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I have got to find a way of continuing to populate this website. The reasons posts are becoming infrequent and irregular is that almost every day I produce bespoke and paid for research. I have less time every week to write specifically for nicborain.wordpress.com … except the occasional philosophical musings, which probably have a … very specific? … readership.
I am going to continue the philosophical and theoretical musings. I am finishing the last few chapters of Jared Diamond’s extraordinary “Collapse – How Societies Choose to Fail or Survive” - Penguin 2005. As background reading to my professional work trying to make sense of politics and economics in the sub-continent (or anywhere in the world for that matter) it is seminal … I cannot recommend it highly enough.
So I will review it here. And I will keep raising issues associated with the epistemology of what I do – and other obscure matters of concern to me.
However, I will also start posting summaries of my recent views, interviews and perspectives … the first set of these below:
Iran, MTN and US secret power
The big issue of the week – in a lot of universes, but particularly the financial market’s – was the $4.2-billion lawsuit launched against MTN last week by Turkcell in the United States District Court of Columbia in Washington DC. The Mail & Guardian had way the best coverage – see here for a good backgrounder.
MTN investors took a serious bath on the news. The basic allegation of Turkcell is that MTN’s ‘Project Snooker’, driven by then CEO Phuthuma Nhleko (with some help) was a successful attempt to ‘buy’ (with cash, arms and South African diplomatic support) a preferential operating licence in Iran.
For me the link between this issue, the fact that the South African government had appeared to fold to US sanctions demands on oil imports from Iran (or at least to flip-flop confusingly) and the leaked documentation from close to Kgalema Motlanthe seeming to prove attempts to get government support for Bell Helicopter deliveries to Iran – potentially hurting his (Motlanthe’s) presidential ambitions – was a series of stories that raised the spectre of US secret power working it’s powerful and implacable will.
It looks like the Bell Helicopter with SA government support stuff was established:
Through access to recordings and confidential documents – understood to have also been obtained and analysed by US intelligence agencies
according to the Sunday Times, but the documents that informed the Turkcell case appear to have been leaked by a disgruntled former MTN manager and South Africa’s flip-flop on oil could be based purely on the extreme nature of proposed US punishment for those who break sanctions against Iran.
So the sexy story of US spies fiddling in our politics doesn’t have a good evidential basis (although I have no doubt that US secret power is exercised every day throughout the world … perhaps not always with German-like efficiency and certainly with lots of unintended consequences.)
The MTN story … and South African oil imports … still has a way to run, so watch this space.
Malema summarily suspeded, Top Six unity press conference, Cyril for president and the interminable Mangaung contest.
I don’t know about you, but I am royally gatvol of press reports about ANC internecine struggles … during the course of the week this is what I had to say about various strands of this interminable story:
First I looked at City Press going out on a limb with contending ANC factional lists for Mangaung… most interestingly putting Cyril Ramaphosa on both the pro-Zuma and the pro-Motlanthe lists … to become president of South Africa in 2014!
“You read right. Not ANC president, and not in 2012 … the Mangaung conference looks sewn up in favour of President Zuma, but even his supporters are starting to point to Ramaphosa as president, saying the billionaire businessman will do a better job of running the country” (from City Press).
I can’t assess the probability of a Ramaphosa presidency … but we can only hope.
I also had to comment to journalists over last weekend about a potential run by Mathews Phosa, essentially as a stalking horse and test marketing campaign for Kgalema Motlanthe. He (Phosa) has no prospects of slipping in himself, but both he and Motlanthe have been seen to be standing firm with their ANC Youth League allies over the last week and it is not inconceivable that they will have worked out a tag-team strategy between them.
Later in the week came the summary suspension of Julius Malema about which I said:
Julius Malema was yesterday suspended with immediate effect from the ANC and from participating in any way in the organisation’s activities or the activities of the Youth League. While this particular suspension is temporary, several different strands of disciplinary action against Malema make the implementation of a full suspension (lasting at least 3 years) inevitable.In preparation for the Malema suspension the ‘Top Six’ of the ANC held a joint press conference to present a united front to condemn “bickering and negative lobbying” in the ruling party. Of particular concern was the recent incident in which Deputy President Kgalema Motlanthe was invited to address and ANCYL rally where he found himself “in compromising situations of being implicated in statements where ANC leadership is denigrated and insulted” (that all comes from official ANC press statements.)Behind the show of unity are two broad camps, with President Jacob Zuma, Secretary General Gwede Mantashe and National Chairperson Baleka Mbete broadly backing Zuma’s re-election at Mangaumg in December; and Treasurer General Mathews Phosa, Deputy Secretary General Thandi Modise and Deputy President Kgalema Motlanthe having consistently been much closer to Julius Malema and long assumed to back a leadership slate that would be headed by Kgalema Motlanthe and might include Tokyo Sexwale.I do not expect the noise generated by the internecine struggle to die down until Mangaung itself. At this stage the Zuma camp is in an extremely strong position and this is the light in which the suspension of Malema needs to be seen.
I did a whole lot more radio interviews and bits and pieces about all of this … but I am becoming unspeakably bored with the whole issue. I think the ANC Top Six press conference was an attempt to get the focus onto the policy discussion documents and away from the draining and fracturing internecine squabbles. Can’t help but feel that might be a good idea.
Zimbabwe and Eddie Cross
The most interesting story of my week came about as a result of the consulting work I do for Religare Noah Capital Markets (Pty) Ltd, which is a member of the JSE and an authorised Financial Services Provider. Religare Noah brings Eddie Cross (Zimbabwe member of parliament for Bulawayo South, economist and Movement for Democratic Change Policy Coordinator General) to speak to, especially, mining and metals investors about once a year and I had a chance to listen in on his input.
Basically Eddie Cross reckons that by October this year Zimbabwe will have undergone a fundamental transformation and that our northern neighbour will be well on the path to recovery – politically and economically – by then.
It is a huge story, but obviously the details are bespoke to Noah Religare and its clients. From my perspective I have known Eddie Cross to err on the side of being too positive and upbeat about Zimbabwe (as I have been … consistently calling the bottom for almost ten years … embarrassing, I know) but I was convinced that a combination of SADC unanimity and strong G8 backing … and the fact that Zanu-PF is out of options and fatally riven with factions, means that change is more likely than it has been in years. An endless stalemate is still a possiblity and more catastrophic scenarios, with the continued assasination of central players (like that of General Solomon Majuru) are options … but there are grounds for cautioius optimism.
I hope you have a restful long weekend … and a really good Friday …
Arrived late last night in New York from London (and Edinburgh and Frankfurt) and the lag means I am only going to want to fall asleep at exactly the time it will be most unsuitable to do so.
I have been travelling (for Indian owned Religare Capital Markets, where I have a new berth) with the excellent Michael Kavanagh who is a mining and metals specialists. We have a story which interestingly balances the South African political risk (especially associated with nationalisation) and the long-term bullish outlook for platinum. We are half way through a global tour talking to fund managers who specialise in investing either in mining stocks or emerging markets … or both.
South Africans at the point of weeping and pulling their hair out because of the latest ANC Youth League posture, or the newest tender scandal or Jacob Zuma’s increasingly hopeless grasp on the complexities need to spend a little time with people whose job it is to compare South Africa as an investment destination with its peers.
Oh yes, they worry faintly about Julius Malema’s antics but their universe of comparison is huge and diverse … and if the worst comes to the worst the money they manage can shift very easily and early.
(Our parochialism causes us to believe) we have no-one with whom to compare our populists, gangsters, thugs and incompetents.
Trust me (or rather trust the fund managers with whom I have been speaking), ours are no worse than the equivalents in Russia, Brazil, India, China … and a host of similar investment destinations between which the money flicks and flitters.
One of my slides that might not charm a domestic audience causes nothing more than a wry smile here. This is par for the course for investors who concentrate on global emerging markets; some light relief before going back to worrying about whether Israel is going to bomb the Iranian nuclear fuels development programme or not.
We might as well smile – both because we are not as bad as we could be, but also because when you look further than the grotesque, our earnestness is almost sweet and crazy … to my mind, anyway.
I am clicking “Publish” in a rush … I suspect I will come to regret this later.
The popular mobilisations in Tunisia, Egypt and a swath of authoritarian North African and Middle Eastern states are interesting and important for more reasons than can be named, let alone examined, here.
But the aspects that have fascinated me are the over excited “I told you so!” claims of pundits, politicians and much of the Twitterati.
And not just the assertion that they had this right all along, but that they somehow understand the clattering Nasserite dominoes better than anyone and would just like to point out that it’s coming to get you. Yes, you (insert name of political opponent here), the revolution is coming for you.
There are literally hundreds of “takes on the crisis” I would like to poke fun at and take to task over this absurd conceit, but there is one I will look at (only slightly) more seriously.
Blunt Blade’s Bollocks
Blade Nzimande takes George Galloway’s excellent communist tirade in his column in the Morning Star (read it, it is also bollocks and brutal and crass but has enough thought and truth in it to warrant a second look) and turns it into the obscure and rambling “Tunisia and Egypt: The deepening crisis of US imperialism and neo-liberalism“.
Where are the South African communists of yore who could always be relied upon to lift the veil, expose the skull beneath the skin and see the ape within the man? Oh yes, they are all dead or helping run the Department of Transport or become bloated and insecure plutocrats … hmm, is that everyone?
Blade has it that Tunisia and Egypt are manifestations of a series of crises in capitalism “and its contemporary neo-liberal ideology”.
In short (in as far as I can understand Nzimande) the USA as the global representative of the corporate/capitalist machine has fostered dictatorships in the Arab world because they have agreed to leave the USA’s good friend Israel in peace.
So far so good, but then things start to unravel. Political upheaval in these Arab and North African countries sets back the USA’s task to reproduce the conditions of capitalist accumulation – through an amazingly complex web of dialectical causality. Thusly, the selling of upsized McDonald’s meals to the American guest workers rebuilding (if they work for Haliburton) and de/restabilising (if they work for Blackwater USA) any countries the US has recently invaded is threatened, because democratic governments are more likely to take a hard line on Israel … eh … oh goodness, there goes the thread.
You cannot successfully characterise Tunisia and Egypt as “crises of capitalism” unless you take an amazingly complex and interlinked world and reduce it to a childish little model that even the crudest Marxists would reject as ‘reductive’ and ‘over-deterministic’.
If the term “capitalism” means the totality of international relations between states, global trade, the activities of local and international corporations and the shaping effects of culture, history and technology, then it is less than useless to characterise Tunisia and Egypt as “crises of capitalism”.
If the term “capitalism” refers (as I suspect it does, when used by Nzimande) to the secret set of rules in a secret club of greedy Americans who seek to control the world to protect and deepen their wealth, then I am sorry, but you can’t really be expected to be engaged with.
There are powerful and organised interests at play in North Africa and the Middle East and only a fool would not look to the USA for the sources of some of those forces. But there is also chaotic human activity and chance and rapidly unwinding and reforming complex systems that are part of what is happening and the blunt scalpel of Blade Nzimande’s theory takes us nowhere.
I would still recommend Galloway’s piece (as more insightful and the source of any interesting thoughts in Nzimande’s words on the subject) because part of what is happening in the Middle-East and North Africa is the unravelling of another mystifying US strategy to define, protect and advance its “national interests”.
What I wish the communists would give more attention to is not the greedy and rapacious aspects of US imperialism, but rather how it is often profoundly misconceived and poorly executed.
In my view human society should not be conceived of as “shaped” by particular forces or of being set on a certain “trajectory”. The totality of human existence is not an object (plastic and/or in motion). The totality of human existence – including the bits of it in Tunisia and Egypt – must be conceived of as a system so complex that making predictive statements is not hugely useful. Also, attempting to reduce the complexity to make it more understandable is a worthwhile endeavour only if undertaken with extreme caution and care. Cooking it up as proof that your side is winning adds no real value.
In as far as the statement: “what is happening in the Arab world is a failure of US imperialism” is true, I suspect the reason is that successive US administrations have misconceived both the nature of history (as has Nzimande) and the nature of their own interests – not an error Nzimande appears obviously to have made.
Jeremy Cronin’s criticism of Cosatu’s recent hosting of a “Civil Society Conference” is impossible to understand without understanding his – and the SACP’s – assumptions about the world and South Africa in November 2010.
Cronin’s premise is that “an enemy” is attempting to make the public debate about the future of South Africa focus on minor issues where “the enemy” believes it can score a victory over the ‘progressive forces’ (of which Cronin assumes he and his organisation and his government are a part).
Cronin and the SACP accept some version of the following as a true and accurate reflection of reality (although Cronin himself would probably not phrase things so crudely, mechanistically and deterministically, it amounts to the same story):
Global capitalism and its local allies are securing their ability to continue to accumulate wealth
The bad guys in Cronin’s universe are a complicated (and brilliantly disguised) set of global business interests linked to and by the interests of powerful Western countries, especially the USA and the UK. What this enemy wants and needs is a world in which it can make loads and loads of money – especially by paying the lowest possible wages and taking resources and wealth from the Third World and packing these tightly around themselves in the playgrounds and fortresses of the First World.
Any change in any society that puts checks and balances on its ability to make money must be opposed – destroyed even before it takes root. Thus, thoroughgoing transformation of South Africa would strengthen the hand of the poor and dispossessed relative the the global capitalist/imperialist elite and must, therefore, be stopped.
Global capital/imperialism are constrained from arguing directly in favour of the oppressive political systems and unequal economic arrangements required to support their ability to extract wealth.
Instead they weaken the existing popular governments in the Third World, encourage the spread of corruption and (crucially for our purposes here) divert real debates about change that would benefit the poor and marginalised into light-weight debates about the individual rights and freedoms of the small group of citizens who have moved on from being concerned about the basic conditions of survival. And they do this by hoodwinking essentially good people and organisations who have a weak understanding of the world.
If this is the enemy, who’s on Cronin’s side?
In this version of the universe the African National Congress, the South African Communist Party and the Congress of South African Trade Unions are the structural expressions of ordinary people’s struggles to be free and fed.
Because Cronin is constructing this version of the world wearing his South African Communist Party beret, we must understand that Cronin assumes himself and his organisation to be part of a long-term plan that will overthrow the global yoke of capitalism and imperialism and construct a society based on human imperatives other than profit.
So what’s wrong with that?
Communists like Jeremy Cronin are not misguided in fearing and distrusting global corporations of private enterprise. Left to their own devices humans will extract as much from each other – or from groups other than the group to which they feel they belong – as is possible.
They will take until they are stopped. This is reflected in every business cycle and it is reflected in every attempt to re-regulate markets after bubbles (always caused by a feeding frenzy) have burst.
Additionally big global corporations will spend billions of dollars sucking up to politicians especially in the most powerful nations on earth – or more directly manipulating the political process.
However, there are two significant things wrong with Jeremy Cronin’s (and the SACP’s) version of the world:
Firstly, the communists’ (and all tight party organisations and religious groups’) vision is obscured by their need to see the world as completely structured by two big gangs that are at war – the white hats and the black hats, the good and the evil, the oppressor and the victims.
There are more complex political choices to make than just to pick a side and back it to the hilt and defend its doctrines against all comers.
Global markets and trade and international relations are structured by hugely complex forces, not the least of which are government and supra-governmental organisations attempting to regulate various forms of behaviour. i.e democratic political processes attempting to subdue, moderate and direct the functioning of human fear and greed.
“Picking sides” in such a complex world is no easy matter.
Secondly, the communists fail to see that they and their organisations are subject to the same raging impulses of greed and terror that structure global capitalism – in fact they are structured into it, (only subject to no shareholder and less accountable and regulated than your standard global business).
The conference that Cronin criticises was precisely an attempt to discuss the best ways to regulate those impulses because they appear to have become the dominant impulses within government and the ruling party.
It is fine for Cronin to dispute this, but it is not fine for him to argue that his allies accept the functioning of criminal greed in his government and organisation because his government and organisation is struggling to combat these matters at a higher level.
We do not live in a simple world. It is my belief that the enemy is not out there in his serried ranks on the plains, he is in here with us, in our homes, in our families and in our beds. The enemy is right inside us, in our own hearts and in our own heads.
Until we realise this our best politicians will continue this Quixotic tilting at windmills.
No-one can take serious issue with the leopard for pouncing down on the neck of a wayward sheep and dragging the carcass back up the rocky outcrop to her cubs for a leisurely feed. It’s what leopards do.
Engaging the leopard in any special pleading about the benefits of keeping this particular sheep alive is, well, it’s just silly, isn’t it?
The gathering wave of strikes means the scent of blood is thick in the air and Cosatu’s haunches are bunching and its tail is twitching.
The trade union federation is sniffing the scent of blood. As the strike season gains momentum the coincidence with the Fifa World Cup is causing Sipho and Sally Normal deep anxiety.
“How can Cosatu hold the World Cup to ransom?” I hear our good citizens gasp.
But the real question should be: ‘how could Cosatu not seize this once in a lifetime opportunity?’
The trade union movement has leverage right now – and for a limited time only – like it has never had before.
Our politicians have inevitably embedded themselves with the Fifa invasion – with about as much moral fortitude as those journalists who embed themselves with superior invaders in other kinds of wars.
Cosatu member unions already had the extra leverage they derived from having backed the right gang in the Polokwane Putsch, but it is the potential to disrupt the Fifa World Cup that gives its voice a new continent cracking resonance.
You want a settlement three times the inflation rate? You’ve got it, baby - just don’t take the focus away from a moment as potentially rich as that perfect Zidane head-butt.
When management and unions stare each other down, a thousand considerations come into play – and while much hinges on the price of the package that will be paid for labour this is not the only consideration.
Management might accept a higher settlement if labour agrees to lock in an acceptable rate of increase in the years ahead – and vice versa. Or the parties can shift bits of the package around so that either management or labour feel that they are getting a better deal.
But there are other and more complicated influences on the bargaining process and one of them consists of getting a fat guy to lean on the other side for you.
If this was the USA 70 years ago organised crime might have lent a hand to one side or another, depending on the interests of some business oligarch, a connected Senator or a union boss playing the field. In South Africa the fat guy is the state and for a variety of reasons he is likely to lean on management and business owners.
When striking Transnet workers marched on parliament last week to insist that Minister S’bu Ndebele back their demands, the politicians sent Mawethu Vilana, a former Cosatu researcher out to speak to the angry workers. This from The Sowetan
Vilana said the government took the strike very seriously and that Deputy Transport Minister Jeremy Cronin and Deputy Public Enterprises Minister Enoch Godongwana were “involved” in trying to find a resolution.
The strike against Transnet appears to be close to resolution, but a larger national strike against the electricity price increase is gathering its skirts in the wings.
Cosatu is led by the kind of people whose instincts are to think of Fifa and the astonishingly named Sepp Blatter as just another gang peddling products that ensnare the user with false promises of bliss. But Cosatu also represents a constituency that loves the Beautiful Game and like a small boy is having to sit on its hands it is so excited about the coming festivities.
So Cosatu is not without limits on its behaviour and nor are its member unions. Cosatu has increasingly failed in the last several years to win over the “ordinary citizen” or ‘the middle ground’ when its strikes have spilled over into public protests. Just one too many image of groups of fat people dancing down a road with sticks, turning over rubbish bins and breaking shop windows has meant that anyone who is not a Cosatu member is less likely to stand as firm as those fabled Apartheid oppressed communities that stopped buying Fatti’s and Moni’s pasta to support the brave workers and their leaders who eventually went on to form Cosatu and drive the revolution itself.
The heroes always live long ago and their legend gleams more with time. But it is difficult to imagine a world in which Cosatu’s leveraging the World Cup for narrow financial gain is celebrated as a blow struck for transformation and liberation.
But in the same breath it is important to remind ourselves that Cosatu is just doing what it must do. It’s purpose is to ruthlessly fight for the advantage of its members over both the vested interests of the powerful, the collective interests of the nation and/or the desperate interests of the weak and downtrodden. In truth, the leopard really has no choice and cannot change its spots.
Could IBM, Fujitsu, Ford, General Motors , Rheinmetall and Daimler be guilty of “knowing participation in and/or aiding and abetting of the crimes of apartheid; extrajudicial killing; torture; prolonged unlawful detention; and cruel, inhuman and degrading treatment”?
Should they be tried for this crime in a US federal court?
If they are found guilty should they jointly pay billions of dollars to a group of black South Africans who have brought the class action suit under the peculiarly named Alien Tort Claims Act in the New York federal court?
Here is a copy of the ‘Second Amended Complaint’ including a list of plaintiffs and defendants that is available on the Khulumani Support Group (an Apartheid victims support organisation) website. It spells out all the ways in which the plaintiffs believe each company or category of company became guilty of a crime by bolstering, arming or funding the Apartheid regime. Note that since this time the list of defendants has been narrowed to those mentioned in the first paragraph of this post.
An interesting aspect of this fascinating drama is that Thabo Mbeki’s government openly opposed this case on the grounds:
- it threatened South Africa’s sovereignty to try such a matter in a US court, especially because the much praised domestic negotiation had agreed that the Truth and Reconciliation Commission was the binding forum and chosen process;
- it would discourage foreign investment.
Jacob Zuma, on the other hand, has removed government’s objections to the process and last year had Justice Minister Jeff Radebe write to the American court and tell it the South African government believed the US court to be “the appropriate” place in which to resolve the matter.
The Zuma regime was surprisingly joined by the Obama regime in endorsing the US court as the appropriate place for the motion to proceed. The amicus curiae brief the US government sent to the court is a useful summary of the facts of an extremely complicated matter and can be read in full here - I found the link on Simon Barber’s excellent “American Notes” blog.
The go-ahead for the US court to hear the matter from both the US and the South African government is based primarily on the fact that while amnesty would have been the result of full participation in the TRC process, the defendants – and, in fact, most businesses operating in Apartheid South Africa – never participated in the process. Thus there was relatively minimal disclosure (at the TRC anyway) of business’ dealings with the Apartheid regime and hence no amnesty.
The founding myth of the Rainbow Nation is that we have dealt with the past and go into the future with knowledge and forgiveness. The case in the US federal court challenges this assumption and asks some extremely difficult questions that have consequences way beyond South Africa.
Here are some of the questions as I see them:
- The TRC process failed in a number of ways; will cases like this one help redress the failure, or will they undo the few successes – with regard to reconciliation and forgiveness – the TRC did have?
- The TRC process created a collective victim group and a collective perpetrator group in a way that allowed single people (including legal persons) to avoid carrying the can or receiving any significant compensation for Apartheid human rights abuses. Won’t legal processes with more clearly defined defendants and plaintiffs redress this?
- Won’t raking the muck of the past continue to cause conflict and division, especially between black and white South Africans in the present and the future?
- How does a publicly owned company that has operations across the globe assess risk associated with politics in the countries in which it operates – especially when oppressive governments are its direct clients and customers? Recent examples might include Nestle in Zimbabwe and Google in China.
- If the domestic government is not a customer, it still sets a regulatory environment that might make the company guilty of an offence if it complies with the law. Yes?
- Is disengagement from a particular country dominated by an oppressive government always the right approach?
- What does this say for domestic businesses?
- Should aspirant black business men and women have refused to accumulate capital in Apartheid South Africa – except as criminals?
The list of questions could probably go on ad-infinitum, but that will do as a start.
One thing you may have noticed I left off was the Mbeki government’s first objection based on the fact that such cases might deter foreign investment. Such cases might place more onerous due diligence requirements on any company that operates across borders and in countries where governments might become guilty of human rights abuses. No company is specifically going to punish an ANC led, democratic South Africa if a US court finds it culpable of bolstering the previous NP led Apartheid South Africa. It’s not logical and it is not in the company’s interests.
Here’s FDR in an interesting quote I dug up. It’s from about 1935 – in the lead-up to his re-election in 1936 – and it is made to a journalist from the Hearst organisation.
This gives one a sense of how threatening was the Great Depression - to the very system of capitalist accumulation itself. This is, basically, FDR trying to save “the American way of life” from a real and significant challenge by socialists of various hues.
The Great Recession and particularly the excesses in the financial markets that helped bring it on, has strengthened similar force in our world.
The ANC and its alliance partners were ahead of the curve (as bankers like to say) on the family of ideas that FDR came to espouse: more equality, more regulations, more state, more taxation, more protection. The difference, though, is that FDR was trying to save capitalism from its own excesses. For Cosatu and the SACP, at least, they still claim to hope to use the excesses of capitalism against itself.
I remain convinced that the real power in The Alliance is the emerging and burgeoning ’capitalist’ elite and the ideas of this class are fundamentally similar to FDR’s and fundamentally at odds with the views the leadership of the SACP and Cosatu claim to espouse.
(Note: My cute use of the word “claim” when referring to the views of some Cosatu and the SACP leaders is a result of the fact that I find it impossible to believe that leaders of the ilk of Blade Nzimande genuinely hope for the demise of capitalism when, in fact, they are becoming, in this historical moment and in this country, its main beneficiaries.)
Paul Krugman tilts at the USA citizen’s default hostility to government. He argues that on health care policy and on banking regulation it is more government, not less, that is needed. Does the same apply in the South African case? I think the issues are significantly different, with the first task in South Africa being to fix dysfunctional government. However, in the USA as in South Africa, it is clear that left to its own devices ‘the market’ is neither going to regulate itself nor solve the problems of inequality and lack of access to health care.
This was published in the New York Times on August 23.
All the President’s Zombies
By PAUL KRUGMAN
The debate over the “public option” in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives, however, has been the extent to which opponents of greater choice in health care have gained traction — in Congress, if not with the broader public — simply by repeating, over and over again, that the public option would be, horrors, a government program.
Washington, it seems, is still ruled by Reaganism — by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good.
Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.
Let’s talk for a moment about why the age of Reagan should be over.
First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the “magic of the marketplace” were supposed to lead to dramatically better outcomes for everyone? Well, it didn’t happen.
To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years.
Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.
And then there’s the small matter of the worst recession since the 1930s.
There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came.
“We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again.
Or did we? The astonishing thing about the current political scene is the extent to which nothing has changed.
The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance — which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.
But it’s much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation — this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.
So why won’t these zombie ideas die?
Part of the answer is that there’s a lot of money behind them. “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, I would add, his campaign contributions — “depend upon his not understanding it.” In particular, vast amounts of insurance industry money have been flowing to obstructionist Democrats like Mr. Nelson and Senator Max Baucus, whose Gang of Six negotiations have been a crucial roadblock to legislation.
But some of the blame also must rest with President Obama, who famously praised Reagan during the Democratic primary, and hasn’t used the bully pulpit to confront government-is-bad fundamentalism. That’s ironic, in a way, since a large part of what made Reagan so effective, for better or for worse, was the fact that he sought to change America’s thinking as well as its tax code.
How will this all work out? I don’t know. But it’s hard to avoid the sense that a crucial opportunity is being missed, that we’re at what should be a turning point but are failing to make the turn
- the outrage at the Munich Olympics in the summer of 1974;
- the Champions League Twenty20 cricket in Mumbai last year;
- the boycott of the Moscow Olympics in 1980;
- bomb threats at the Grand National in 1997;
- the Sri Lankan marathon massacre in 2008;
- the extensive security fears at the Ryder Cup post the September 11 attacks and
- the 2002 car bomb near Madrid’s main stadium just before the kick-off of Real Madrid’s Champions League semi-final against Barcelona.
The Fifa World Cup kicks off in 294 days, 14 hours zero minutes and 26 seconds as I begin to write this and it is time to ask: what are the big and scary things that could happen at the soccer?
Public and private fears have included:
- that we scare the tourists with our crime and grime,
- that contractors fail to finish the stadiums/hotels/roads on time and,
- that Bafana Bafana collapses in a heap.
I have dealt with these common-or-garden variety fears and concerns here and Bafana has encouraged with its sterling performance at the Confederations Cup. But what about the really big and really scary stuff?
The Fifa World Cup becomes a focus of big security concerns for three basic reasons:
Firstly, every conceivable form of mass communication is present or focused on the event. Make a noise (grind an axe) in or around the event and all that capacity is at your disposal – to spread your happy ideas to the rest of the waiting world. Talk about ambush marketing ….
Secondly, the event has significant economic consequences as well as prestige and sentimental power over South Africans and their government and businesses. Real threats of disruption will get the South African government, business community and public working towards resolving the matter, including by giving in to/forcing others to give in to, those forces.
Thirdly, the country will be full of citizens and dignitaries from throughout the world. The World Cup is an excellent time for conflicts
- within other countries,
- between other countries and/or
- those involving global powers and ideologies
to bleed all over the host country.
Here is a non-exhaustive list of those who might try and piggy-back the soccer – some entirely legitimately, others with darker and more evil intent.
Organised labour will be tempted to use the Fifa World Cup as leverage to advance its agenda. NUM and others have already used this strategy to force a very tidy settlement of 12% increase for the 70 000 striking workers at 5 of the ten stadium building projects in July. Did someone lean on the employer to settle quickly - and therefore at a higher level than was realistic for the projects and the economy? Probably.
Organised labour does not have a completely free hand (in a strategic sense) to hold the World Cup hostage in support of its various demands and interests. Cosatu is in an alliance with the governing ANC and its own members are as enamoured of (with) the World Cup as the rest of South Africa. For Cosatu the trick is going to be making as much out of the opportunity as possible without alienating government or the public.
The same is not true for taxi operators and owners. There are 150 000 minibus taxi’s in South Africa and these account for most public transport in the country (an astonishingly high 65% ). Drivers and owners are a powerful political and economic force who have demonstrated themselves able to decisively disrupt (I say split the danged infinitive!) the normal functioning of the country – through blockades and other forms of physical force and intimidation. The government is attempting to regulate and recapitalise the industry and implement the Bus Rapid Transit system (BRT) – and impose the traffic code on the famously unlawful drivers and taxis. The industry is preparing to fight government on a range of issues – making this threat scenario more likely.
This is a Wild West industry – and also happens to be the true heart of entrepreneurship, creativity and drive of the emerging business classes (not those sharp and useless Slick Willies taking turns on equity through political connectivity and BEE charters). But the industry players are hard core: armed and dangerous and bristling against attempts to control or sideline them or their belligerent organisations. They will hold the World Cup hostage if they can.
The functionaries of conflicts involving various African causes and groups but also Al Qaeda, Basque separatism, Afghanistan, Israel, Iran, India/Pakistan, the USA/a-host-of-little-enemies, the Balkans, Russian separatism and many others must all be looking at the Word Cup through a “threats and opportunities” prism.
Those responsible for security at the tournament are likely to be sourcing every bit of intelligence they can; trying to catch plans at an early stage and forestall attacks. They are obviously being supported (and second-guessed and bossed around) by the major intelligence agencies from around the world in this regard.
They will also be wondering about possible targets and how to protect them. A high profile attack à la September 11 is no longer as easy for those who might wish to carry it out, but smaller, more loosely affiliated attacks are still a real possibility.
South Africa is already an important investment destination for both organised and the more chaotic forms of criminality. We’ve got the drug/people/wildlife/plant/arms/toxic waste smugglers, the extortion rackets, the robbers, internet scammers, the Ponzi artists, the assassins, the industrial spies and identity theft rings ….. the list could go on for megabytes – and we have their representative organisations and corporations.
The World Cup is an important time and place for them. Lots of people travelling from different countries and then gathered in one place provide various kinds of logistic and market opportunities for organised criminality. The understandable obsession with protecting tourists from visible crime will divert resources from other areas (like intelligence and financial monitoring). The also understandable obsession with international terrorism will take the heat off the organised criminals and give them more space to operate.
This is not so much a “threat” issue as an inevitable anxiety. A whole range of political and economic risk fears are focusing on the “post-2010 hangover” period:
- the capex programme will slow,
- the bills will come due,
- there will be nothing to look forward to …
These fears are essentially sentimental and, frankly:
I hold it true, whate’er befall;
I feel it, when I sorrow most;
‘Tis better to have loved and lost
Than never to have loved at all.
( From Alfred Lord Tennyson’s poem In Memoriam:27, 1850)I wrote this entry in response to an interesting discussion I had with my friend Jenni – Thanks Jen, keep the ideas coming.
Let’s see how that plays…
The Voice of America says US Secretary of State, Hilary Clinton, will, in her meeting with ”senior South African officials” in Pretoria today:
push South Africa to do more to counter embattled President Robert Mugabe’s negative effect on the Zimbabwe reform process.
South Africa under Thabo Mbeki would have bridled and gritted its teeth at the implied imperialist bullying. Word might have gone out that the USA was seeking regime change in South Africa through a delicate and implacable process of setting Thabo Mbeki up for failure, by isolating the South Africans from the African fraternity, by undermining sovereignty …. oh, whatever! It was always impossible to understand Mbeki’s coded warnings about the shenanigans of the imperialists.
The point is, I suppose, Thabo Mbeki’s administration was deeply suspicious of the USA, the UK and of European intentions and actions in Southern Africa. The Movement for Democratic Change in Zimbabwe was constantly hinted to be a front for various combinations of imperialists interests, as were the Kroll trained Scorpions of the National Prosecuting Authority.
It would be naive to imagine that the CIA and MI5 do not have significant interests and intentions in Southern Africa – and some capacity to work towards their objectives. The subject of a later post will be the rise of intelligence services in the post 9/11 world in which the cyberuniverse contains endless information lodes that are both deposited and mined by these intelligence agencies.
But seriously, are we to think of whatever Hilary Clinton says today about South Africa and Zimbabwe and the role of Mad Bob and the MDC as part of a grand imperialist plan for our region?
The first answer is “no” because the USA and their intelligence services have demonstrated that 1.) they have bigger problems to worry about and Southern Africa without oil and without Muslim fundamentalists does not warrant that kind of attention; 2.) their intelligence capacity and ability to manipulate world affairs has been shown to be less formidable than one might have expected – as revealed by that country’s endless bungling in the Middle-East.
The second answer is “yes’ (to the question: does the USA have a plan for this region?). As the world’s policeman the USA is obliged to have an opinion and a strategy about everything. Zimbabwe, while not very high on the list of concerns and objectives of US foreign policy does touch on several strands of US concern in the sub-continent. South Africa represents a major chunk of Africa’s GDP, Angola, with significant US oil interests, has the potential to be drawn into Zimbabwean affairs, Zimbabwe itself sits on the greatest unexploited Platinum reserves and China has a significant and growing interest in, and relationship with, the region. US foreign policy must ultimately focus on the long term and the long term is all about the containment of China.
But at another level it can be unproductive to comb everything that Clinton says today or fails to say for evidence of, and guides to, the deep strategic thinking of the Great Dragon. In diplomacy and the world of the spook the search for hidden meaning and intentions can become self-fulfilling. Clinton is settling into her office and Obama is still carving his role in the world and in Africa. These are not simple or obvious matters and there is undoubtedly a degree of exploration that still needs to take place before “grand strategies” can be unfurled.
I await further reports of her meeting with interest.