The world is changing fast and to keep up you need local knowledge with global context.
Treasury spokespersons can distance their Finance Minister Malusi Gigaba from one of his top advisers, Professor Chris Malikane, all they want. The fact remains – he’s a top adviser and no amount of protests about his right to express his private views will wish him away. He informs Gigaba’s thinking. Which is why the review and comparative analysis of his utterances by Dr Anthea Jeffery, Head of Policy Research at the Institute for Race Relations, gives us insight into government’s ruinous intentions. Malikane openly concedes that nationalisation and radical economic transformation will plunge South Africa into crises like Zimbabwe and Venezuela – but says it’s worth it – people just need to be ‘educated’ into acceptance. Jeffery unpacks the socialist/communist cynical use of, (in our case Black), middle classes to achieve a national democratic revolution and outlines our policy cul de sac by describing Venezuela and Zimbabwe. It’s frightening how similar our policies are to their devastating ones. We’re witnessing a fast-closing window of opportunity to get rid of the Zuptoids. How do we do that without leaving the door open for the EFF to implement nationalisation so quickly and brutally our heads will spin? Time for the DA to cosy up even further to the EFF? – Chris Bateman
By Anthea Jeffery*
At a packed meeting organised by the Black First Land First (BFLF) movement over the long weekend, Professor Chris Malikane, adviser to finance minister Malusi Gigaba, called again for radical economic transformation (RET) and the nationalisation of land and key sectors of the economy.
This is much the same message as Malikane put out in April 2017, in an eight-page blueprint for RET, in which he called for the ‘expropriation of white monopoly capitalist establishments such as banks, insurance companies, mines and other monopoly industries’.
At the BFLF conference, Malikane also called for a constitutional amendment to sanction nationalisation. As City Press reports, he added: ‘It’s true that this country will plunge [into crisis] and become like Venezuela and Zimbabwe’. But the pain would be worth it, he implied, which meant that people must be strengthened ‘ideologically and politically’ to withstand it.
This is similar to what Namibia’s President Hage Geingob said last week – that Zimbabwe’s land reform programme had been like ‘a Caesarean section’: ‘very painful’ at the time but fruitful overall.
How much does Malikane matter? When Gigaba was appointed finance minister on 1st April, he immediately roped in Malikane as an economic adviser. But when a media outcry followed, the Treasury stated that Malikane’s views were ‘not necessarily government policy’. It also said that Gigaba would ‘continue to be guided by ANC policies’, and that ‘the nationalisation of banks was not government policy’.
This was an ambiguous response at best, for it suggested that the nationalisation of land and the mines (rather than the banks) might indeed be government policy. In addition, the ANC’s policies are, of course, to pursue a national democratic revolution (NDR) aimed at taking South Africa to a socialist and then communist future. All that Malikane proposes is thus fully in line with the NDR.
Ferial Haffejee, editor of HuffPost SA, was at the BFLF conference where Malikane spoke. As she reports, his calls for nationalisation were enthusiastically applauded by those present. Yet the audience, as Haffejee writes, was not made up of ‘landless peasants’ or the ‘urban working poor’. Rather, it comprised ‘professionals, business owners, students, intellectuals and activists’, most of them well-dressed and seemingly well-heeled.
This shows how astute the ANC has been in identifying ‘the black middle strata’ as ‘a critical resource of the NDR’ and an important part of the ‘motive forces’ helping to advance the revolution. These middle strata might have ‘compradore’ tendencies and be ‘constantly tempted’ (as the ANC puts it) ‘to use corrupt means to advance their personal interests’. They are nevertheless essential to the NDR because of their self-interest in massive redistribution.
These middle strata do not seem to realise that the black working class is the most crucial element in the motive forces – and that the ultimate goal of the NDR is a ‘dictatorship of the proletariat’, in which there will be little room for a middle class of any hue.
Once the black middle strata have helped to destroy the established middle class and the capitalist economy, they in turn are likely to be crushed by the NDR they have helped to foster and legitimate. ‘Useful innocents’ is what Austrian economist Ludwig van Mises might have called them.
If Gigaba didn't like what Chris Malikane said the first time, he'd have dropped him then. The fact that he didn't means he shares his views
— Barney Mthombothi (@mthombothi) April 30, 2017
Will the pain of nationalisation in fact be brief and worthwhile, as Malikane seems to suggest? After land seizures began in Zimbabwe in 2000, the economy collapsed and inflation topped 500 billion per cent at its peak. Unemployment has soared, millions have fled, hunger remains rife, and elections have repeatedly been rigged to retain President Robert Mugabe in power.
In Venezuela the economic fall-out from nationalisation, stricter state controls, and extensive land expropriation was initially masked by high oil prices. But once the oil bonanza ended, the devastating impact started to come through. In 2016, the country’s third year of recession, the economy shrank by 18%. The inflation rate is already close to 700% and could exceed 2000% next year. Food shortages are acute and hunger is growing. Most people are desperate to dislodge President Nicolas Maduro from power, but cannot easily achieve this because the rule of law no longer runs.
The rape of democracy in both Zimbabwe and Venezuela shows once again that secure property rights are vital not only to broad-based prosperity but also to political freedom. In the words of another Austrian economist, Friedrich Hayek, in his well-known book The Road to Serfdom, ‘we need control of the means of production to be divided among many people acting independently, so that nobody has complete power over us’.
What Malikane advocates – and what the NDR is intended to achieve – is, of course, the complete opposite of any such restraint on the ruling party.
Malikane’s weekend speech has undercut the Treasury’s assurances and raised renewed concerns as to why Gigaba values his advice. Increasingly, it seems that Malikane’s strategic role is to strengthen the calls for nationalisation now coming from many quarters. It is also to stigmatise capitalism, isolate the blacks who ‘own farms and aspire to be like white farmers’ (as Malikane puts it), and blame whites and the free market system for the economic malaise that 20 years of gradual NDR implementation has already brought about.
Essentially, Malikane’s role is to help bamboozle the poor, encourage the black middle strata to play their appointed role, and (as Haffejee writes) promote ‘the war of the black working class against white monopoly capital’.
His task is also to distract attention from the hunger, destitution, and political repression that will surely follow on from the nationalisation of the land, the mines, the banks, and other key sectors.
*Dr Anthea Jeffery, Head of Policy Research, IRR