It was George Stigler — hardly a progressive economist, but nonetheless a Nobel economics laureate — who developed the theory of ”regulatory capture”.
He suggested that political participants will use the regulatory and coercive powers of government to shape regulatory processes in a way that is beneficial to them.
At the other extreme, it was Daniel Guérin, Marxist turned anarchist, who showed that fascism supported capital-intensive industry to the detriment of lighter industrial sectors that produced consumer goods.
The prime example of such an industry is the arms industry. Supported by the military-industrial complex, this sector epitomises the secrecy, vested interests, massive cash flows and obscurantist discourse that provide the most fertile breeding ground for regulatory capture.
In South Africa the confluence of these phenomena has been dramatically displayed by the capture of the National Conventional Arms Control Committee (NCACC), supposedly the watchdog of arms sales abroad, by the interests of the military-industrial complex.
South African citizens can be proud of the legislation that is supposed to govern the NCACC. It has flaws in that, for example, it fails to outlaw arms transfers to undemocratic countries.
But it also outlaws the sale of arms to countries that systematically abuse human rights and the need for reduced military expenditure in the interests of development and human security must be heeded.
Furthermore, the legislation demands transparency and lays down strict reporting requirements. While the functions of the NCACC may be delegated, applications for arms-sales permits must be considered case by case.
When it comes to the implementation of this legislation, South African citizens must hang their heads in shame.
The NCACC has failed to apply the criteria for arms exports, it has failed to meet its transparency and reporting requirements and it has failed to apply the case-by-case requirement.
It has failed to apply the criteria in that it has permitted arms sales to numerous countries with repressive regimes that regularly abuse human rights. The most glaring of these failures relates to the Chinese shipment to Zimbabwe and the history of South African arms sales to that country documented in the Mail & Guardian (June 27).
It transpires that, in contravention of the case-by-case requirement, the NCACC has given carte blanche to defence secretary January Masilela to grant permits for arms sales and conveyance of arms, to Zimbabwe. The argument by Masilela that there was no problem in selling or conveying arms to Zimbabwe because there is no arms embargo against that country is either disingenuous or a display of absolute ignorance of the requirements of the legislation.
In general the impression created by the NCACC is that it will sell arms to virtually any regime, regardless of the legislation. The only criteria that it appears to take seriously are arms embargoes to which South Africa is party and the interests of the South African military.
The NCACC also failed to present to Parliament and release to the public its annual reports for the years 2005 to 2007. This should have been done within three months after the end of those years.
It also failed to make quarterly reports to Parliament.
In fact, despite the transparency requirements of the legislation, pronouncements by the NCACC suggest that, in future, these reports will not be made public at all.
It appears that the NCACC has been captured by the commercial interests of the arms industry and the demands of buyers for secrecy. However, if the demands of buyers conflict with the law of the land, the latter must take precedence.
The arms industry must understand that it cannot enter into contracts that prohibit the transparency required by law.
It is precisely because of the nature of the products that the legislation requires transparency.
Statements have been made that transparency is not in the interests of the security of the state. This is no argument. Deterrence requires transparency and so does the development of trust. The legislature was fully cognisant of these issues when it passed this legislation and the committee has no right to contravene it.
South Africa is a parliamentary democracy and if it deals with another country, it can do so only on the basis that that country too has nothing to hide; otherwise that country is not a fit and proper counter-party to the transfer of arms.
The NCACC has evidently succumbed to regulatory capture by the military-industrial complex. In the process the watchdog has turned on its owner. It has become imperative that, lest we capitulate to fascist forces, the NCACC be recaptured by Parliament and the public and held accountable in terms of the law.
Rob Thomson is a member of the Ceasefire Campaign