South Africa

Op-Ed: South Africa’s problem is greater and deeper than the Guptas, Zuma, and their cronies

By Mike Morris 14 August 2017

Corrupt practices are legitimised, slowly but surely drawing ordinary government officials into the web of illegitimate criminal practices and procedures, thereby structurally consolidating it at all social levels, and deeply entrenching the power of this new predatory capitalist class within the governing ANC and the society at large. By MIKE MORRIS.

Zuma, his backers and thieving cronies must go!” This is the often-heard call currently resonating across the landscape, repeated in different languages, with variations of anger and sadness, from mouth to mouth across the broad spectrum of South Africa’s citizenry. People from all walks of life, who disagree on a range of issues, are united in expressing disgust at these individuals who are perceived as betraying the promise of the varied hopes and aspirations of the citizenry. Spurred by the slew of daily emails streaming from the Gupta sewers, there is an increasing desire to wash the polity clean of these corrupt people who have captured the state for their own ends.

These sentiments are undoubtedly justified. Individuals are responsible and justice demands that they are held to account. However, if we only focus on personalities as the source of the problem then we are likely to miss the fact that what we are confronted with is a much deeper social phenomenon. We will be confused when high-ranking politicians, elevated by the whim of Jacob Zuma, suddenly change position and appear to be joining in the denunciations of the Guptas, or ministers whose suits smelling of corruption turn against their compliant underlings, or even signal their willingness to jump ship as the times get turbulent.

But this not a political crisis created by individuals who have lost their ethical way, who have lost sight of their moral compass and strayed from the path of the “struggle”, and who by implication can be brought back into the fold and reformed. For what we are confronted with is a deep structural problem, going beyond the ethics of personalities and their daily political manoeuvring. The problem is deeply entrenched in social and economic conditions which make it possible for a particular section of the elite to maintain a life style unrelated to their actual skill levels, economic capabilities, salaries, and investment incomes.

This grouping within South African society constitutes a new elite, an emergent section of the capitalist class, that is utterly dependant on a very specific predatory form of accumulating wealth and maintaining political power. A grouping that stands outside of the real economy and normal commercial activities. They demonstrate no productive means for generating economic growth. Their economic existence has nothing to do with the efficient application of capital and labour in the basic forms of productive activity. They are not dependant on shrewd financial investment yielding returns. Indeed their stake in the economy is not based on producing any value added goods or services. It exists outside of the usual parameters of capitalist economic activity.

The mode of accumulation of this predatory bourgeoisie (or elite if that term is preferable) is integrally dependant on illegitimately siphoning off financial resources from various levels and institutions of the South African state in the form of crooked tenders, shady procurement, illegal grants, back handers, and dodgy deals which result in no productive return for the economy. The money goes straight into bogus or dubious companies, conspicuous consumption, sheltered personal bank accounts, and illegally transmitted into hidden foreign bank deposits on a massive scale (rumoured to be around R100-billion thus far).

This corrupt form of accumulation by theft is not confined to directly emptying out the national, provincial or local coffers of the state. It is also directed at real suppliers who illegitimately seek government tenders to provide goods and services on the grounds of their “political connectivity”. The resultant large percentage sweetener for assuring the contract is simply added on to the original tender price, so the public fiscus pays in the final analysis. It makes little difference whether they are feeding off the state, SOEs, or private enterprises. Fundamentally it is a predatory form of accumulation, which yields no independent economic goods or services, provides nothing to spur economic growth. Because it is siphoned off from the government’s resources, it ultimately impoverishes the ordinary citizenry of the country by robbing them of funds intended for delivery of a wide range of essential services.

This class is predatory as well as parasitic upon the state. A parasite is totally dependent on its host, passively feeding off a larger independent productive organism. Likewise a parasitic class depends on its members being the passive recipients of economic largesse, usually from a large business to further its interests. Being predatory however requires a proactive process of independent engagement with the state to ensure that accumulation ensues. It feeds off political connection to state resources and, unlike simple parasitism, does not only depend on the crumbs of some other economic activity being channelled in its direction. Since state looting is at the very core of its accumulation process, this predatory class needs to actively ensure that its politically connected accumulation process continues unabated and unhindered. Hence establishing and actively seeking a symbiotic relationship within various government institutions and state owned enterprises provides the raison d’etre of its economic expansion.

But this predatory accumulation process brings it into conflict with many other groupings and classes in society who follow a different economic and social agenda. They value transparent accountability, open rules, constitutionality, etc. Some do so as an ethical end in itself, others (with greater flexibility since capitalism has its own moral fault lines) regard it as a pragmatic means ensuring they can prosper within the dynamic of a growing capitalist economy. Hence the logic of predatory accumulation necessarily results in contestation and struggle within the broader South African society, and this spills over into the institutional fabric and power relations of the state itself.

The predatory economic agenda requires being actively rooted (through exercising power and controlling decision making) within state institutions so as to ensure that mutually beneficial economic decisions are made, protected and implemented. Hence the state (and its institutions) becomes permeated with individuals – deployed or “discovered” to be corruptible – in strategic positions of power, actively seeking to secure control over resources, siphoning them off, and advancing their own corrupt interests. This is done through fraudulent tenders and sidestepping of regular supply chain governance procedures. It requires more than government officials stealing state funds. But rather directing contracts containing extremely large sums to specifically set up companies, owned by family members, or nominated cronies, or complexly linked networks of shady companies. These are then contracted to undertake publicly procured work at vastly inflated prices. The work is either done very shoddily at a quarter of the price, or not done at all with the funds simply transferred into a bank account.

The critical defining feature of this predatory criminal process, differentiating it from straight organised crime to which it has many other similarities, is that it involves setting up an alternative shadow structure of companies and ownership mirroring these government officials. It is a mechanism of class formation for the economically incompetent who would not survive in the cut and thrust of capitalist competition of the real economy, since they lack the real skills and capabilities required to operate productive enterprises. It provides such individuals with the opportunity to have “their chance to eat”, to rationalise that they “didn’t make the sacrifices of fighting for liberation to end up poor”. So they depend on this network bonding pliant government officials and company owners together in a spider web of corruption, continuously guaranteeing capital accumulation and growing personal assets.

Moreover, it is not restricted to the national state level. For this modus vivendi of corrupt procurement spreads throughout the various levels of government, the state and its institutions, from national departments, through to provincial government, and down to the smallest town council. Corrupt practices are legitimised, slowly but surely drawing ordinary government officials into the web of illegitimate criminal practices and procedures, thereby structurally consolidating it at all social levels, and deeply entrenching the power of this new predatory capitalist class within the governing ANC and the society at large.

Although it is to some extent rooted in the arms deal this differs in important respects from the process of class formation and economic accumulation characterising the 1990s-project undertaken in the Mandela/Mbeki era. The problem that all national liberation movements have in the immediate aftermath of independence is that a successful national democratic transition requires two critical elements. These are the formal constitution of a democratic state encompassing the entirety of the nation’s people within its institutions, and a strong indigenous, nationally grounded capitalist class to drive the national democratic project.

The Nelson Mandela/Thabo Mbeki class project recognised the weakness of the ANC lay in the fact that its foundation in the domestic economy through the existence of a strong indigenous (ie black) national capitalist class was tenuous. South Africa, due to apartheid’s exclusionary economic framework, did not have a large black capitalist class with deep structural economic roots. However, unlike many other countries involved in such a transition, there did exist a powerful domestic capitalist class (almost exclusively white) with strong international linkages, which was willing to not only accommodate to a new democracy but also cooperate with the new ANC government policy of black economic empowerment. Using various BEE procedures (accessing leveraged share ownership in large companies, board memberships, etc.), and policies which had their own serious flaws, big capital hence accelerated, sometimes above board and sometimes dubiously, the rapid rise of a new black capitalist class.

However the emphasis in these big corporations was on this new black stratum, once given the leg up through political connectedness, having to demonstrate that they possessed, or had the ability to quickly learn, the necessary business capability, professional competency, requisite knowledge skills, managerial acumen, and operational proficiency, so as to ensure that corporate success was never put at risk. Hence, despite the political mechanism of legalised state patronage by which this new black capitalist class was established, most of the individuals involved, if they were to remain at the leadership helm, had to have demonstrable ability to ensure that further profits depended on internal corporate growth.

The political problem Mbeki’s class project encountered was that the base of this new black class was narrow and hence always open to criticism from those concerned with more thorough redistribution. It also suffered from the corrupting influence of the arms deal which laid the rationalising seeds for grand corruption later on, and provided political cover for a fair number of politically connected individuals seeking to use the state for corrupt enrichment – the most obvious example being Zuma and Shaik’s relationship. So when appropriate political circumstances appeared, primarily as a result of Mbeki’s misguided attempt to run the government by proxy through a third term as ANC president, it opened the way for a concerted populist drive from those members of the ANC who felt marginalised by the Mbeki class project to argue it was their turn to eat from the “freedom coffers” of the new Zuma government.

Many of these ANC members, unable to make it into the portfolios of big capital, were less adept at navigating their way through economic challenges, lacking competency and qualifications to be incorporated into existing large companies, without the necessary solid technical or business skills to move up the occupational ladder, and less capable of starting capitalist enterprises in competitive circumstances. Accumulating capital under the project of cannibalising state resources instead enabled them to thrive, or in the case of those who had acquired real qualifications it was simply a demonstrably easier method for acquiring wealth, and such criminal habits become hard to shrug off. The post-Polokwane era opened the way for them to become consolidated as a structural group, and flourish as a second wave of the black capitalist class. Except this was now based on a predatory accumulation project, led by a president, who as the leaked emails continuously demonstrate, paved the way with his own deep linkages to a corrupt, foreign, corporate network – the Guptas – which through its scale of grand corruption put little Shaik’s ambitions to shame.

The notion of “state capture” only reflects the form that this takes but not its essence. Capture implies an external relationship to a state which has been stolen, in which case it can be captured back, rather than the more disturbing reality of a state riven with conflict, internally racked with toxic agents, and deeply divided. In this sense the captured South African state is more similar to a cancer stricken body struggling to contain and overcome spreading tumours, and where renewed health entails finding and eradicating dangerous growths pretending to be normal tissue. Parasites can be individually picked out, like blood sucking leeches, and brushed off, leaving the healthy body to resume its functions once this done. However a deep cancerous infection is not easily brushed off. It leaves the body caught between cells which appear normal but are destroying it and others engaged in trying to carry on with normal bodily functions. Hence as Pravin Gordhan has warned us, it will take many years to restore the affected state institutions so as to operate effectively and efficiently.

Maintaining state power of this predatory class requires more than entrenching a dominant economic agenda and securing people in high places within the state. In order to become politically accepted its interests have to be presented to the mass of the citizenry as somehow representing their own general aspirations. But ordinary people experience life through a variety of complex dimensions – social, religious, moral, political etc – expressed in an aspirational set of values about “the way things ought to be” in the new South Africa, which are not necessarily in synch with the tenets of the predatory accumulation project. Hence for this new predatory capitalist class to dominate and find broad social and political acceptance, its own interests have to be projected in completely different terms. It can’t obviously be honest about what its aims are and straightforwardly say: ‘theft and corruption, nepotism and cronyism, perversion and undermining of democratic constitutionalism, is what we depend on and you should all rally behind us to make sure we get the job done’. Rather it presents its agenda to the citizenry in a twisted way to make it appear as part and parcel of their lived experience, a new version of the “way things ought to be”.

There are a variety of techniques and communications in which this has been done by leaders and spin doctors of this predatory group. However, they all turn on taking key slogans and ideas from the liberation struggle for a non-racial democracy and re-racialising them. So they make them racially exclusive rather than societally inclusive, redefining who the purported ‘real enemy of the people is’, and in the process trying to deflect attention away from the reality of their own accumulation project.

The crudest form of this projection of their own interests as those of the nation is the slogan that “white monopoly capital” (both domestic and foreign), with the emphasis on “white” and “western imperialist”, and its “clever black urban” lackeys, are undermining South Africa’s democratic revolution and threatening the fundamental ideals of the national liberation struggle. Underlying this discourse is an attempt to pervert the way the liberation movement’s national democratic goals are presented, undermining the historic objective of building a non-racial democracy, and instead attempting to re-racialise the narrative of South Africa’s political landscape. In this discourse this predatory class and its political representatives are now portrayed in virtuous terms as saviours of the people. Indeed they are represented as those that can bring true freedom, and around which all black people should rally.

However there is nothing inclusive in this political project for the other social groupings in South Africa – the middle classes, workers, informal traders, poor, welfare dependant, marginalised, and unemployed. All that is common is the racial appeal to “blackness” as the basis for a cohesive vision of what ‘ought to be’. For the predatory accumulation dynamic is wholly excluding of all who are not part of the network of predation. Its cannibalism of state resources chokes economic growth and renders everyone else poorer. Its hollowing out of state capacity to sustain this predatory dynamic destroys the institutional fabric required to support a wide array of services for poor and rich alike. Its undermining of legality and due process renders the daily lives of those without connections insecure and arbitrary in the face of the police and the law. Its perversion of the constitutional obligations of the state fractures the foundations of democracy, rendering many social and political rights upon which the ordinary citizenry depend increasingly fragile. In short, its claim to a new inclusiveness is an illusion, and the long term consequences of this predatory class’s grip on power are wholly negative for all who fall outside of its patronage network.

Thus far the political shallowness, moral bankruptcy and analytical cynicism of this ideological portrayal has meant that it has not managed to gain sufficient traction, especially in the more sophisticated urban centres of the country. There is a concerted struggle within civil society, capital, unions, state institutions, and political parties, which is resulting in substantial fissures within the unity of this discredited Zuma-led ruling government. It has now become the fundamental fault line within the ANC, which is itself compromised by its immediate past as well as its current leadership.

South Africa’s economic and social problems are immense. Inclusiveness is the major priority. Economic growth must be restored. Gross inequality has to be tackled. State capacity must be enhanced. Constitutionalism must be defended. So what strategic alliances are possible within the South African citizenry to tackle this predatory class, promote an inclusive growth path, and protect a democratic state for all?

Alliances require being able to establish common interests that allow the building of shared visions. But this predatory class in its foundational origins and practice contains no coordinates for building a democratic alliance with a vision to create a shared non-racial and more equal society. It is dependent on an entirely self-centred, rapacious project which undermines, and is destructive of, the interests of all other social groupings.

The irony is that the alleged enemy it targets – monopoly capital – in the current circumstances is much better placed to play an important role in, although not lead, an inclusive alliance to build a broad democratic coalition for the restructuring of South Africa’s economic and social landscape. It appears to be finally stung into finding its voice and, led by Sipho Pityana amongst others, is pushing back against the current political regime. Big business has the economic resources and capacity to support a redistribution project to tackle inequality, but only if economic growth is assured to generate the resources to pay for redistribution. It requires a proper functioning state and institutional framework committed to due process and procedure, and hence will support rooting out those who have perverted state functions. Business needs the threat of further downgrades to disappear from the global landscape, and so will support a new growth path which guarantees its own profitable survival. It needs political stability guaranteed by a functioning democracy and stable government, for without it there can be no interest in further investment to impact on unemployment.

These are the foundational co-ordinates, shared by many, which coupled with an inclusive growth project, allow a broad ‘democratic coalition of the patriotic’ to be constructed, bringing together business, unions, and civil society in a shared vision of a non-racial, inclusive and appropriately regulated social order. These provide a backdrop, to act as a watchdog, supporting and monitoring the emergence of new political solutions, and are critical for flushing out the current polity of its predatory tendencies. The latter cannot happen if the problem is conceived of as problematic behaviour of certain individuals, tricky personalities, to be driven out of government and hence the solution left within the hands of the current political elite. Horse trading and deals amongst them will get rid of the worst people in power but will leave the structural foundations that supported them and allowed them to cohere into a predatory class still intact. If radical structural reform or transformation means anything, it is not the empty sloganeering of the current crop of corrupt politicians, but rather a significant attempt to eradicate the conditions and class basis upon which they exercised power and embarked on their destructive predatory economic and political project. DM

Photo: Atul Gupta, President Jacob Zuma.

Prof Mike Morris is in the School of Economics, University of Cape Town. He is an Honorary Research Associate, Institute of Development Studies, University of Sussex, United Kingdom.

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