartheid economy and start their own) .

At the end of the day the role of politics (which is about deciding who owns what and how that should be re/distributed) is left hanging in the air for the “markets” to take and use its illusive invisible hand in the distribution of not only assets but also political goods. This system has lobbyists and funders (large corporations and banks) who use their mighty resources to influence political outcomes. Voting is only there to legitimize the state takeover by capital. Political party funding is the worst thing that can ever happen in a political system. In fact, closeness of politics to capital creates masters (owners of patronage) and slaves (rent-seekers).  

The opening paragraphs essentially explain what is happening in South Africa and many other neo-liberal democracies across the world. The only reason the South African constitution is hailed as the best in the world is based on one key reason: it plainly separates the political sphere (democracy and government) and the economic sphere (large corporations and financial sector). What this means is, the voting system (democracy) only affords to elect a government people want but it can not veto the economy. The economy is under the tight control of free-markets of a minority of players in South Africa known as White Monopoly Capitalists. Of course, nobody elects these mysterious oligarchs that most people only read about in the newspapers.  

This system means only one thing, the role of politics is minimal or very limited. In the South African situation this may be interpreted that politics is junior to economics. Put simply, politics is used to entrench the power of markets that have latitude to decide who gets what, how and when. That responsibility isn’t in the hands of politicians but in the hands of a highly manipulative yet invisible hand that has a final say behind the scenes.  

As such, the ANC under CR17 leadership has since ceased being a political party to becoming a useful tool of capital that kills the dream of the very same people that elected it 3 years ago, the same people it claims to serve and protect. All other political parties from the EFF to DA are maidens who also desperately want to be dined in Davos by top capitals of the world. The post-apartheid dispensation is founded on this principle; an American academic Naomi Klein calls it “a democracy born in chains.” Any hope that the legacy of apartheid will ever be destroyed is an illusion, the powers in Sandton, Stellenbosch and London see no reason for doing so. [Side Note: Unless a Black revolution changes this diabolical trend].  

As already mentioned above, politics is about resources: their ownership, access and re/distribution. In a country where the real production of goods (manufacturing) is low and or least prioritized, the financial sector is king.  

Understanding the economy in practice, loss of political capital

BIG MISTAKE 1: Financial sector is king

Currently, the ANC under CR17 leadership secures the ownership of the South African economy for White Monopoly Capitalists (primarily financial services). After all, they are kingmakers in everything that pertains to the lifeline of the economy. The financial sector is the sole gobbler of government bonds which in turn facilitates their trade in open markets. This enables fairly large inflows (portfolio investments) to come in via the Johannesburg Stock Exchange (JSE). The dollar income for the country is now solely in the hands of the financial institutions, and manufacturing sector plays a minimal role.

This explains the deregulation of exchange controls in the ANC’s economic desk and others with powers to make economic decisions. As such, the economic policy of the ANC no longer has anything to do with the delivery of political goods, especially the economy that is supposed to create equal opportunities for all and take millions out of poverty. But it is about serving the heavily financed economy where the so called investors have absolute power, even more than the government.  

One decision from investors to pull out their money sends the economy stumbling [Side Note: Which will be a blessing in disguise for Black South Africans for this will afford them an opportunity to create their own economy with new players from the East who will treat them like partners rather than as scavengers].

MISTAKE 2: Manipulation of economic outcomes

The CR17 government then lets the financial services manipulate everything in the economy including jobs, credit system and the character of the economy itself. Depending on whom they favour, that person or company is pumped up with resources. The company is supported to get state contracts and they ask no questions but pay the trolls. Such things as procurement laws are nothing but tools to perpetuate exclusion and apartheid-like economy. Reservation of privilege for a few.

Large white companies are said to be benefiting at least R800Bn from state contracts and government support. This amounts to about 50% of the national budget, but it excludes investments by the Public Investment Corporation (PIC) and other state-owned development finance institutions. Also, not included is business these companies do with SOEs and municipalities. The financial sector is a banker for government and its institutions; hence the push for a state bank does excite markets. [Side Note: A bank that will be sold as State owned while the real owners behind the scenes is Private Capital].

MISTAKE 3: Bank master plays No. 6

The financials that flow to the private company after government (and its institutions) have paid up go to the company but a large chunk goes back to the bank and its institutional investors (e.g. FutureGrowth). Only a pittance goes to wages for the mainly black workforce. So, the notion of ‘saving jobs’ is not only callous and illogical but it is extremely unsound. When a particular company struggles, the PIC jumps in with a huge bailout - money goes to executives and owners. Again, nothing goes to the black worker.

The SA economy is not distributive and thrives on suppressed wages. It is funny how SARS talks about a shrinking tax base, and how a small select people earning R1.7m and above prop collections. [Side Note: Corona virus is a stun grenade that was aimed at crippling the ANC government since due to lack of employment opportunities, South Africa now relies heavily on taxing the private sector. By closing the private sector for such a long time under the guise of Covid-19; the government will now have little taxes to collect so that it will go begging for more loans from IMF to meet its fiscal responsibilities. This is to keep South Africa under the ownership of the Rothschilds for another 20 or more years through debt. But the question is what happened to the oil reserves that Former President Jacob Zuma announced their discoveries a few years back off the coast of Cape Town. Here and here].

When these gas reserves were discovered, economists predicted that the South African rand will never fall weaker against the US dollar. Is the rand still weaker against the US dollar in spite of these gas reserves because they were part of a CR17 R1 Billion sale voucher of the country to the White Monopoly Capitalists in 2017, per Public Protector Busisiwe Mkhwebane's leaked Bank Statements findings?

MISTAKE 4: Myth of taxpayers’ money

It is a great myth that poor blacks gobble taxpayers’ money with grants and other social spending. Better paid whites (and other superior blacks) from the arrangement outlined above come out to talk about 'taxpayers' and how 'their' taxes are wasted on social grants and other social spending. For example, one Sello Lediga outrageously suggested that the 10 million people eligible for a R350 grant during COVID period should sweep the streets. Yet, there are no mumblings when savings of black workers are used to bailout Edcon. One company gets R2.7 billion in the name of saving jobs – owners and executives take a large chunk, and black workers get not more than R3,000 per month. Pure blasphemy!

In fact, what Lediga and his ilk forget is that these grants immediately flow from Blacks to white retailers. Almost immediately these people are back in the streets begging for food.

MISTAKE 5: Indebtisation of a Nation

Moreover, the little income the low wage black workforce earn makes them eligible to credit which could afford them to buy cars, houses, etc. Banks create an indebted nation which has no space to save or raise its children. 

The Consequence...

This is something that economists and other analysts will never ever tell you. The end result are twin peaks: high debt and high cash reserves held by companies and the financial sector.

In a paradoxical situation that appears to conveniently escape the attention of economists and political science scholars alike, these stashes of cash exist concurrently with high debt to form an unenviable pairing, otherwise known as the ‘twin peak’. Somehow these two competing twins fail to reconcile one another through the operations of the market. The persistence of twin peaks results in stagnant wages and extremely high unemployment, especially amongst the youth. This in turn creates lower aggregate demand in the economy, and, in a never ending cycle, also reinforces pessimism of investors who then withhold their capital.

Yes, corporate South Africa deny that they hoard cash but are also quick to point out that the political risk is too high in a country that they continue to milk with impunity. The absurdity in all of this is that these companies have always had it good in a country where political change has not really mattered for as long as the economic system remained unchanged. The large amounts of cash in the hands of companies represent “wastefulness” and could easily develop human talent and help to rejuvenate the economy, which has been in the toilet even long before apartheid ended.

This is a summary of why South Africa has a poorly functioning economy with high unemployment, and also a very low political energy to take power from markets. As far as this picture is painted, South Africa has a permanent crisis of unemployment and economic apartheid. Politics is unable to solve it.

Siyayibanga le economy!