Correction or corporatism? – Thandeka Gqubule

I felt vindicated – but sad – when ANC president Jacob Zuma told this year’s party ­anniversary dinner in Durban: “I have always said a wise ­businessman will support the ANC because supporting the ANC means investing very well in your business.”

Since the governing party’s ­national conference at Mangaung last year, I feared we were witness to a long-term project of state and policy capture by capital, the induction of ANC Inc.

The ascendance of business doyen and billionaire Cyril Ramaphosa to the position of deputy president of the party was as unsettling.

Headlines shouted a question: “Is Cyril the answer?”

To which the ­logical response is to ask: “Is Cyril the answer for whom ­exactly?”

Speaking to businesspeople since the president’s questionable statements in Durban, I sense fear.

“He was only joking”, they say ­nervously.

“The chattering classes who hate Zuma are humourless,” one said.

But what kind of joke implies a squandering of the public trust and, in spirit, violates a presidential oath of office to rule in the interests of all citizens?

A branch of economics has held a dazzling fascination for me since Mangaung.

The seminal work of Nobel prize-winning economist George Stigler, the Economic Theory of Regulation, has had illuminating relevance to what happened at ­Mangaung.

Central to the economics of regulation is the concept of “capture” – the notion that powerful interest groups can “acquire” or “seize the state” or “arms of the state” that are elected to act in the interests of the public.

These are subverted to achieve a policy outcome or a dispensation ­desired by such interests.

Capture is often the tactic of powerful ­commercial interests that feel ­threatened by a possible policy ­outcome.

Policy capture can undermine the stated aims of policy and ­reform, and it is linked to the ­economics of corruption and rent seeking economic behaviour.

Rent seeking is economic behaviour that does not create new wealth, but manipulates the political and/or social order to increase one’s share of wealth already created.

South Africa’s black elite has been described in emerging economic literature as an unproductive, consumptive and parasitic elite that lays its hands on the apparatus of the state to maximise its share of wealth.

Arguably, Cyril Ramaphosa is one of its most prominent representatives, one of the invested parties in the mineral and energy complex that is the power at the heart of the South African economy.

This group had the most to lose if the ANC had taken resolutions about the mining industry that would have changed the structure of its ownership and benefits.

In post-apartheid South Africa, the marginalised, the poor, women, ­children, disabled people and many others put our faith in the idea that regulation is the main instrument though which social and economic benefits are distributed.

This faith has been betrayed.

After Mangaung, the structure of the mining and financial industries will remain the same, and squalid ­social conditions will not be ameliorated by state action.

Mangaung was our moment of disenchantment.

But Mangaung was not about policy; it was about big and powerful men. And the most powerful of them said last week: “If you go beyond … and become a member, if you are a businessman, your business will multiply. Everything you touch will multiply.”

The question in economics is what will multiply – given our modest growth rate? How will this wealth multiply?

What is our president selling? What is his stock in trade?

I pray it is not the instruments of state.

If it is, there is a name for that.