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Politics, Covid-19 and the Lockdown

by Greg Mills and Ray Hartley

29 April 2020
    
“War,” wrote the strategist Carl von Clausewitz, is “the continuation of politics by different means.”

The Prussian general was arguing for the subordination of war as an instrument of policy to a political objective. He was arguing that war is not thus an irrational, nationalistic urge, but rather a rational action – “a continuation of politics” in which decisions are constrained or encouraged by an assessment of political benefits against military costs and losses.

Economic policy, too, is politics by other means. The relationship between the two -- the ‘political-economy’ – is about who gets what, when and how.

To understand the battle over the direction of South Africa’s political economy, it is vital to get a grip on the fault lines within the ANC, which has dominated the political stage.

These have often been characterised as a battle between “left” and “right” approaches to the economy, with the trade unions, the SACP and the left within the ANC pitted against what has been characterised as a conservative “right-wing”.

In this simplified analysis, South Africa has veered from left to right. There was the RDP (left) which was supplanted by Gear (right), which was in turn replaced by radical economic transformation (left).

This oversimplification has, unsurprisingly, been the bread and butter of populists who like to caricature opponents and demonise them. But is entirely useless as a serious analytical tool and is frequently at the heart of the failure to understand how South African politics is playing out. To properly understand the political-economy dynamic, you need to change perspective by taking a jump to the left, as it were.

What is characterised as “right” – former president Thabo Mbeki’s “conservative” approach to macro-economics particularly under the Growth, Employment and Redistribution (Gear) rubric was in fact, by global standards, a social-democratic framework worthy of the political centre.

Under Mbeki’s watch, social welfare expanded to become one of the largest – if not the largest – in the developing world, labour laws that protect unionised workers were of a stripe that the European left could only dream of. Mbeki calculated that, in order to make this social-democratic order sustainable, government would have to develop a macro-economic framework that attracted investment and managed debt tightly. Of course, the populists ignored the social-democratic gains and focussed on fiscal and financial management as if Mbeki were an African reiteration of Ronald Reagan or Margaret Thatcher.

What Mbeki’s financial management framework did – alongside the establishment of the Scorpions as a corruption-busting unit – was limit the space for the diversion of state resources to graft and patronage. This was not entirely achieved as the party’s local, provincial and national patronage networks continued to grow in this period.

Zuma was the canniest of Mbeki’s populist opponents. Projecting himself as the leader of a “radical economic transformation” revival, he punched the bible of greater state expenditure. So convincing was Zuma that normally scrupulously left-wing ideologues such as Blade Nzimande of the SACP and Zwelinzima Vavi of Cosatu, drank the JZ Kool Aid, pronouncing Zuma to be the reincarnation of Che Guevara, promising that the “tsunami” of revolution would soon hit South Africa’s shores.  

Zuma, of course, had no intention of transforming anything. His record is there in the raw: joblessness rocketed to new highs, state agencies lost the ability to deliver as ill-qualified cadres took over and a tide of lawlessness rose in which the plankton of patronage thrived. What he was really aiming for is now plain to see in all its glory – a state bereft of law enforcement and fiscal controls that could be captured and turned into a cash machine for corrupt criminals.

The ANC was itself transformed from a social-democratic party of the centre to a populist party of the left, shedding its middle-class support and dismaying its veterans who saw it losing its moral compass, such as it was. It was only when this new trajectory began to threaten the party’s electoral success, threatening the entire patronage network, that Zuma finally lost control.

Enter President Cyril Ramaphosa. When he took the ANC presidency – by a whisker despite (or because of?) Zuma’s decade of destruction – the party was a shambles. Without a programme other than to borrow and spend on cadres and cadre-enriching state-owned enterprises, it had been hollowed out.

Ramaphosa has made some strides towards correcting this by appointing new prosecution bosses to tackle corruption, but he still presided over a party where Zuma’s old cronies wanted a return to state capture and use the old populist caricatures invented by Zuma to demonise him and finance minister Tito Mboweni as “right-wing”. Rational politics had been on the backfoot since Zuma took office and it lingered into the Ramaphosa era as the party failed to cohere around a vision. Until now.

What the Covid-19 crisis has achieved is to hit pause on the tired populist narrative. In an existential crisis, rational leaders win public support and Ramaphosa has occupied this space with growing national approval.

What remains to be seen is whether or not he can – or wants to – extend this momentum to push the populists to the sidelines and engineer a return to a rational, centrist approach to the economy, about which has been strangely unenthusiastic, given his business credentials, until now.

The problem is that the crisis requires that he do the one thing that endangers a centrist social-democratic agenda – ramp up borrowing and spending which, in turn, reduces the scope for spending as debt repayments rise. But there are encouraging signs that Ramaphosa understands that if this to be sustainable, and that, as his advisor, Trudi Makhaya, has said, borrowing must be done while stoking up economic growth and restoring government revenues. They must hold the line or South Africa will plunge further into the abyss of debt and economic failure.

Clausewitz also wrote of the dangers of unexpected developments amidst the “fog of war” in the face of incomplete, suspect and sometimes plain wrong information and high levels of emotion. Such fear, hubris and excitement is easily amplified by the need for speed of action.

There are other clear and present dangers too. The risk of substitution of policy process and rationality by populism remains. The public clamour for greater grants, and doubling the R500 billion to R1 trillion, no matter the fiscal impact, poses such a danger.

The notion that countries can debt finance themselves to prosperity does not add up, as is the idea that increased government spending improves debt to GDP ratios since government would have to increase debt (and the interest burden) to fund spending and improve efficiencies in government to levels hitherto not seen.

Clausewitz’s contribution introduced philosophical thinking into military strategy. Things should, in today’s parlance, happen for a reason, and they should also not happen for a reason. That things happen, however, undoubtedly has an impact on those advocates for change and their primacy in shaping policy. There are always winners and losers.

The populists have another fresh arrow in their quiver – the large-scale deployment of the security forces to assist with social control during the lockdown.

Nowhere is this plainer than in the person of the strutting arrogance and buffoonery of the police minister, who appears to be fulfilling some long-held fantasy of total social control at the expense of the weakest members of society.

Absent the necessary constitutional and operational safeguards, such behaviour and the thinking behind it usually ends in praetorianism, and that usually ends badly.   

Covid-19 has afforded President Ramaphosa a rare opportunity to return the country to a rational discourse on the economy. The next step in this journey from populism to realism must address the conditions necessary for growth. Now, more than ever, it’s about getting the economics right.

The authors are with The Brenthurst Foundation, which this week produced the Discussion Paper “How to Turn Crisis into Opportunity: After Covid-19 – Choices for a Better South African Future”.

 


 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
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February/March 2020

 
 
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