/ 6 October 2017

Collars and ties mask the real white monopoly capitalism

The conversation on white monopoly capital is being extended to include corruption
The conversation on white monopoly capital is being extended to include corruption


Last week a conceptual barrier was broken at the University of the Witwatersrand’s Great Hall: two leading critics of KPMG’s enabling role in the “Zupta” perversion of governance, Pravin Gordhan and Iraj Abedian, made an unusual case against white monopoly capital (though they obviously couldn’t name the beast as such).

Gordhan served from 2009 to 2017 as a white monopoly capital-compliant finance minister. But given how deeply rooted he now describes the culture of corruption, the solution isn’t self-motivated internal reform.

Instead, he concluded, mass action is required against big capital and parastatals, perhaps to the bitter end: the fate Bell Pottinger just suffered.

Protest against corporate injustice remains one of South Africa’s greatest strengths, the World Economic Forum indirectly acknowledged in last week’s Global Competitiveness Report. Since 2012, our workers have been considered the world’s most confrontational in the Swiss-based forum’s survey of 14 000 executives.

On the other side of the class struggle, recall that PwC regularly names the Sandton elite as the world’s most prone to corruption — especially procurement fraud, money-laundering, asset misappropriation and bribery— and that 80% of our corporate managers “do crime”.

Before leaving his top treasury job after death threats earlier this year, Kenneth Brown estimated that more than a third of the government’s R600‑billion annual procurement budget is lost to corporate theft.

As a result, the International Monetary Fund reports, South African firms now claim average profits among the top five of all major economies, and the World Bank acknowledges that the highest-income 1% doubled their consumption of our national pie from 10% to 12% in the 1990-1994 period to 18% to 20% since 2008.

So, are corruption and inequality hard-wired into South African capitalism?

Gordhan explained: “There’s a particular culture in the dominant part of business in South Africa, or some sections of that business, that we’ve inherited from our past, in the sanctions-busting era. Elements of that DNA are still persisting, 23 years later.”

Abedian, who recently quit insurance company Munich Re’s local board because of its KPMG contracts, confirmed: “There is an embedded culture where national resources are for the benefit of the rich … What we should be doing first is looking at the actions of those who sit on boards of insurance companies‚ banks and investment companies.”

In contrast to the no-holds-barred truth-telling by Gordhan and Abedian, others retain an either/or Gupta/white monopoly capital bias.

As social critic Jonny Steinberg complained in Business Day last week, debates he is having with (pro-Zuma) interviewees are frustrating: “It seems that we believe what we believe; any new evidence simply fills the contours of the story we are already telling. Mine is that an unholy alliance of politicians and bureaucrats in hock to a rich family has hijacked public institutions. Theirs is that global corporations have stolen South Africa.”

Both positions are correct. South Africans from all sorts of backgrounds are expressing hostility against several firms linking the Guptas and white monopoly capital: spin-doctors Bell Pottinger, accountants KPMG, consultants McKinsey and two German software firms.

Such healthy hatred is by no means new. Since the origins of white-settler profiteering began with the Dutch East India Company invasion in 1652, later amplified by the likes of Cecil Rhodes and Ernest Oppenheimer’s Anglo American Corporation, resistance arose from grass-roots, labour and nationalist (both Boer and black) activists. Mostly, the targets of these protests have represented malevolent greed and often outright theft. They were:

• Hundreds of Western multinational corporations and banks that ignored anti-apartheid sanctions called initially by Albert Luthuli;

• Big Pharma profiteers that denied access to Aids medicines, until the Treatment Action Campaign removed their monopoly patents (raising average life expectancy from 52 in 2004 to 64 today);

• Post-apartheid’s public-private plunderers, including municipal water firms (Suez, Biwater and Veolia) and Gauteng’s highway e-toll managers (Kapsch TrafficCom), which were pushed back by unions, township activists and the Organisation Undoing Tax Abuse;

• The Zurich Fifa mafia, whose 2010 World Cup ran into local protests;

• Collusive construction, bread and cellphone companies, and bankers fiddling the currency — all under fire from the Competition Commission, in turn fuelled by social outrage;

• Lonmin’s extreme labour exploitation and illicit financial outflows, fought against valiantly by mining union Amcu;

• The World Bank in lucrative roles — as apartheid lender (Jubilee 2000 and Khulumani demanded reparations), Lonmin investor (taken to task by Marikana grass-roots feminists and the Wits Centre for Applied Legal Studies), primary creditor for Eskom’s corruption-riddled Medupi power plant (hauled over the coals by Lephalale critics and Earthlife Africa) and lead owner of Net1-CPS, the social-grant disburser that illegitimately debit-ordered millions of poor people (until Black Sash forced its chief executive out this year);

• The “big three” credit rating agencies (Standard & Poor’s, Fitch and Moody’s) which, since 1994, have state-captured the treasury, thus compelling cutbacks in social infrastructure and higher-education spending in the world’s most unequal country — they were fiercely contested (albeit indirectly) by myriad service delivery protests and #FeesMustFall; and

• Three Gupta brothers who, along with their allies in ethically challenged British, United States and German corporations, are now forever despised and brand-degraded.

Self-correcting mechanisms appear broken. The World Bank’s inspection panel is toothless and, if South Africa’s Independent Regulatory Board for Auditors belatedly finds KPMG guilty the maximum penalty is R250 000, small change given the fees it has raked in from its “consultancy services”.

Instead, calls for the corporate death sentence ring out. Daily Maverick columnist Richard Poplak advises: “We need to go after the likes of KPMG and Bell Pottinger, and bury them — not just because they’re complicit in Zuma’s state capture project, but because they’re shitty institutions that do shitty work and they deserve to die.”

Wits School of Governance director David Everatt warned these firms on The Conversation: “South Africans will hold them accountable or, if necessary, break them.”

After applauding last Wednesday’s anti-corruption marches by labour and communists, Gordhan told the Wits audience: “While debates like these are important, in our political culture it’s mass action that eventually counts. It’s the involvement of people who are willing to put some effort into bringing about changes that actually makes a difference.”

Patrick Bond teaches political economy at the University of the Witwatersrand