Marxist-Leninist ideology

Anti-business, Black economic empowerment (BEE), Black-owned businesses, Buying local, Central planning, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Entrepreneurial space, Job creation and unemployment, Lockdown, Market economy, Marxist-Leninist ideology, Opportunity tax, Preferential procurement, Township enterprises

Ramaphosa’s bold plan (1): Is ‘buying local’ BEE disguised by a face mask?

Johannes Wessels
@johannesEOSA1

If Ramaphosa’s bold plan to restart the economy was a film, the premiere already proved it’s not an ‘out-of-the-box’ blockbuster that will rake in Oscars for economic growth and sustainable job creation. Growth through state-led infrastructure development XXI is a lame sequel fit for an infamous Razzie award.

Like its predecessor – the lengthy National Development Plan – the Economic Reconstruction & Recovery Plan (ERRP) is a sure box office flop.

The ERRP announced by the president after lengthy consultation processes with big business and big labour states “Non-implementation of the ERRP could lead to loss of economic capacity, including collapse of the supply capacity, consumer and business confidence, the labour market and increased vulnerability of the poor. The overall plan aims to mitigate these risks”.

This script suggests its authors live in a make-believe reality: South Africans, whether tax payers or the growing number of unemployed, know consumer and business confidence and employment are not waiting for collapse through the non-implementation of a plan. It has collapsed already and was meticulously crafted by the very same government now purporting to be capable of getting the economy firing on all cylinders again.

There is a hidden sub-text as well: Covid 1 9 was the excuse to gain more arbitrary power and programs to recover from the lockdown devastation are aimed at cementing these arbitrary powers.

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Central planning, Culture and development, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, ENTERPRISE TYPES, Inequality, Job creation and unemployment, Lockdown, Marxist-Leninist ideology, Spontaneous order

Will Cyril be remembered as Nongquase II ? The modern day killing of cattle…

Johannes Wessels
@johannesEOSA1

Just just now (and not “long, long ago!”) there was a man who ordered his people to shut their doors and refrain from going to their places of work. His name: Cyril Matemela Ramaphosa. He told the people of South Africa that there was a way to ensure that the reputedly voracious beast called corona virus would not create havoc in the land.

The Keiskamma Tapestry, Cattle-killing Panel, Detail 3. Copyright Robert Hofmeyr

All his people had to do was to follow the advice of Nongquase as recorded in writing by William Wellington Gqoba who, as teenager, had lived through the infamous cattle killings and the resulting famine amongst the Xhosa:

“Shut yourselves in your huts… In order to survive, you are to use many doors to close each hut, fasten every door tightly, and abstain from witchcraft.”
William W Gqoba: The Cause of the Cattle Killing

Substitute the words “abstain from witchcraft” with the phrase “abstain from going out to work and buy only what we allow you to buy”, and one has the contemporary equivalent of a decision that had decimated the livelihoods of tens of thousands of the Xhosa in the mid 19^th C with a spiralling death peak caused by the resulting famine.

This is how it is happening in real time now. Cyril called together the many-too-many chiefs that form his cabinet. They talked and they talked and they talked. And they consulted with themselves and they consulted among themselves and they consulted again for themselves.

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Anti-business, Central planning, Corruption, Developmental state, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise friendly environment, Expropriation without compensation, Investment/Divestment, Marxist-Leninist ideology, Productive knowledge, Property rights, State Capture

Betting on the “good ANC guys”: Building sand castles in an hourglass

Johannes Wessels
@johannesEOSA1

The perception of numerous commentators and business leaders that South Africans should mobilise behind president Cyril Ramaphosa, Pravin Gordhan and Tito Mboweni to support the “good guys” in the ANC to ensure an economic recovery, is not only simplistic: it is utterly naive.

It is also not new. It is a rehash of the theme of the 1970s when the National Party was assessed as comprising good guys (the verligtes) and bad guys (the verkramptes) with many commentators arguing the case to support the verligtes. The person who eventually took the quantum leap with a definite break with apartheid (F W de Klerk) was not counted amongst the verligtes. He was seen as rather conservative and a natural choice to chair the Ministerial Council for White “Own Affairs”.

Verlig-verkramp focused primarily on how Nationalist MPs were oriented on apartheid. That analysis had no eyes for another fundamental division: The PW Botha approach with the security structures of the military and national intelligence as key players versus those who preferred a civil-oriented approach with parliament in the fulcrum. De Klerk belonged to the latter faction. Botha and the securocrats had commenced talks and interaction with both Nelson Mandela (then in Pollsmoor) and the ANC in exile, but De Klerk was largely uninformed and excluded from these discussions.

Playing whilst the resource base is shrinking…

Verlig-verkramp was an insufficient perspective to detect the person who would make the decisive break with apartheid.

Now, many commentators and business leaders still cling to the hope for action and clear policy direction, contrary to what is happening in reality. The hope that “Ramaphosa knows what is required” is based on viewing the ANC as comprising a “good ANC” and a “bad ANC” and that the good guys will restore the country to a golden growth path. Treasury’s document on economic policy is clung to as a lifebuoy.

The good guys are supposedly led by Ramaphosa, Mboweni, Pravin Gordhan and Gwede Mantashe, with the bad guys represented by Ace Magashule, Faith Muthambi, Supra Mahumapelo and others.

This cowboys-and-crooks-perspective is naïve. It also fails on at least four grounds.

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Central planning, Competitiveness, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Expropriation without compensation, Investment/Divestment, Land ownership, Marxist-Leninist ideology, Property rights

Treasury’s document: Small shift in common sense; no giant leap in ideology

Johannes Wessels
@johannesEOSA1

Will the most important Government document on economic policy since the ANC threw GEAR (Growth, Employment and Redistribution Policy) into reverse, namely Treasury’s “Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa”, convince both Moody’s and potential investors that South Africa is a stable investment destination?

Since its release end August, the Treasury document attracted both support and condemnation. For some it signals a first ray of the much-delayed New Dawn promised by Ramaphosa’s 2017 manifesto; for others, a total onslaught on worker’s rights and a selling out to the forces of unbridled capitalism.

Much bolder than the elaborate National Development Plan (NDP) that received mere lip service during the Zuma-Ramaphosa era from 2014 – 2018, Treasury’s document bluntly concludes:

“The current state of the South African economy is unsustainable. Low economic growth entrenches poverty and inequality… Addressing our economic challenges requires an immediate focus on policies that will raise South Africa’s potential growth.”

Ideological drift sand

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Accelerated and Shared Growth Initiative for South Africa (ASGISA), Black economic empowerment (BEE), ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Emigration/Immigration, Expropriation without compensation, Marxist-Leninist ideology, Productive knowledge, Public service delivery, State Owned Enterprises (SOEs)

Ten wasted years: Preferring “Dumbing Down” to “Productive Knowledge”

Johannes Wessels

@johannesEOSA1

TEN WASTED YEARS… Tito Mboweni’s colloquium “to think outside the box about economic growth” is akin to closing the stable door after the racehorse had not only bolted, but already won a race elsewhere. Scavenging in the ANC dustbin of rejected advice, Mboweni picked Harvard economist Ricardo Hausmann as advisor, knowing well Hausmann’s advice on productive knowledge had been flatly ignored by the ANC Government since 2008.

Hausmann considers productive knowledge as the key factor that separates successful countries from unsuccessful ones. A lack of productive knowledge therefore retards economic growth and development.

From 1990 to 2003 South Africa lost 7% of its professionally qualified people, predominantly high-skilled whites. After some stability that came during the high growth Mbeki-Manuel years the exodus was re-triggered by the growing ineptitude of an administration that radically transformed departments and state-owned enterprises (SOEs) into little more than facades.

The police service, SAA, Transnet, the NPA and municipalities are some examples where cadre deployment trumped productive knowledge. The result:

At township level, the disgruntled resorted to service protests.
At professional level, they packed their bags and headed to the emigration counter with highly skilled blacks now outnumbering their white counterparts, bound in solidarity by a deep non-racial gatvolheid in the slide into corruption, lawlessness, dismal public services and the undermining of property rights.
At investor level, South African businessmen have emigrated through FDI: fixed investment by South Africans abroad exceed fixed investments lured to our shores.

Make BEE growth compatible

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Accelerated and Shared Growth Initiative for South Africa (ASGISA), Black economic empowerment (BEE), Central planning, Crime against business, Demographic-entrepreneurial relationships, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Job creation and unemployment, Marxist-Leninist ideology, Productive knowledge

SA Government values mice as cheese factory managers more than productive knowledge

Almost 50 years ago, in 1970, Alvin Toffler in Future Shock wrote: Knowledge will become a more important driver of growth than capital or labour.

The two parties that then dominated the South African landscape did not hear the message: they had ideological ear wax and blinkers.

Inside the country the National Party wasted an opportunity to revamp and refocus Bantu education. In the words of Verwoerd, Western education was “of no avail for training which has as aim absorption in the European community while he cannot and will not be absorbed there. There is no place for him in the European community above certain forms of labour. However, within his own community all doors are open… For that reason, it must be replaced by Bantu Education. In the Native territories where the services of educated Bantu are much needed, Bantu education can complete its full circle, by which the child is… developed to his fullest extent in accordance with aptitude and ability…”

The harvest: the Soweto 1976 riots.

In exile and underground the ANC under the SACP influence believed labour was all important and capital from hell and that labour time was all that gave value to a product or service – a belief still voiced in 2016 by their leader. (That statement was never repudiated by Ramaphosa or any leader in the ANC.)

The 80’s introduced “liberation before education”, the burning of schools and the intimidation of teachers and after 1994, the ANC government ensured SA’s education system became one of the worst performers in the world at the highest cost (% of GDP).

The harvest: a suffocating labour regime that leaves SA businesses hamstrung (considering productivity levels) and that promotes low-employment business practices.

Whilst race remains an important indicator to measure inequality, trying to always explain situations from a racial perspective often implies ignoring solutions with better potential than betting on race. The ANC is not alone in operating with racial blinkers. Musi Maimane’s statement that race remains “the only consistent measure we have at this point for measuring inequality”, is simply wrong.

So is Ramaphosa when he offered protection for Maimane for that remark.

And so is Chris Bateman’s editorial to a recent Bloomberg report on Johann Rupert’s comments during the Chairman’s Conversation when he wrote: “What he (Rupert) misses in his strong argument that Eskom and other SOEs are the real monopolies, is that White Monopoly Capital, like all effective propaganda, is built on the fundamental truth that our Gini-coefficient runs on racial lines – due to the architecture of apartheid.

There are non-racial measure tapes available… and some measure more accurately than race. After a few examples where the ANC government chose cadres rather than knowledge, the focus will fall on one non-racial explanation for income and wealth inequality.

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