By: Mphuthumi Ntabeni
The article, ‘Political Left Labours under a fallacy’, by the DA’s spokesperson for finance, Mr. Ashor Sarupen, is hogwash. He buys his rejection of the Left on the cheap by first deliberately misconstruing the definition of neoliberalism to promote his preconceived ideas. Then he accuses the Left of becoming what he wishes it to be in order to blame it for what it is not to divert attention away from the blatant failures of neoliberalism and its policy of market fundamentalism.
Indeed many tend to talk about the notion of ‘neoliberalism as the root cause of all economic ills’ without a clear understanding what neoliberalism is. This does not make them wrong or ignorant. They feel its effect more than the ivory tower theorist sitting on air-conditioned offices, pontificating about, and peddling useless theories whose ultimate goal is to creat the elite and protect their privileges. This endemic practice of the privileged imposing their voice by speaking for those who bare the burden oppression that has led South Africa into the mess of perpetual policy peddling that has created one of the most unequal societies in the world.
Neoliberalism, Mr. Sarupen, are economic policies that radically support the privatization of public enterprises, opposes social welfare programs, and favours policies designed to subsidise and expand the role and control of foreign and local private capital. That is the classical short definition of it. As we know, there are different degrees of neoliberalism. The DA propagates the radical kind where the ANC tempers it with social welfare programs.
Being accused of dishonesty by a conservative party that is wearing tattered liberal robes is probably a compliment to the Left. But for argument’s sake, let’s indulge Mr. Sarupen:
First of all, the Left is rooted in struggles that are not only historical, but are reactionary to politics and economics of hideous callousness of governments that sell their citizens to the vagaries of market and corporate greed. Despite its rhetoric, the ANC government economically underserve the majority of its citizens. It allows private business to grab the greater part of our natural wealth for the benefit of the elite few. This creates massive economic disparities, in turn generating unimaginable suffering for the majority of the country’s inhabitants.
Where politics, as Nietzsche lamented, become “an instrument of the stock exchange” the marginalised majority looks upon the Left to save it. Making politics the instrument of stock exchange (they call it market related policies) is the ultimate goal of the parties of conservative economic Right, like the DA. We shall tell you what’s wrong with that in case you’ve been sleeping walking the whole of twentieth and twenty first century financial crises (according to Karl Marx these crises will intensify towards the final collapse of the capitalist system due to its internal contradictions).
Besides the fact that most economists are now beginning to admit that Market-related policies not only disenfranchise the poor and create the modern crisis of enormous wealth gap, they are immoral and faulty. It is not a mystery that a party like the DA supports Free Market related policies because these create a systems where the minority bankers and financiers, through corruptible political elites, are controlling juntas at war with real democratic needs of the majority. These juntas are DA financial supporters.
The Free Market system is flawed, in practice. The knowledge possessed by markets is always imperfect, and market behaviour is often not rational. The price set by a market takes no account of externalities, such as the social costs of a housing shortage which can translate into demands on the taxpayer for subsidies or welfare benefits. Nor does the theory take account of herd behaviour, and the tendency of markets to be governed not by rational choice but by panic or exuberance.
The DA, of course, ignores the natural tendency to rig markets by creating formal and informal cartels – which Adam Smith famously called a “conspiracy against the public.” Have you ever heard them speak against private corruption, yet, according to the IMF, there’s an illicit money flow out the country of about R580 billion a year. The consequences are corrosive for everyone. The money could have used for much needed economic development of the country.
Extreme inequality corrupts politics, hinders economic growth and stifles social mobility. It fuels crime and even violent conflict (the report, commissioned by the UN Economic Commission on Africa and the African Union, tabled at the AU assembly, proved that violent crimes and instability are more common where inequalities are blatant than just poor societies or countries). Gross inequalities squanders (black in this country) talent, thwarts potential and undermines the general foundations of society. It is not rocket science why South Africa has all the problems it has despite its economic status. It all points to the gross inequalities we have in this country. Let’s make few examples to push the point through:
- Bangladesh and Nigeria, for instance, have similar average incomes. Nigeria is only slightly richer, but it is far less equal. The result is that a child born in Nigeria is three times more likely to die before their fifth birthday than a child born in Bangladesh.
- In Zambia, GDP per capita growth averaged three percent every year between 2004 and 2013, pushing Zambia into the World Bank’s lower-middle income category. Despite this growth, the number of people living below the $1.25 poverty line grew from 65 percent in 2003 to 74 percent in 2010. Research by Oxfam and the World Bank suggests that inequality is the missing link in explaining how the same rate of growth can lead to different rates of poverty reduction.
Leaders around the world are debating new global goals to end extreme poverty by 2030, including our NDP. But unless they set a goal to tackle economic inequality they cannot succeed – and countless lives will be lost.
What the DA is refusing to see – deliberate blindness – is that the democratic elaboration of a system of rights has to incorporate not only general political goals but also the collective goals that are articulated in struggles for recognition if we are to overcome the disenfranchisement of underprivileged groups, and with it the division of society into gross social classes. The DA can’t have that, because it is a party that thrives on class divisions, fear mongering and protection of minority rights at the expense of justice towards the majority. For the rest of us, real ‘democracy is the solved riddle of all constitutions’(Marx).
The DA pseudo liberal ideology wants to safeguard the private autonomy of citizens with equal rights, but does not want that to go hand in hand with activating their autonomy as citizens entitled to the wealth of the nation. This is why they are against leveling playing field (otherwise known as Affirmative Action) for individual freedom to mean anything, but instead prefers the meaningless meritocratic system that would maintain the status quo while admitting only few ‘clever blacks’ into the hegemony of white liberalism.
There’s no denying that over the last three hundred years or so, the market economy has brought prosperity and a dignified life to some people, including the few, mostly white in South Africa. However, as economist Thomas Piketty demonstrats in Capital in the Twenty-First Century, without government intervention, the market economy tends to concentrate wealth in the hands of a small minority, causing inequality to rise. Despite this, ‘market fundamentalist’ like the DA still insists that sustained economic growth only comes from reducing government interventions and leaving markets to their own devices, even as this undermines the regulation and taxation that are needed to keep inequality in check.
The consequences of Thatcher and Reagan policies the DA so lauds is that, during the debt crises of the 1980s and 1990s countries in Latin America, Africa, Asia and the former Eastern bloc got subjected to a cold shower of deregulation, rapid reductions in public spending, privatization, financial and trade liberalization, generous tax cuts for corporations and the wealthy, and a ‘race to the bottom’ to weaken labour rights. Inequality rose as a result. Say nothing about what it did to manufacturing and industrial cities of the world; e.g. Glasgow and Manchester, where the name Thatcher is still anathema up to this day.
By 2000, inequality in Latin America had reached an all-time high, with most countries in the region registering an increase in income inequality over the previous two decades. It is estimated that half of the increase in poverty over this period was due to redistribution of wealth in favour of the richest. In Russia, income inequality almost doubled in the 20 years from 1991, after economic reforms focused on liberalization and deregulation. South Africa stands above even Latin American countries in gross inequalities since the deregulations brought about the ANC government.
Nowhere in the world has it become clear as in South Africa that Free Market system is just a veil for the elites to use their heightened political influence to curry government favours – including tax exemptions, sweetheart contracts, land concessions and subsidies – while blocking policies that strengthen the rights of the many. In confrontation with the needs and struggles of the poor and working class this will inevitably lead to more tragedies like Marikana.
To put salt in the wound of the poor, most of the richest people made their fortunes thanks to the exclusive government concessions and privatization that come with market fundamentalism. In the UK, in the US and privatization in Russia and Ukraine, after the fall of communism, turned political insiders into billionaires overnight. As indeed the likes of the Ruperts and Cyril Ramaphosas of this country. Once they become filthy rich the magnates want government to keep away.
The truth of the matter is that Free Market fundamentalism accompanied with political capture by wealth, as happened with the ANC, worsen economic inequality, and undermines the rules and regulations that give the poor and the most marginalized a fair chance. What seem to be lost is the fact that the continued rise of economic inequality around the world today is not inevitable – it is the result of deliberate policy choices by politicians who, most of the time, are in the pockets of private wealthy. Governments of the Left reduce economic inequalities by rejecting Market Fundamentalism, opposing the special interests of powerful elites, bolster the power of the working class on economic policies, change the rules and systems that have led to today’s inequality explosion, and taking action to level the playing field by implementing policies that redistribute money and power. This, Mr. Sarupen is what the Left is all about.
Gross income inequalities are the most obvious way in which market system is going wrong, but it is not the only, or the gravest way. Hobsbawm was right when he said Capitalist economics was creating a planetary menace that liberal-democratic politics was incapable of meeting. Technical change and economic growth might have bettered people’s lives but, left to run uncontrolled, shall endanger the globe and threaten future lives. Thomas Piketty in our times has picked up and advanced this argument.
The expansion of public ownership of the means of production is crucial to the Left, even if, like Airport Company model, it means they must be run by a private firm that is accountable to government or its agency. The sighting of ESKOM by Mr. Sarupen is a little disingenuous – a crass example of DA’s fear mongering tendencies. ESKOM, otherwise reasonably ran state company, has been let down more by poor political decisions of the ruling party than anything else.
The Left is for clean governance, the increase in social spending for welfare programs, greater public participation in local decision-making, an independent foreign policy based on greater African integration, increase in progressive taxation of the rich, free public health and education. We also strive for partnership between government, communities and private capital of the country’s natural wealth for a creation of more economical equitable country.
The Left aims to build a people orientated economic activity that is inclusive, politically tolerant, open and democratic. If a Mall, for instance, must be built in Khayelitsha, it must be a joint project between government, the community and private capital. No more the nonsense of big property developmental capital coming to the townships, killing its business without any benefits to its denizens, while feeding the insatiable appetite of big white capital.
The Left is wary of economic determinism in regard to inequalities of wealth and income. We know that the history of the distribution of wealth has always been deeply political, so it cannot be reduced to purely economic mechanism of market fundamentalism. And because the process by which wealth is accumulated and distributed pushes towards divergence and high levels of inequality, we believe state intervention is crucial on market economy. Hence we advocate for a more interventionist state that does not necessarily become a welfare one.
You are right in fearing, even hating the Left Mr Sarupen, because it has nothing in common with your DA. But you have no right of labelling it what it is not so as to plaster your own prejudices on it.