Nationalisation is coming, in a big way

John Kane-Berman warns against being distracted by the 'privatisation' of SAA

Let’s not forget the other type of state capture  

The proposed partial privatisation of South African Airways (SAA) and the lifting of some restrictions on the private generation of electricity have caused a flurry of excitement among some journalists and business representatives. Privatisation is here with a “bang”, while “huge steps in one week get structural reform moving”. Cyril Ramaphosa even says “permit processes” must be cut from six months to three.  

The country is desperate for good news, and there is some of it around. Annualised and adjusted growth of 4.6% in the first quarter was better than many expected, while various confidence indicators, including the agribusiness one, are improving.

But the problem with the “huge steps” view, which was expressed by Business Leadership SA a fortnight ago, is that it ignores a great deal else that is going on. Black economic empowerment and employment equity legislation are becoming more onerous. Amendments to equality legislation will lumber business and other entities with a host of new demands. More and more sectors of the economy will become subject to “master plans”. “Green industrialistion” will no doubt entail further restrictions.

As for privatisation, whatever benefits might arise from the sale of part of SAA will be outweighed by plans to nationalise private health care, the implications of which were spelt out in Daily Friend last week by my colleague Anthea Jeffery. The African National Congress (ANC) is also busy planning to empower the state to confiscate – in other words, nationalise – land and other private property.

So if privatisation is here with a “bang”, thanks to the proposals for SAA, nationalisation will soon be here with a much bigger bang unless the ANC and its various allies can be persuaded to abandon their planned assaults on health care and private property. The fiscal gains derived from selling off a chunk of SAA will be trivial when compared with the immense fiscal, economic, and human costs of nationalising health care and expropriating private property.

Moreover, of course, the state will control a larger share of the economy and of private life. This will give the ANC even greater powers of patronage than it already has. While the Zondo Commission is hearing evidence about the pervasive corruption among cadres deployed by Luthuli House, some of those same cadres are busy with plans that will result in even more opportunities for corruption. Will Judge Zondo have to sit forever?

“State capture” of the kind being investigated by the commission is but a subsidiary of the wider programme of capture that has long characterised rule by the ANC and its communist and trade union allies. This was the intellectual capture of the ANC by Marxist-Leninist ideology, and its adaptation for South Africa of “colonialism of a special type”.

A substantial number of cabinet and deputy ministers, members of various legislatures, cadres deployed to organs of state, party functionaries, and union officials are members of the South African Communist Party. Few journalists and business leaders like to talk about this, perhaps for fear of being labelled as McCarthyites. But the influence of communist ideology is greater than the actual numbers of card-carrying communists might suggest.

Key evidence of this is the formal adoption at ANC conferences of the strategy of bringing about a “national democratic revolution”. This is not merely sloganeering. It has been implemented. Cadre deployment is one component. A second is the use of affirmative action legislation to ensure that organs of state – and, increasingly, entities in the private sector - are demographically representative. A third is the expropriation of private property.

Capture of the state by the ruling party is intrinsic to communist ideology. That is why Luthuli House rules the roost. Extending powers of patronage is also essential, ensuring that a growing share of the population is dependent on remaining in the good books of the ruling party, thereby undermining democratic choice. “Transformation” of the judiciary is also an important objective, to ensure that revolutionary ideology is thwarted as little as possible in the courts.

Sometimes circumstances necessitate tactical retreats, such as the proposals for SAA and private power generation. But the overall thrust of policy remains unchanged.

Fortunately, however, South Africa is an open society. This means that the catastrophic consequences of ANC rule are exposed to the public gaze, as we are now seeing day in and day out. It also means that policy proposals can be resisted, delayed, or even watered down.

There is more scope for this than is usually realised. But it requires vigilance, lest a minor concession here and there obscure the bigger picture of a party hell bent on increasing and entrenching its powers.                

* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by clicking here or sending an SMS with your name to 32823. Each SMS costs R1. Ts and Cs apply.