Capitalism in its different varieties globally has improved the quality of life of humankind.
The proletarianisation of my parents who fled poverty in the Transkei with a desire to change their lives despite exclusion by the apartheid government brought some positive outcomes. Because of them, I have the opportunity to contribute knowledge in this fortnightly column.
However, capitalism has also entrenched deep inequality, poverty and chronic unemployment in many developing countries. In SA, unemployment is at 29% and growing, with those between 15 and 34 years of age at 58.2%. Poverty is estimated at 55.5% in a sluggish economy, which shrank 0.6% in the third quarter of 2019. It is therefore understandable that many South Africans believe the state, specifically socialism of an SA type, can defeat what is perceived as the perpetuation of the ills of capitalism by white monopoly capital.
It was revealing last week to witness the defeat of the Labour party, which stood on a ticket of state ownership of key sectors of the economy reminiscent of the post-war settlement. Of course, a number of variables were considered by the electorate that explain their choice of Boris Johnson and the Conservative Party.
I do not know what its successes and ills will be, except that it was rejected by the people of the former Soviet Union
In SA, transport minister Fikile Mbalula has hinted at a state-owned shipping company and the minister in the presidency, Jackson Mthembu, recently announced the formation of another Eskom war room.
The power utility, whose war room was led by then deputy president Cyril Ramaphosa in 2015, delivered stage 6 load-shedding last week and all the conspiracy theories that accompanied it. In the process it took away jobs, growth and additional tax revenue that would have gone back to the government.
Mthembu hinted that Andre de Ruyter will join the troika of finance minister Tito Mboweni, minerals & energy minister Gwede Mantashe and public enterprises minister Pravin Gordhan to take SA out of the abyss. It could be part of a plan to take SA to its version of socialism. With all the ills of capitalism there for all to see, this ideal, socialism, is getting some attention. I do not know what its successes and ills will be, except that it was rejected by the people of the former Soviet Union.
But I do know what the war room and former president Jacob Zuma’s radical economic transformation have delivered. They have brought the misery that in our state-led model is selectively apportioned to white monopoly capital. Listening to Mthembu, there is an assumption that the war room can somehow bring in new relevant information and powers to the high table in the central planning committee of the quartet. Armed with all the necessary information, it can then make sound and well-informed decisions in the pursuit of economic development and human need. Hela banna!
Biggest lenders
In the history of economic development, thinkers have always stressed the importance of knowledge and reason. Some of them overestimated the power of human deliberations in the face of the complexities involved. These found their way into Marxism and the ANC and its alliance partners, who believe it is possible to construct a socialist state by crowding in development finance institutions such as the Industrial Development Corporation, the Development Bank of Southern Africa, the Public Investment Corporation and even the Reserve Bank to finance state-owned enterprises (SOEs).
This model apparently has been learnt from China, where state banks are the biggest lenders to the SOEs. I shiver at the thought, given the violence of the People’s Liberation Army (PLA) against the Kuomintang and Deng Xiaoping’s role in the Tiananmen Square massacre.
As I watched the ANC Umkhonto we Sizwe celebrations at the weekend, I remembered a 2014 academic paper by Karl von Holdt, called On Violent Democracy, in its description of the Zuma years. SA, this is not the time to experiment, but to implement an inclusive, low-carbon capitalism that addresses problems in partnership with a capable, effective and efficient regime, not central planners.
• Mondi is a senior lecturer in the Wits School of Economic and Business Sciences.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.