As Foucault argued, “Power is not an institution, and not a structure; neither is it a certain strength we are endowed with; it is the name that one attributes to a complex strategic situation in a particular society.”
Self-evidently, the so-called “Big Man” theory of history – or, as Thomas Carlyle wrote, “the History of the world is but the Biography of great men” – is questionable.
It makes more sense to see the world from the bottom up and emphasise the life of the masses creating overwhelming waves of smaller events which carry leaders along with them. But alongside this are the irrepressible currents of capital which, in 2023, come closest to representing true power – the ability to fund, and the ability to extinguish.
For those at the South African National Treasury and the Reserve Bank (Sarb), this should be of some concern. This month, the Sarb said in its financial stability report that foreign investors have been selling SA government bonds since 2019. This was flagged as “a significant structural shift, especially considering the significant increase in government bonds issued during this period”.
According to Bloomberg, SA government debt owned by foreign investors has dropped to 25% from 43% in 2018. In the same period, the cost of South Africa funding itself from 10-year borrowing has risen from 9% to over 12%.
But who is selling, and in the process imperilling, the ability of the SA government to fund itself?
Several years ago I was part of a debt investor roadshow of the National Treasury. Needless to say, such investors are extremely well-informed. There was little that the NT could tell them about South Africa’s economic trajectory which they did not already know. At many points, I remember thinking, if anything, the delegates from Treasury looked as unsure and concerned about the outlook of South Africa as the investors.
The tables have turned.
Now, it is global capital that runs the politics, the economics – it is them who say yea or nay, who allow things to transpire or to be abandoned by the wayside. It is the smooth, tanned managing directors of these firms, straight out of the Harvard rowing crew, who stand on the top floor of a skyscraper in the heart of the City of London and are heard to mutter, “I oversee $100bn of emerging market fixed income” in dulcet tones while sipping Diet Cokes and eating ‘working lunch’ mini egg and cress sandwiches.
It is not the politician or the captain of industry or the voter, and especially not the miner at Marikana or the rural unemployed, who have any hope of influence, for such is the obvious power of persuasion of global capital – it will co-opt or simply steamroller any politician into line, be they hopeful, idealistic or simply venally corrupt.
Those of a Marxist bent would say this is where the world has gone so awry. This strange world of capital – with its opaque and impenetrable jargon – has a source of agency, power and influence. It makes politicians, especially from countries that fund themselves from borrowing, like South Africa, cower.
With the capital comes the power.
Capital will either arrest the descent or fund the decline of South Africa.
Of course, this is nothing new. Famously, it was at the World Economic Forum in 1992 when the forces of global capital took Nelson Mandela aside and explained what he could and couldn’t do when he became president. At that moment, South Africa entered the orbit of global capital. Since then, it has been a pawn to such interests.
The supposedly non-aligned bent of the SA government in the past 10 years, openly pandering to the interests of China and Russia, is a hackneyed attempt to diversify away from what Foucault would term a “strategic situation” of being hostage to Western capital.
For a country like South Africa, it is impossible to have any agency: one can merely choose which provider of capital’s interest is most aligned with one’s own.
Such is the reality of the world post-1989.
The capitalist system and structure are all-pervasive and all-encompassing. All politicians can do is look West or East for succour.
Whether we like it or not, we have all been subsumed by it. We are all products of its soul. DM
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