Come back horrible Horace!

To the average shareholder on the JSE in the 1960s, financial advisor Horace Sammel – or ‘Horrible Horace” as he was known – was a scurrilous, troublesome blot on the good conscience of big business. A big man, Sammel had a mop of brown hair that flopped about as he raged at company chairmen. He would launch himself into annual meetings shouting ‘Proxy! Proxy!” and waving certificates signed by embittered minority shareholders authorising him to represent them.

Money was missing—grey-haired executives were cooking the books—swindlers had made Hollard Street their own. Horace got muscled out by Security but would carry on shouting from the corridors. It was a shambles worth attending if you knew of it in advance—

‘Horace Sammel, where are you now that the small shareholder needs you?” cried Alec Hogg, editor-in-chief of Moneyweb, commenting on speculative bubbles and investment rip-offs at the turn of the 21st Century. After a generation, after corporate governance scandals and the King Report 2002, after pension fund collapses and bank crashes, we can recognise Horrible Horace as a precursor of that ignoble but much-needed species, the financial anarchist (as opposed to analyst).

Anarchists are those who reject government in principle, and also reject private wealth. ‘Property,” pronounced the founder of anarchism, an impoverished printer and journalist by the name of Pierre-Joseph Proudhon writing at the time of Karl Marx, ‘is theft”. Marx should have liked that but didn’t (anarchism was bad theory). Proudhon went on to argue that current forms of the State should be replaced by a mutualist organisation of the economy plus free credit and barter between occupational groups. The State would disappear, the economy flourish.

Sammel never went that far. He just caused anarchy; he didn’t theorise about it, and I guess his bank account was healthy enough. The point is there’s precious little shit-stirring by anyone down at the hallowed trading cubicles of the JSE in plush Sandton, and even less in our media. There are definitely no free lunches for people who ask the tough questions about what wealth is and what it’s for because these questions have been ruled inadmissible in a world – and a developing South African economy – obsessed with the bottom line.

Don’t get me wrong: there are worse obsessions, like paedophilia. But look around you at the appalling disparities in our society and across the globe, where one-fifth of humanity is rich to reasonably well off, two-fifths are impoverished to absolutely starving, and the rest are on a sliding scale up or down.

Financial journalism is about money, stupid, not about people with no money! Right, let’s take it on those terms. It is unfair to expect the financial press to change its very nature because the world is in crisis.

‘There is a pool of really talented people but like other industries we also have the lazy and the mediocre,” says Kevin Davie, editor of ThisDay Business, reflecting on the financial press in South Africa. Davie is former editor of Business Times and senior staffer who helped to launch Business Day, and was the entrepreneur behind the brilliant but failed yuppie website, Woza.

Today he commands an entire business supplement which, being only recently launched and thin on advertising, Davie can pack with news, weighty features and analysis. This luxury is largely denied to competitors Business Day, Business Report, Sake Beeld and the business pages of Sowetan and the Citizen (which uses material from Moneyweb). It’s a rush to pack in the day’s sexy mergers and acquisitions, government bloopers and threats, scam exposés, share market diamonds and dogs, and breathless (rather than deathless) columnists.

The status of financial journalists has risen with their importance as a source of reader interest and advertising revenue ‘When we started Business Day it was not very well resourced at all but had very little serious competition. Financial journalists then were often broken down types, doing work that was considered boring or which no one else would do. This has changed dramatically. Now financial journalists are often top of the pile in terms of both reputation and salary.”

Davie is not a softheaded man, but he is too kind. Stephen Mulholland, also a former Business Times editor and a stirrer of note, puts things thus: ‘In a lifetime of reading newspapers it has often struck me that ours is an occupation in which people are paid to write authoritatively on matters of which they are ignorant.” Mulholland’s antidote, as expressed in his Sunday Times column, is to consult more experts and really think about what they have to say. This is good advice, but then you must take your experts where you find them.

That means the banks and brokerages and business schools; yet it has to be said that they have all bought into the world system as is, because that too you have to take as you find it. And there is something else. The heavy reliance of financial media on the JSE’s SENS – the Stock Exchange News Service – means they all get the same feedstock from the financial silo at the heart of the system, where greed and fear rule. Never mind the starving masses.

Few journalists will go out of their way to approach the anti-neoliberalism or anti-globalisation lobbies for ‘expert” insights. After all, they are not experts in anything but complaining. As Philippe Legrain, former economics correspondent for the Economist and advisor to World Trade Organisation says in a recent paperback (Open World: The Truth About Globalisation, published by Abacus in 2002), ‘The anti-globalisation movement is led by an unlikely alliance of media-savvy pressure groups and old-fashioned protectionists—These ‘globaphobes’ have all sorts of gripes, many of them contradictory and wrong-headed.”

It is comforting to read this in an intelligent and somewhat critical defence of the world system -enough said, surely. But no. These very phobics do have something to say and are experts in what affects them, as a curious little case study will demonstrate.

The Oppenheimer family’s recently floated plan for black economic empowerment (BEE), the Brenthurst Initiative, was cautiously welcomed by the trade union movement Cosatu. But – and it’s a huge but – ‘the proposals themselves aim solely to create a black capitalist class, and are entirely inadequate to address deep-seated inequalities and massive unemployment,” said Cosatu. The curious part of it is that Cosatu spotted something the majority of financial journalists blithely overlooked.

The Brenthurst initiative is an attempt to win tax breaks from the government in return for empowerment, at least to Cosatu’s way of thinking. The cosy rapprochement between Mbeki’s ANC and big business, linking tax incentives to BEE and developing a fund to pay for increased black ownership, is the kind of deal that gets charity a bad name – especially when the charity flows from taxpayers to business moguls. There was barely a whisper of analysis on this important point in the bulk of the financial press.

Why should there be? Financial journalism is about getting rich, stupid.

Fair Enough?

The Media contacted some of South Africa’s top financial editors and journalists for comment on Graeme Addison’s piece. What do they agree with, and what’s a load of bullocks?