If recent pronouncements herald the second phase of the governing party’s National Democratic Revolution (NDR), we can be sure the capitalists will leave – taking their money with them, and all hope of jobs and prosperity.
The uproar over African National Congress (ANC) secretary-general Ace Magashule’s remarks about the South African Reserve Bank reverberated down the whole of last week. It has sent shock waves through potential investors at home and abroad, and posed very disturbing questions about the true aims of the ANC and its new leader, President Cyril Ramaphosa.
Magashule is believed by many to be the kingmaker within the ANC and to be part of the faction that supported Jacob Zuma. Earlier this year he had loudly reminded us that it was ANC policy to nationalise the Reserve Bank. Last week he told us that the Bank should be used not just for ‘inflation-targeting’ (preserving sound money) but also for economic growth and employment.
The immediate matter in hand is not the problem. The fact that the Reserve Bank is privately owned is a formality. The Government has complete control over its policies and the private shareholders have no authority at all. The matter of whether any reserve bank should just check inflation or should pursue wider economic goals is very technical and much disputed around the world; it is not really ideological. These substantial questions don’t matter much to the anxious investment community. What matters is the symbolism.
The instant any ANC leader makes the slightest hint about nationalising the Reserve Bank or using it for wider purposes there is an immediate, almost Pavlovian, response from the rest of South Africa and the watching world. ‘Oh dear, the ANC is about to do a Robert Mugabe on us! They’re going to take over the Reserve Bank, print money to enrich the comrades, produce a billion percent inflation and then seize everything they can lay their hands on, including our properties!’ The trouble is there is plenty of justification for this hysterical thinking.
The ANC does indeed adore Robert Mugabe and supports completely his seizure of white farms. Apart from Nelson Mandela, I know of no ANC leader, including Ramaphosa, who has condemned Mugabe. The ANC does indeed have a long history of supporting Marxist ideas and working intimately with Communists. The ANC has made it quite clear how much it hates the capitalist system and has always been extremely hostile to business, making investment in South Africa less and less attractive.
What actually are the long-term goals of the ANC and what are the true aims of Cyril Ramaphosa? The ANC began in 1912 as a group of decent, Christian liberals, seeking only legitimate rights and freedoms. It was horribly abused by white governments. It changed character from about 1961, and from about 1976 it became an aggressive, violent organisation seeking power rather than freedom. It was highly successful and came to power in 1994. It seemed to have only two consistent ideological cores: Marxist economics and black African nationalism. Officially its great plan is the NDR, which has two phases: the first, which is completed, is to take over the country in a sort of liberal democracy; the second is to turn it into a hard-core Marxist state with black Africans controlling and owning everything.
Naturally the ANC is much too chaotic, incompetent and riven by faction to achieve any carefully thought out conspiracy. But one thing is certain: the default position of the ANC is always Marxism and black nationalism, always more state control, more restrictions against business and more racial engineering, through affirmative action, BEE and demographic representivity.
Where does Ramaphosa stand in all this? This is hard to say. Maybe it doesn’t matter. He swiftly surrendered to the EFF on Expropriation without Compensation (EWC). Is this because he himself believes in seizing property without compensation, as Mugabe had done, or because he believes it was politically necessary for him to say he does? Does it matter which it was? If Ramaphosa always thinks he must surrender to political forces within the ANC, his own beliefs become irrelevant. What matters is what he will do, not what he will think.
Capitalists are cowards, and investors are skittish and prone to panic. When they see trouble, they run rather than fight, and they take their money with them. The capitalists have never resisted any of the ANC’s ruinous policies against business. The early years of this century saw the greatest commodity boom in history, while South Africa was sitting on the world’s greatest commodity treasure. The boom passed us by. Australia and other countries, with fewer minerals than us, benefited hugely. We didn’t. This was because the ANC’s laws and policies attacked and punished the mining sector. None of the companies fought the ANC; they just left the country.
If Ace Magashule’s pronouncements actually are indications of the second phase of the NDR, the ANC can rest assured that the capitalists will put up no resistance against it. They will all be far away when it finally happens. So will our prospects for a prosperous economy and full employment.
Andrew Kenny is a writer, engineer and a classical liberal.
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