The new political elite as well as the emerging black capitalist class are often indicted for having committed or been accomplices in the commission of the crime of ”cronyism”.
But what is ”cronyism” and why should we live in mortal fear of it? Also, is the South African version of ”capitalism” worthy of being defended against so-called ”cronyism”?
The dictionary points out that ”cronyism” is a derogatory phrase that refers to ”the improper appointment of friends and associates to positions of authority” (South African Pocket Oxford Dictionary, 3rd Ed, 2002).
The fundamental Marxist critique of capitalism turns on its inherently exploitatory relations between the owners of the means of production (capitalists) versus the proletariat (working class) whose labour is exploited to extract surplus value.
How the elite and the owners of the means of production appoint people to positions of authority, within those exploitatory relations, is not of material interest in the radical critique of capitalism.
It is the system that is structurally and inherently exploitatory and whether friends or enemies are appointed to run the system is immaterial. A critique of ”crony capitalism” misses the point in that it assumes that ”capitalism” is an excellent system for South Africa, save for the ”cronyism” that is spoiling it.
So it is best to separate the two and I consequently turn to the issue of ”cronyism”.
If I were the owner of a multibillion-rand operation, I would be foolish to appoint a stranger to run such an operation. Typically the heir or any person who gets recruited to top management would be someone who is well known either to me or to my top management (the ”who you know versus what you know” maxim).
This goes for any type of serious enterprise, venture or institution (including the government). In fact, in the United States, when a new political party comes to power it replaces all the top management with people who are loyal to the new dispensation.
Loyalty to the new dispensation is viewed as a critical component of one’s ”competence” for a public service position.
The US has extended this principle into the trade field where only the countries (and companies from those countries) that supported it in a particular war get awarded contracts to reconstruct after the destruction. So, there it is, our beacon of capitalism teaching us the significance of ”cronies” in the normal conduct of its business.
Ironically, it was under communism (or should I say Stalinism, to qualify it?) that cronyism was perfected, linked, very much like the US of today, to loyalty and allegiance.
The trouble is that most of the hardest critiques of ”cronyism” of late are people who were very quiet about the favouritism of the past apartheid system.
There are many people who continue to reap the benefits of the favouritism that was accorded to their parents by the apartheid system. They know how effective the system was in facilitating their success and may be rightfully worried that people of other races are now going to be the beneficiaries. As they say in isiXhosa, zingasuzela zinobusi (If they [bees] sting, they’ve got honey!).
I know huge multinational corporations where the son or daughter of the owner gets appointed to be the CEO, notwithstanding the existence of very competent and loyal employees who, in fact, can do a better job.
Until Pick ‘n Pay appointed a non-Ackerman to its helm about three years ago, people accepted this practice as understandable and given. But when Mbabane does it at his black economic empowerment company, everyone cries nepotism, cronyism and all the other isms — and so my son must eat dust for the rest of his life.
Does this make me a ”cronyist”? No. I am totally against corruption, nepotism and all forms of unfair favouritism. But this must not be linked to black economic empowerment or to the new, black-led government only. Systems should be put in place to ensure that there are checks and balances in store for the appointment of senior civil servants, the awarding of contracts and so on.
Ironically, the government has gone out of its way to do this. There are tender boards and committees in place in each government department and state organ. There are laws and institutions in place — for example, the Commission for Conciliation, Mediation and Arbitration; the Public Service Commission; the public protector, among others — to deal with unfair practices.
The largest sector that still awards contracts without tendering is the private sector. Most companies never advertise their contracts; promotions are still made at the discretion of the line manager concerned — usually overlooking the decision of whatever ”panel” was put in place.
The old-boys’ networks may have gone underground but, like al-Qaeda, they are still very much active and potent.
Of course, they do not appoint strangers like me to those top positions. A recent study by Empowerdex indicated that blacks still get only 3% of the total spend on procurement by JSE-listed companies. I bet you there are many cronies lurking among the remaining 97%.
To our new black multimillionaires, as well as our political elite, I say don’t appoint strangers and funny people to run your companies and departments, appoint us!
Just make sure that you follow the rules and regulations so that you are on the right side. This is what is going on in the private sector.
My only plea is that you do not limit it to your sons and daughters. Let us have a ”broad-based cronyist system”!
Loyiso Mbabane is a senior lecturer at the UCT Graduate School of Business