… probably Johnny Walker Blue Label …

The leadership of the African National Congress are feeling quite satisfied with themselves – and they have some justification.

They have finessed both the SARB governorship and the transition at the Treasury and everyone, apparently, feels like a winner. For now.

The two positions about which the financial markets were most concerned are the same positions that came under most serious pressure from the left and Cosatu.

Trevor Manuel as Minister of Finance was the focus (along with Thabo Mbeki) of the attack on the Growth Employment and Redistribution macro-economic policy. Tito Mboweni was the focus of the attack on inflation targeting.

Within a few short months the Zuma administration has appeased the unions and the communists by shifting/shafting Manuel and Mboweni; and they have appeased the financial markets by appointing individuals likely to emphasise continuity and “market friendly” policies.

The finesse shows the depth of skills and ‘people of good reputation’ the new management can call upon; and shows their calm and unhurried gravitas. But it is also just too clever by half. At some point the Zuma administration is going to have to reveal its own colours. When they do, Cosatu and its ideological partners are all going to be disappointed.

On one side of the great divide of ideology and policy (the divide the Zuma administration hopes to ‘straddle’ – so to speak) is the family of ideas generally thought of as “socialist”.

Cosatu and the South African Communist Party have declared against inflation-targeting and privatisation and for nationalisation of the mines, increased state expenditure (preparedness to maintain higher budget deficits), lower interest rates, more assertive tax policy – including higher taxes on the wealthy and companies, greater tariff protection for vulnerable industry and more directed industrial policy.

Up against these views is the more diffuse, but infinitely more powerful, force that is the aggregation of the actions of those who buy and sell shares in South African companies, debt of the South African government and South African corporations and those who decide to invest or disinvest directly in the South African economy more generally. The set of ideas that tend to characterise this pole includes the strict protection of property rights, low inflation, low government borrowing, minimal state interference in the economy, a low tax regime, open markets – including labour markets – and privatisation.

So which side does the new administration (of the party, government and state) side with?

It is crucial to understand that these poles are not, in fact, the same “category of thing”. On the one hand are actual organisations and parts of organisations (Cosatu, the SACP and the ANC’s own left flank) and their ideologies and policy preferences – ultimately the set of interests they represent.

But the other pole is the global capital market; the ebb and flow of wealth and money and investment. This pole is not an organisation or a set of policy formulations. It is a system for aggregating the way people behave. It is immune to appeal or argument. It has no manifesto – except to favour security of ownership and the freedom of its own movement

When the draft Mining Charter (government proposals for BEE in the mining sector) leaked into the public domain in 2002 fund managers around the world sold R54bn worth of South African mining stocks which took 10% off the resource index in a matter of hours. It is only in the fevered imagination of infantile leftists that this was a co-ordinated and caucused political action by “monopoly capital”. Instead, it was the the cold and implacable logic of aggregated human fear and greed – that’s all.

Looking at the appointments of Marcus and Gordhan more closely something that should have been obvious emerges: they do not represent a change in direction, but they do represent historical distance from, or hostility to, Mbeki.

Pravin Gordhan was key to Operation Vula – Jacob Zuma was one of only three top ANC leaders who even knew of that overambitious adventure – and most of that crew fell foul of Mbeki after 1999.

Mbeki – as I understand it; admittedly not perfectly – became irritated by his sense that Marcus lost herself in details and failed to see the bigger picture. This is not a view of Marcus I am propagating, but she was shifted out of Mbeki’s government and into the SARB in 1999.

The Spirit of Polokwane

Polokwane and its famous victories and defeats was never about ideology. It was always about power. The appointments of Gordhan and Marcus strengthen the power and stability of the new management but do nothing to advance a left agenda. Cosatu and the SACP might draw comfort from the appointment of Ebrahim Patel and Rob Davies (to the new Economic Development ministry and Department of Trade and Industry respectively); but it can’t have escaped their notice that those with a “left” mandate are technocrats in undefined or specifically technical positions. No-one from the left is anywhere near real power or any of the security portfolios.

Cosatu, the SACP and those who share their ideological orientation thought Polokwane was an important victory over the “1996 class project“. They have misunderstood. That project was nothing more than the ANC giving obeisance to global capital markets; a kind of lifting of the skirt and tilting of an ankle towards the passing trade. If the Zuma government changes anything it will be to wear a more expensive and revealing dress.

The class base of the ANC is ever more firmly rooted in the emerging political/business elite, whose interests, in turn, are firmly with the traditional preferences of global capital markets. There is almost no difference between the 1996 and 2009 class projects. Cosatu and the SACP have again extended themselves and sent their brightest and best into government and the state in the belief and hope that they can affect the policy outcomes. In the 1990’s they lost successive levels of leadership to government, the state and the realm of fabulous wealth.  There seems little doubt that we are witnessing the start of an almost identical process.

The Alliance is not built on a falsehood. The individuals that make up the leadership of the ANC, Cosatu and the SACP share the hope that they can use their holding of state power to advance the interests of the poorest and most marginalised South Africans. It’s just that those who actually get down to do the job soon learn the limitations on what is possible. The biggest limitation is imposed by the seamlessly integrated and internationalised global capital markets.

Cosatu and the SACP represent the energy and sentiments of where the ANC came from. Business and global capital markets represent the power and reward of where the ANC is going.

Febuary 1997 - a cartoon I commissioned - drawn by a friend - at least it's consistent!

A cartoon I commissioned in Feb 1997 by Cathy Quickfall (thanks Jenni B) – at least I’m  consistent!
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