Sentletse Diakanyo
Sentletse Diakanyo

The financial crisis and rise of pseudo-socialists

In Capitalism, Socialism and Democracy Joseph Schumpeter makes an observation that may prove rather sobering for the pseudo-socialist peddlers of “vulgarised Marxism”. He says The Communist Manifesto is “an account nothing short of glowing of the achievements of capitalism”. Karl Marx noted that the bourgeoisie “accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals … The bourgeoisie … created more massive and more colossal productive forces than have all preceding generations together.”

The collapse of the global economy signalled the end of capitalism as we know it for the pseudo revolutionaries while the rest of us rolled our eyes to the heavens. The fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991 was the final nail in the coffin of communism and capitalism declared victory. Despite it being self-evident that communism is dead, denialism still reigns supreme among the pseudo-socialists. The revolutionary adventures of the 1960s provide futile inspiration.

Countries such as Cuba, North Korea and China hold on to the remnants of communism while others in Latin America, out of political expediency, have gravitated towards the Left because of their politicians’ desperate attempts to keep their filthy hands in the cookie jar. There is a growing realisation and acceptance among these backward countries that for a nation to progress and prosper, even misplaced nationalism can never make communism a logical and viable proposition.

The global economic meltdown poses serious challenges for Africa. As Africans we ought to realise that the world is tied together by an invisible umbilical cord. Though poverty and growing inequalities entice leaders to lean towards more populist ideologies such as socialism, capitalism continues to provide hope for those who are subjected to a vile and ignoble existence.

The grand posturings of the pseudo-socialists in government impedes its capacity to resist the temptation to be caught up in the vicious cycle of populist rhetoric at a time when the economic circumstances demand a decisive response. There needs to be a concerted effort towards greater political alignment and economic integration if Africa is to emerge from the rubbles of this economic meltdown prosperous.

Amid the growing spectre of trade protectionism as the global recession deepens, trade liberalisation among African economies appears to be vital if economic integration across the continent is to succeed. But there needs to be a determined effort to revive individual economies, establish fiscal and monetary discipline, as well as financial-sector stability. An important question remains — will Africa’s leaders respond to these challenges effectively? These are important preconditions for sustainable economic growth to take shape.

It does not help the cause of Africa if some countries agree to become a dumping ground for reject goods from developed countries; further stifling local producers who cannot compete against the cheaper goods that flood markets. Trade liberalisation in the global context poses significant risks for African countries, given their high inflation, unemployment and often dysfunctional markets. One wonders whether the economic Einsteins at Cosatu appreciate the soundness of the monetary policy implemented by the Mbeki regime and which continues under the Left-appeasing Zuma government, though it is uncertain for how long.

The challenge for African leaders is how to address these risks, particularly job losses, which often is the consequence of free trade. In countries where markets are not working well, job losses in one sector will not necessarily be offset by job creation in another. This could be problematic in countries with an already high rate of unemployment. Zuma promised South Africans 500 000 jobs by year-end. Zuma cannot be forgiven for making such a ridiculous promise when the economy has already shed about 447 000 jobs since the beginning of the year. A clear government programme with realistic targets is needed to resuscitate regional economies.

African leaders also need to address the level of industrialisation if they are to experience healthy trade flows between the member states of various regional economic blocs such as Comesa, SADC, Ecowas etc. The success of Africa in this respect depends on the regions building productive capacity, especially in those countries whose economies have been most devastated by the global meltdown. Black economic empowerment in our beloved country has only served to recycle wealth and not done enough to create new wealth, encourage the emergence of new entrepreneurs and industrialists who establish their own empires without being parasites on white wealth. With the current Zuma government not having an industrial policy action plan, the task becomes even more difficult and the realisation of economic goals bleaker.

Stable and prosperous economic regions, not economic populism, should in the long run be a magnet for foreign direct investment. But mindless civil conflicts, corruption, mismanagement will continue to be obstacles standing before us and the realisation of Nkrumah’s vision for Africa. Moammar Gadaffi of Libya, the chairperson of the African Union, is certainly not the right person to be driving the African agenda and ensuring the continent occupies its rightful and respectable place among the community of nations.

Economic populism threatens the sustainable, long-term prosperity of the continent, in particular here in South Africa. Populists have already begun pitting the poor against the economic elites who are portrayed as the architects of the poor’s misery. History teaches us that we cannot afford to have laissez-faire capitalism reign supreme nor a paternalistic state that is out of touch with the economic realities of our country.

It is important that we allow the market economy to function within the sensible parameters of oversight by the state. Adam Smith alluded to the “invisible hand” necessary to curtail the unbridled capitalist destruction of the economy. The fatal mistake made by politicians in the past was the general assumption that when the economy veers off its original path, competitive forces will intervene and ensure self-correction. The opposite proved true with disastrous consequences. What we cannot allow is paternal interventionism by the state that serves to disrupt economic progress and breeds crony capitalism.

The ANC and its pseudo-socialist alliance partners should learn that economic populism has proved suicidal in Latin America on countless occasions. Though we recognise that the socio-economic demands of the people need to be met, we cannot do so with little regard to the realities of how the economic wellbeing of all our citizens is to be created and sustained. The indubitable truth is that South Africa faces high income inequalities which the ANC has exploited to further its political aims — by playing on the misery of the poor to secure election victory and subjecting them to endless cycles of economic misery. The greatest crime to humanity was not the suffering of our people at hands of the oppressors but their continued suffering at the hands of the pseudo-socialist revolutionaries who liberated them.

Our pseudo-socialist brigade continues to make promises to the poor and “working class” that are far removed from the government’s capacity to deliver on them. The prescriptions of their populist policies are always vague and often with no practical meaning, as demonstrated by Zuma’s utterances during the State of the Nation Address.

It’s time the peddlers of “vulgarised Marxism” become conscious of the long-term consequences that political expediency has on sustainable development and the growth of the country and the continent.