Call out white monopoly capital to expel it

There are divergent views about white monopoly capital and whether it exists and, if it does, whether the government can efficiently and effectively fulfil its role.

Some have advanced a narrative that says such a description of our socioeconomic reality has the propensity to polarise the country, negating Nelson Mandela’s legacy.

Others, such as former President Thabo Mbeki, have opined that this narrative is a bid by the government to conceal its looting from government coffers and use “white monopoly capital”, which does not exist, as a scapegoat to mask its mischief and duplicity.

Then there are those who say the discourse is long overdue and the ANC-led government must never be apologetic, because it speaks justice and wages a new mission of “radical economic transformation”.

What are the facts?

The reality of post-1994 South Africa is we have a hierarchy in terms of capital. At the bottom are poor, landless black people and at the top the wealthy, a minority who are mainly white people who control more than 90% of the wealth of this country.

Whether we agree or disagree to categorise capital according to race, the reality is that the top 25 JSE-listed companies are still controlled by white people who also control more than 80% of the shares.

If we posit the state as a monopoly, we could come to the conclusion that white monopoly capital has captured the state, because the ANC has no direct control of state owned entities; access to capital and opportunities in these entities are limited by economic, legal and manipulation barriers, such as the Construction Industry Development Board and the Preferential Procurement Policy Framework Act,which give oligopolies the right to monopolise and collude.

Choosing to dismiss the case that a certain race dominates the ownership and management of key economic sectors is not only ahistorical but it’s a time bomb that seeks to delay the aspirations of the black majority who can no longer hide their impatience with the ANC.

We must admit government economic policies, and the ones that were mainly championed by Mbeki, failed to transform the South African society and achieve social justice.

The latest Statistics South Africa figures show that unemployment stands at 27.5. Surely this is an indictment of ourselves as the ANC, financial institutions that manipulate the currency and those who still refuse to acknowledge that macroeconomic policies to create a “business friendly environment” has not borne fruits.

It came as a surprise a few days ago to hear Mbeki’s responses when radio station PowerFM hosted him to speak about his time as president of the ANC and the country as well as the “issues of national importance”. Once again we were reminded that nine years is a long time in politics.

When asked about how South Africa should address the deepening problems of unemployment and low economic growth, his answer was that the country needs investment. Obviously he still subscribes to the old idea that foreign direct investment could solve all our problems.

Mbeki is correct about white families or owners selling down equity stakes, but their control remains.Although Christo Wiese owns less of Shoprite than he previously did, his voice in the fate of the company is significant.

This is also true in terms of the Rupert’s and Remgro, who have interlocking companies through cross-sharing and cross-directorship to a point where they have shares in more than seven of the top 25 JSE-listed companies.

They also control the banks that give them access to capital and they control some asset management companies, which are sub-contracted to the Public Investment Corporation, which enable them to play around with “black money”.

This control is also reflected in the number of chief executives in the JSE-listed companies who are white men.

So the discussion about white monopoly capital effectively centres on control even if you dismiss effective ownership. In that sense, it takes us back to the discussion about decision-making in the economy.

To his credit, Mbeki outlined how South African companies keep more than necessary cash reserves. He called it “maintaining high levels of liquidity” rather than using “cash hoarding”.

How can government roll out social grants, minimum wage for youth, free education and health care when companies are engaged in acts of economic terrorism (dodging or delaying paying taxes)?

The decision to allow the relisting of major South African companies abroad during Mbeki’s era also had disastrous consequences. It led to the stock of South Africa’s foreign direct investment increasing by 247%. Payments to these London-listed entities has been the single largest contributing item to the accumulation of external debt (37% between 2004 and 2013) that has led to the downgrading of South Africa by credit rating agencies.

Essentially, the country had to borrow short-term (interbank loans and short-term foreign portfolio flows) to fund induced extraction of long-term capital, which continues to sustain white wealth domestically and monopoly capital internationally.

Mbeki argues that the problem with South Africa’s economy is that it doesn’t have savings – yet he allowed the very extraction of these savings to the London Stock Exchange.

This means decision-making in terms of the use and movement of capital, and its effect in the economy and on the lives of the majority, remains intact.

How do we change this situation?

We can’t if we won’t call it by its name. We know in Africa we must call out bad spirits by their names if we are to expel them. White monopoly capital must be treated as such.

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