South Africa: Capitalism ensures capture of state

The Guptas are not the only ones enjoying the benefits of having control of South Africa

Over the past few weeks, the terms “state capture” and “corporate capture” have been buzz words in South Africa. It all began when former ANC MP Vytjie Mentor made a comment in which she alleged she had been offered a ministerial position by the Gupta family. It is common knowledge that the latter enjoys close ties to President Jacob Zuma.

Malaika wa Azania

What followed Mentor’s revelation was a litany of similar allegations from various ANC leaders, including the Deputy Minister of Finance Mcebisi Jonas, who levelled similar allegations against the Guptas.

These allegations sparked a national discourse around the issue of state capture, with many claiming the actions of the Gupta family are a clear indication the South African state has now been captured by this family.

There is certainly a serious cause for concern when a family with close ties to a sitting president acts with the kind of impunity with which the Guptas have done and still do.

This is the same family that landed its private jet at a national key point for a private function – one in which the family’s foreign guests did not follow correct customs procedures as every other foreign visitor to the country does. And this is now the same family that calls MPs to its private residence to offer them jobs that only the state president has the constitutional mandate to do.

The ties the Gupta family enjoys with government officials extends far beyond offering them ministerial posts.

According to reports, the Gupta family has previously funded various political parties that constitute our government.

These include the ANC, the DA, the United Democratic Movement, to name a few.

According to the International Monetary Fund, state capture refers to “the efforts of firms to shape the laws, policies, and regulations of the state to their own advantage by providing illicit private gains to public officials”.

It can therefore be argued the political parties that are funded by the Guptas directly or indirectly inform and influence legislation.

They construct policies and laws. In funding them, the Guptas create an enabling environment for the festering of political clientelism, where a state that is supposed to be accountable to its people must first account to its funders. This is one of the ways in which a state is captured.

While I agree the actions of the Gupta family are reflective of state capture, I want to contend that contrary to the dominant narrative, state capture is neither new nor are the Guptas the sole (or even the dominant) players in the capture of the South African state. It was captured at the table of negotiations through what sociologist J Baskin refers to as bargained corporatism. Between 1990 and 1994, negotiation processes known as the Conference for a Democratic South Africa (Codesa) took place with the FW de Klerk government, unbanned liberation movements, the labour movement and various other bodies.

One of the key discussions at these negotiations was the role that the labour movement and trade unions would play in the new dispensation.

A model would have to be adopted which would result in the emergence of institutions and processes through which workers and unions may engage the state and capital to gain varying degrees of control over important economic decisions.

The model adopted was bargained corporatism.

Bargained corporatism refers to the unions engaging the state and capital at macro-economic decision-making level through negotiation.

A crucial feature of corporatism is that public policy becomes the outcome of a bargaining process between state departments and organised interests whose power is such that their co-operation is indispensable if the agreed-upon policies are to be implemented.

While in theory bargained corporatism might have sounded like the best possible model to employ in our new country, in reality it set parameters for state capture.

There are two main reasons why this is the case. Firstly, the very nature of the South African political transition belies the foundation on which our democracy lies. While the negotiated settlement did usher in a democratic dispensation, it did not radically deconstruct the systemic constructs of apartheid dispossession.

This means that we achieved political freedom without economic freedom, which still rests in the hands of white-owned corporates and individuals. The South African government thus has political office but no economic power with which to effect economic transformation.

Secondly, the inherent weaknesses of the trade union and labour movement. These include the fact that like all other organisations, trade unions are prone to the iron law of oligarchy.

Among other things, this leads to union leaders developing a petty bourgeois life-style and social differentiation from their members.

Trotsky takes this further by arguing that union leaders, having acquired authority over their members, are used to assist capitalism in controlling the workers.

They thus become incorporated into the system.

What are the implications of this characterisation of unions and the democratic state, with regards to state capture?

The implication is that a government that is in political office but does not have economic power relies on capital to fund its activities – especially in a developing country like ours, with a very small tax base.

The implication is that a weak trade union and labour movement is ultimately incorporated by capital to a point of being collaborationist with capital. But more than this, the implication is that capital has control of the policy decisions that the state resolves on.

A clear example of this was the Growth, Employment and Redistribution (Gear) policy, which was adopted by our government with the support of capital, amidst protest from the trade union, labour and civil society movements.

Recently, Zuma was pressured to remove Desmond van Rooyen as Finance Minister, and replace him with Pravin Gordhan who is more familiar to the white monopoly capital.

After all, Pravin’s budgets have always ensured that white monopoly capitalism remains in power and is protected and maintained.

The reality of the situation is that the Gupta family is one of several players who have, throughout history, maintained the capture of the South African state. I reject the popular narrative that seeks to suggest the state has always been free and only recently became captured by the Gupta family.

This narrative becomes dangerous as it seeks to present state capture as an individual action rather than the systematic construct that it is. It is also ahistoric and downright impolitic.

In a country that has signed up to bargained corporatism as its model of governance, state capture by capital is inevitable.

In fact, I want to take it further and say that state capture is a feature of capitalist society, where corporates have more resources and therefore more power than the state itself.

It is not as new a phenomenon as analysts want to present it.

In my view, we have not yet begun to have a meaningful debate on state capture. What we claim is a debate on state capture is in fact a “Zuma and the Gupta family are a problem and they must go”.

Such a debate does not recognise that state capture is systematic and historical, and therefore bigger than just one family in Saxonwold.

They are a problem, but they are not the only problem and certainly, not the only ones enjoying the benefits of having control of the Republic of South Africa.

[Malaika Wa Azania is the author of Memoirs of a Born Free: Reflections on the Rainbow Nation. This article was first published: 19 July 2015 on Sunday Independent . Re-posted by with the author’s permission.]


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