THE Economic Freedom Fighters (EFF) may appear like a bunch of attractive radicals but the party’s policies are Marxist fantasies that will take South Africa’s economy in the wrong direction. Our country has already experienced a ‘dirigiste’ economy with nationalised corporations called parastatals. Eskom and Telkom had to be bailed out last year with billions of taxpayers money. SAA and the Post Office fared no better.
Telkom posted one of the biggest non-mining losses in the South African economy last year with a 11.6 billion rand write down. The net loss for the year through March 2013 compared with 216 million rand a year earlier. Eskom’s losses are even more startling. The parastatal made a loss of R10.7bn through supplying electricity to Hillside, the bigger of the two aluminium smelters at BHP Billiton and is heading towards a R350bn debt trap. 2012/13 saw the SA Post Office post a net loss of R179 million, while SAA was bailed out to the tune of R550 million*.
South Africa’s experiment with the dirigiste economy has thus, largely failed. At very least, its parastatal dimension has ceased to be relevant in terms of economic growth. The resulting 25 billion rand plus annual drain on the treasury is nothing to be sneezed at. Paradoxically, direct investment in the economy by the state in the form of the Public Investment Corporation (PIC) has seen growth of 18% pa with R1.40 trillion in assets under management to date, including a range of equities publicly traded on the Johannesburg Stock Exchange.
Ultra-leftist political parties like the EFF opposed to the economic status quo, ironically continue to operate under the ruse that nationalisation is the answer to the supposed “neoliberal economy”. Quixotically promoting the old-fashioned command-style economics that characterised the policies of the former Soviet Union. These party factions fail to take into consideration the extent to which dirigiste interventions by the ruling party have already guided the development of the South African economy. The term dirigiste emerged in the post-war era to describe the economic policies of the French economy, which included substantial state-directed investment. The term usually denotes an economic system where the state exerts a strong directive influence in the form of a central authority as opposed to a merely regulatory, role for the state.
Expanding the uncompetitive and failing parastatal sector, and issuing new economic directives, for all their success and failures over the past 20 years in which the ruling ANC has maintained power, is not the recipe for job creation. In fact jobs and common land ownership, the rallying cry of South Africa 25% unemployed, may not be all that desirable. In an age of mechanisation and digital networks we are fast approaching the proverbial ‘end of work’ and a new economic paradigm termed, post-scarcity in which goods, services and information are universally accessible.
Another paradigm shift is the emergence of what is known as the “sharing economy” in which goods and property are shared or co-owned in innovative and new ways.
A different post-capitalist economic wisdom must therefore prevail. Think what would happen if the sovereign wealth of this country, invested in the private sector via the PIC, was redistributed in the form of a citizen co-ownership dividend? An unconditional basic income grant to all citizens funded via investment in a thriving market economy. Freeing citizens to become more than simply workers, we would end up with a sizable arts and culture sector along with unbridled academic and scientific inquiry.
Norway which reinvested profits from its oil and gas fields in the form of a sovereign wealth fund, has turned each and every Norwegian citizen into a millionaire. Switzerland recently voted to grant all its citizens a guaranteed monthly income of $2800. South Africa already has the means to do this, since the country has 80% of the world’s platinum supply and 50% of global gold reserves. This is more mineral wealth than is sitting in the bank vaults of Switzerland. If there is not enough money to pay our citizens each and every month, then why not a quarterly or biannual dividend? A real step-up, awarded in perpetuity, instead of a once-off sop to the prevailing discontent with our economic and political system.
Instead EFF plan to limit private ownership and state investment in the private sector by implementing regressive nationalisation policies that will take South Africa backwards. Zimbabwe is a case in point. The country has failed to correct its economic distortions and represents an abject lesson in failure, precisely what not to do so far as South Africa’s economy is concerned.
Supporting a party of commandeerists, who are thin on the wedge when it comes to individual human rights and who favour the same economic policies that have made ZANU-PF unpopular with investors, makes absolutely no sense. Economic directives too readily translate into directives aimed at undermining individual liberty. Bellicose party leader Julius Malema known for his often acerbic comments regarding South Africa’s white population has already expressed xenophobic views attacking South Africa’s Asian community while belittling Chinese investment. The EFF is thus feeding calls by black businessman to exclude Indians from state tenders. The apparent leftist overtones of the party disguise an essentially right-wing agenda in a political front whose ‘intellectuals’ are as prone to demand a totalitarian dictatorship as they are, the end of multiparty democracy.
Much like Don Quixote tilting at windmills, the playwright Mike Van Graan has endorsed the EFF, as the only party able to sock it to the ruling ANC. To provide some insight into Van Graan, I interviewed the man back in the day when the ANC was advocating policies very similar to today’s EFF. He might therefore be a little stunned to observe the manner in which age has changed his own political outlook, since the candid interview clearly shows how Van Graan is the kind of person who will be the first to cry foul when EFF cultural commissars start dictating the content of dramatic works, to redact such works in line with party centralisation and Marxist ideology.
The EFF are not the antidote to the ruling party’s lackluster performance. South Africa may need a radical adjustment to an under-performing economy trapped in slow growth mode, but this means moving away from the state-directed policies that have hampered growth and held-back development. Embracing a market economy balanced by a social democratic welfare state is the better solution.
* SAA posted a R3bn operational loss in 2012/2013 financial year