Defend Truth

Opinionista

Common cents: The State Capture Commission is itself a symptom of State Capture

mm

Ben Cronin is an advocate of the high court and a state law adviser. He writes in his personal capacity and his views do not represent those of any other party.

While the Zondo Commission is useful for uncovering why an event or particular outcome occurred, it cannot really be used to hold individuals accountable. Were the commission to attempt the macro task of uncovering the root causes of State Capture, it would need to begin with a simple question: Why is the state liquidating itself?

Like a cat chasing its tail, the Judicial Commission of Inquiry into State Capture, Corruption and Fraud in the Public Sector including Organs of State (Zondo Commission) has rolled on for more than 400 days, airing the litany of looting and larceny that has taken place in the state of late. 

While in many ways it is cathartic (albeit occasionally cringeworthy) to listen to it drone on, this commission is in fact itself part of the steady and ceaseless liquidation of the state — which is the true cause of this phenomenon of “State Capture”.

The well-funded commission, which uses private legal inputs in the form of attorneys and advocates who charge by the hour, is duplicating an existing state function, namely that of investigating and prosecuting individual crimes. Rather than looking into the systemic cause of State Capture, it seems preoccupied with the escapades of “capturepreneurs

As this liturgy of quasi-litigation goes on, the real state entities tasked by our Constitution with investigating and prosecuting acts of crime are steadily defunded, depopulated and increasingly rendered defunct.

Where does the concept of State Capture come from?

The term “State Capture”, which is often claimed to have been used first by the World Bank in 2000, is in fact really just a variant of a long standing economic concept of “regulatory capture”, a phenomenon in which “state regulatory agencies… regulate business in accordance with… private interests as opposed to the public interest for which they were established”. 

While the World Bank should perhaps be given some credit for rebranding this concept, it should be given far less credit for its commonly articulated but wholly inadequate proposals to address State Capture.

Instead of emphasising the need for sufficient government spending and staffing to meet public needs, the emphasis all too often has been on reducing the capacity of the state and merely changing the manner in which the private sector engages with the state. 

In other words, legal gymnastics. 

The goal of these measures is not to reduce private influence on state functions, but rather to introduce superficial transparency and litigious review of outsourced state functions. The effect of this approach is actually to legitimise private capture of the state’s regulatory functions via the legal system itself. 

Unfortunately, there are signs both in the character and direction the Zondo Commission has taken that it may fall into the very mess it seeks to clean up.

If the aim of the commission is just to secure the prosecution of a few individual acts of corruption, then it is both misdirected (unlike the police and prosecuting authority, the commission is not the right body to perform this function) and a missed opportunity. The real need for the commission is to examine the underlying cause(s) of State Capture.

Commissions of inquiry are precisely needed for intersectional, multi-disciplinary and macro-investigations into complex societal ills that purely legal processes like the courts are not suited for. 

Thus, while the Zondo Commission is useful for uncovering why an event or particular outcome occurred, it cannot really be used to hold individuals accountable. In my opinion, were the commission to attempt the macro task of uncovering the root causes of State Capture, it would need to begin with a simple question:

Why is the state liquidating itself?

In other words, one would need to ask why politicians have so completely embraced outsourcing and downsizing, with endless bouts of austerity being imposed on the state. To be fair, this process really began in the 1980s and is by no means new, but it has to be noted that it continues unimpeded to this day. 

Even as the Zondo Commission reaches its moment of crescendo, the National Prosecuting Authority, which has suffered years of constrained spending and for several years was not given the budget to train new prosecutors, has had its budget cut again in this 2021/22 financial year. 

Across the state, the persistent defunding and denuding of capacity can be seen.

Perhaps the best way to illustrate this process of self-imposed state liquidation dating back to the 1980s, is to zero in on a single state-owned enterprise. Let us take Eskom as an example.

This publicly owned utility (now company) was in the early 1980s the fourth-largest electricity utility in the world, employing more than 66,000 people including engineers capable of building power plants from scratch and maintaining them indefinitely. From the mid-1980s all the way through to today, a steady process has been under way to dramatically reduce the capacity of this utility, outsource its core functions and compromise its original source of funding (the state).

Starting in the 1980s, Eskom was corporatised, its workforce was significantly reduced and it was prepared for some form of privatisation. The advent of a democratic South Africa did not stop this process, with the trade schools being closed down, the accelerated corporatisation of its operations and the blocking of further investments into its capacity in the 1990s and early 2000s.

While outright privatisation has consistently been politically unpalatable, the deliberate policy of restructuring and underfunding has essentially achieved a similar outcome. Eskom — both in its use of its revenue and the distribution of its proceeds or “profits” — has essentially been privatised.

On the one side, Eskom is now heavily dependent on outsourced procurement for the building and maintaining of its core capacity — electricity production. The effects of this are now well documented by the Zondo Commission. The private capture of Eskom, however, extends deeper than merely its operations as it has seeped into the collection of its surplus.

The recent release of Eskom’s financials discloses that more than 90% of Eskom’s earnings before interest, taxes, depreciation and amortisation goes to private bond holders (at usurious rates). 

Eskom might be owned by us, as the public, but the surplus earned from this state monopoly has essentially been privatised. Hence the 15.63% hike in the price of electricity imposed on all of us flows not into new publicly employed engineers or newly developed publicly owned technology or state capacity, but largely to domestic (and foreign) private bond holders.

This is no accident — it is by design.

Do we really need to be Keeping Up with the Gigabas?

It is clear that the Zondo Commission has been a boon for private legal services and the media — neither of which I would blame for the direction the commission has taken. But when this long-running reality TV show comes to an end, let us not fall into the same trap as that of the Marikana Commission of Inquiry or the absence of action in the wake of the Life Esidimeni tragedy. 

We must all guard against excessively focusing on the symptoms and instead turn our attention to the underlying cause of the disease.

If we are really to deal with the capture of our state by private interests, we need to probe the unnecessary and self-destructive policy of austerity. Every day we hear drums beating to the tune of a “bloated state” while hospital queues, classroom sizes and the number of unemployed grow.

The only sustainable vehicle to defend the state from private capture is a well-funded and professionally run civil service. 

If the Zondo Commission is merely envisaged to act as a topical ointment to bleach away the most recent blemishes of corruption, then it will fail to diagnose the true cause of State Capture: the anti-democratic policy of austerity and backdoor privatisation. DM

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 7

  • Hear, hear – but the emphasis must be on “professional” (ie: well qualified, un-politicised, meritocracy, independent, audited, accountable.)

  • Another zero sum game article. The State or privatisation. The State/Public sector has extensive means. money, systems and management controls to be accountable and effective. It has chosen for reasons of greed and political ideology to abuse the tools at its disposal, and rather rape our nation, whilst providing jobs for friends, the cadres. The solution as mentioned in the article, and widely recognised and agreed upon, is an effective civil service. However, there is little to no political will to have such a system. Political power would have to be surrendered to a system focused on delivery and serving the people. Imagine an African Government following such a course. It would be a beacon of light in the sea of darkness across our Continent. Our President has initiated some project style structures to work around the public sector self imposed constraints, and genuinely attempt public private initiatives where resources are combined to find winning ways that achieve action/delivery. Even though these are a costly duplication they are to be welcomed, as they may well show part of the how to, in the current fog of failure that is our Government and public sector. In the meanwhile, to get any bang for our buck, the media and civil society must turn our attention to having the findings of Zondo acted upon. Putting criminals behind bars will send a desirable signal. Getting some of the dosh back will be a bonus. Lasting change to set Government/the Public Sector onto a sound professional footing delivering services to the people will frankly be astonishing. We live in hope!

  • “The only sustainable vehicle to defend the state from private capture is a well-funded and professionally run civil service.” I agree 100% Ben, but as long as the anc rules this country the criminals will do what they do best – enrich themselves and their organisation, no matter the cost to the country nor it’s people. When there is zero integrity there can be no professionalism.

  • If we want to stop the capturing and destruction of the State, we have to change our political system. The thieves are politicians, the seekers of power. Our leadership is – well, can we even refer to it as that? It is defunct. Dysfunctional. Self-interested. All over Africa, and most of the world. Because we the people are too busy with our own lives to worry about government. Political parties conspire among themselves to enrich themselves by stealing from the nation that entrusted them to look after our affairs. Combined with multinational corporations operating their business model devoid of national loyalty, ethics and a moral compass, it is a perfect foil for the political class. Sovereignty protects the actions of each State. Generations looking back will see this period as the last gasps of a failed democracy / capitalist free market system who enslaved the world to enrich a few, and destroyed it in the process.

  • This is an important article and deserves to be featured in Business Maverick and Maverick Citizen as well – with the valuable comments that have been made on it so far. It’s difficult to imagine how the critical challenges posed by the article can be acted on. But such well-articulated awareness makes a good start. Thank you.

  • The state is not liquidating itself. Its wealth is being extracted and wasted. In the process the eye is taken off the ball – competitive efficiency. Patronage bloats payrolls, yet competence is dissipated. Maintenance, training and investment take a back seat for lack of funds, and debt levels creep up (short termism). If it wasn’t for the fact that our debt/GDP ratio is shooting up, one could decry austerity. We need FDI, and therefore need to appeal to outside capitalist interests. Extractiveness is the real problem.

  • A depoliticized public service, staffed by competent, honest and intelligent honest personnel,and a state that supports industry, small business and very little red tape, promotes production rather than consumption- that is what we need and what we are unlikely to get with this govenment

  • Please peer review 3 community comments before your comment can be posted