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Archive for the category “economics”

Thabo Mbeki: Now it can be told

I’ve just been spending a very interesting hour watching the recording of the interview of Thabo Mbeki on Power FM, and he told lots of “now it can be told stories”. I think this link may lead to a recording of it, if you can afford the bandwidth. WATCH: In conversation with Thabo Mbeki:

Former President Thabo Mbeki sat down with Power FM chairman Given Mkhari for an interview.

Mbeki has warned against the term white monopoly capital.

“Let’s understand properly what is happening to the SA capitalist economy so that we can intervene to do the right thing.

“Because if we misdiagnose the problem, the cure is going to be wrong,” he said.

It was all quite fascinating, and because he was no longer in a position of power, or vying for support, he could cut the political obfuscation and tell it like it is.

He was asked how he could have had friendly relations with so many different world leaders, like Bush, Blair, Castro, Gaddafi and others. He said that it was in the interest of South Africa to remain on good terms with other countries even when we didn’t agree with them. He gave the example of George Bush phoning him before the invasion of Iraq in 2003, and saying that he didn’t want to invade, because he didn’t want to tell American families that their children had been killed over there, and he needed to be sure that Iraq didn’t have WMD. Thabo told him that South African teams had be there and submitted reports saying there were no WMD there, and Bush asked for assurance, and he promised to ensure that he got the report.

He then phoned Tony Blair, and asked him to ensure that Bush got the reports, but later found that Tony Blair had not done so, which suggests that the push for war was really coming from Blair, not Bush. Blair was not Bush’s poodle, it was the other way round. That was something we didn’t know at the time.

Juju Malema then mentioned that there were two things the EFF thought were important, corruption and land. The minority owned most of the land and something had to be done about that. And Thabo Mbeki said that it was important that we debate the issue, but he did not agree with the EFF’s view. He said that the Freedom Charter said that the land should belong to those who worked it, and who worked the land? He himself did not work the land, he lived in the city. Those who worked the land were farm workers, farm owners and and people living on communal land in the rural areas. He said he asked his mother why great tracts of land around the place where he grew up were lying fallow, and she said that they would need a tractor to plough it, but people could not afford a tractor or a plough. Also, even if they did plough it, back in the old days young boys used to herd the cattle to keep them away from the gardens, but now they were all in school, so the land would have to be fenced, and they could not afford that either.

Former President Thabo Mbeki

He mentioned Archbishop Thabo Makgoba’s autobiography, where he mentioned that the people had been driven off their ancestral land at Magoebaskloof in the 19th century, and there had been some land restitution, but the people simply fought over it, and eventually his own family had left the area. So it was important to discuss the question, but all these things needed to be considered.

He also gave a lesson in economics. Tagging “white” on to monopoly capital, as people in the ANC were currently doing, was meaningless. He said that if there were a thousand small enterprises, they would not be able to influence the market, but as capital tended to accumulate in fewer hands, and when the thousand were reduced to six, they would be able to influence the market, and that was monopoly capital. It was not necessarily everything in the hands of one company, even though that was what the word “monopoly” means, but a few companies big enough to influence the market. But if you looked at the JSE, how much of the investment could be described as “white”? Much was investment by pension funds for all workers, black and white.

As he was speaking I was thinking of IT firms like Google, Microsoft and Facebook, which are good examples of monopoly capital, and booksellers like Amazon.

It was good to hear him speak freed from the constraints of political office.The interviewer asked him, now that he is 75 years old, what advice he would give his 52-year-old self, taking office in 1994, and what mistakes were to be avoided. One of the most important piece of advice, he said, was to be more watchful for those who wanted political office for personal gain rather than to serve the people.

When he was president I thought we were lucky to have such a president. When I looked at the leaders of other countries — Tony Blair, George Bush, Vladimir Putin, Robert Mugabe and others — I thought we were much better off. And most of the present-day leaders are unspeakable, so I won’t mention their names.

On reading books you hate

Have you ever read a book you hate, right through, from beginning to end?

A waste of time, you may think. Toss it, before you waste any more time.

But this article explains why it is important to read books that you hate.

Why You Should Read Books You Hate – The New York Times:

Defensiveness makes you a better reader, a closer, more skeptical reader: a critic. Arguing with the author in your head forces you to gather opposing evidence. You may find yourself turning to other texts with determination, stowing away facts, fighting against the book at hand. You may find yourself developing a point of view.

But how do you know you’re going to hate a book before you’ve read it?

The first book I read that I was pretty sure I was going to hate was Atlas shrugged, by Ayn Rand. I had seen the book in a bookshop when I was a student in Pietermaritzburg, in about 1964. I picked it up and looked at the blurb — something about a man who had said he would stop the motor of the world, and did. I put it back on the shelf. Then, after a political meeting or demonstration of some sort, I was chatting to a fellow student who despised such things. I think it was a protest against the Bantu Laws Amendment Act, which would make life harder for black South Africans than it already was. He was doing a BSc in Zoology, and was into survival of the fittest and extended it to social Darwinism. He spoke about the philosophy of Ayn Rand, which sounded pretty unattractive to me.

A few years later, about 1970,  a work colleague was reading Atlas shrugged, and kept saying what a good book it was. So when he had finished it, I borrowed it, and after reading a couple of hundred pages told him that I didn’t like it. I didn’t like the characters, I didn’t like their lifestyle, I didn’t like their values, I didn’t like the style. He said, Ah, but it’s not about the quality of the writing, the thing that’s so good is the philosophy. I didn’t like the philosophy either, but I kept on reading, right to the end. That was partly because I knew that if I criticised it without having read it, he would dismiss my criticisms as mere ignorance.

The bloke who lent it to me was the third Ayn Rand fan I had met, and I thought that if this philosophy can get such a grip on people’s minds, I’d better find out more about it, so I went out and bought a book of essays by Ayn Rand and her associates, called Capitalism: the unknown ideal, in which she tried to do for capitalism what Marx and Engels had tried to do for socialism — turn it into a religion. And, far more than Marxian socialism, Ayn Rand’s capitalism was diametrically opposed to everything in the Christian faith. And the Neoliberalism that has dominated the world since about 1980 is largely a diluted form of Ayn Rand’s philosophy.

Being a sucker for punishment, I even read another novel by Ayn Rand, The Fountainhead, and a biography of her written by one of her disciples. The author of the article on reading books you hate apparently began with The Fountainhead, and his comments on that are worth reading too. Why You Should Read Books You Hate – The New York Times:

My taste for hate reading began with “The Fountainhead,” which I opened in a state of complete ignorance as bonus material for a college class on 20th-century architecture. I knew nothing of Ayn Rand or of objectivism. I thought it was a book about building things. I even showed it off to a French friend, an architect and a die-hard socialist, thinking he’d be impressed.

“How could you bring that into our house?” he asked in disgust. “But it’s about architecture,” I replied weakly. Or was it? Within pages, I found myself suffering at the hands of its tyrannical egomaniac of a protagonist, Howard Roark, forever plunging a fist into soil and holding forth. The lead female character, Dominique, who naturally took second place to the godlike Roark, kept striding across rooms in long, column-like gowns.

Still, I persisted. A hundred pages later, I was more of a French socialist than I’d ever been before or since. I finished every wretched page of “The Fountainhead” in alternating states of fury and despair, and when it was finally over, I tried to leave the vague echo of Dominique, stomping around in her evening gowns, behind. What stuck was the abiding knowledge that I was not, nor would I ever be, a libertarian.

Another book that I read, and also hated, was Interview with the Vampire by Ann Rice. At the time lots of people were discussing it online, and I thought I’d better read it just so I could know what they were talking about. I hated it even more than Ayn Rand’s books, and had to force myself to keep reading to the end. Yet another was The Da Vinci Code, though in that case I had already read the book on which the plot was based.

So yes, I think it is good sometimes to read books that you hate. It’s not a waste of time, and can give you a better idea of why you like the books you do.

The war drums beat louder and louder

The media — print, broadcast and social — seem to be filled with war propaganda these days, so much so that other things seem to be getting crowded out.

And I see more and more of my friends being sucked in to it and by it.

In the US election campaign, there seems to be a “more Russophobic than thou” contest, and some have been saying, apparently in all seriousness, that one of the things against Donald Trump as a US presidential candidate is that he isn’t as Russophobic as Hillary Clinton. I can think of plenty of reasons why Donald Trump would not be a good person to be president of the USA, but not being Russophobic enough isn’t one of them. Yet a lot of people do seem to think that is a serious obstacle.

Hillary Clinton has herself declared that her Number One Priority is to remove President Bashir al Assad of Syria. That calls to mind the fulminations of Alfred Lord Milner against President Paul Kruger of the ZAR, at the height of Jingoism in the 1890s. Jingoism seemed to go out of fashion briefly in the 1950s and 1960s, and for a few decades thereafter took the surreptitious form of neocolonialism, but now it is out of the closet with a vengeance.

A few of my friends on social media have been urging me, in all seriousness, to sign petitions calling for “no-fly zones” in Syria. They are people whom I have always regarded as being not without a degree of common sense, but the war drums seem to have driven the common sense right out of their heads. A few years ago a “no-fly zone” was declared over Libya, and the last state of that country is worse than the first.

My question to my friends who think “no-fly zones” are the answer is: why do those calling for a “no-fly zone in Syria not also call for one in Yemen too?

And secondly, who should enforce such a “no-fly zone”? Preferably a neutral party that doesn’t have a dog in that fight, like Uruguay, say, or Botswana. Do you think Russia, or the USA, or France, or the UK, or ISIS or any of the other groups muscling in on the Syrian civil war and the Yemen civil war would pay the slightest attention to even the combined air forces of Uruguay and Botswana?

Bashir al-Assad is not my idea of an admirable ruler, but in the last 20 years or so we have had a lot of propaganda about the need to remove people like Saddam Hussein in Iraq and Muammar Gaddafi in Libya, and those attempts turned out pretty disastrously, because even if they were villains, those who replaced them were worse villains. And still people like Hillary Clinton are promising to apply the same quack remedy to yet another country. It seems to be the policy of “The West” in general to replace secular rulers in the Middle East with militant Islamist groups, one of whose aims is to drive out all Christians and those who don’t adhere to their own peculiar brand of Islam.

Syrian Civil War. Syria - Red. Countries that support Syrian Government, Bluue. Countries that support Syrian rebels - Green.

Syrian Civil War. Syria – Red. Countries that support Syrian Government, Bluue. Countries that support Syrian rebels – Green.

Russia for a while acted with some restraint in Syria, but is now bombing with as much abandon as the rest of the belligerents, so has come down from the high moral ground and entered pot-and-kettle territory.

Half the countries of Western Europe are bombing and shelling Syria (or supporting those who do), and yet get all uptight when Syrian refugees arrive at their borders trying to get away from their bombs.

And then, as if all this wasn’t enough, along comes this exceptionally nasty piece of war-mongering journalism Queen in row over Putin ally’s visit | News | The Times & The Sunday Times:

The Queen is to host an audience for one of Vladimir Putin’s closest allies and a key supporter of Russia’s actions in Syria, prompting protests from MPs.

The royal reception is for Patriarch Kirill, head of the Russian Orthodox church, who arrives for his first UK visit next Saturday. MPs and a former senior government adviser have called it a “propaganda” trip from a churchman who has described Putin’s presidency as a “miracle of God”.

In July Kirill, 69, an alleged former KGB agent, also described Russia’s operations in Syria as “noble and honest”. Last month Britain’s UN representative accused…

Not that this is not one of those fake news sits. It’s not even The Sun. This is The Times, part of the “mainstream” media, one of the self-styled “quality” papers. And here they are trying to turn the church into a political football, wanting to treat the Patriarch of Moscow as badly, if not worse than President Zuma and the South African government treated the Dalai Lama.

What they don’t mention (but I learned from a priest who receuived an invitation to the event) is that the Patriarch was going to celebrate the anniversary of the Russian Church in London. The article seems calculated to stir up hatred against the church. I think there are laws in Britain against “hate speech”, and wonder if this kind or article is perhaps in breach of such laws. But whether or not that is the case, ity does seem that it is being used to beat the war drums louder.

My concern in all this is that people seem to be increasingly sucked into to war propaganda, and to swallow it quite uncritically. I’m not a fundi on Mioddle Eastern affairs, and I’ve never been to Syria, but in my no-doubt over simplifiend and even simplistic understanding, one thing stands out: the Western media, the Russian media and the Middle Eastern media all have vested interests in the conflict, and everything they say needs to be taken with a pinch of salt, and if possible verified independently.

But it seems to be that there are two main scenarios, and perhaps both are operating at the same time.

  1. There is a Sunni Shia conflict
  2. There is a conflict over gas and petroleum products.

President Bashir al Assad of Syria has the support of Shia groups in Syria, and those who support him, both locally and internationally, are either supporting Shia interests, or are perceived by otghers as doing so. These include such groups as Russia, Iran, and Hezbollah in Lebanon.

The West, Saudi Arabia and most of the Gulf states support Sunni Islam, and and so the conflict can be described, simplistically, as a Sunni-Shia conflict, with the West o9n  the Sunni side and Russia on the Shia side, and if the conflict keeps escalating there is a danger that it could end up as World War 3.

Tjhere are also economic interests involved, especially as they relate to gas pipelines between the Middle East and Europe, which pass, or are planned to pass, through Syria. Those opposed to Bashir al Assad may have mixed motives, but among them could be that he leans towards Shia and he may oppose their favourite pipeline project. And those who prop him up may have motives that include his support for their pipeline project, and oppiosition to rival projects that may threaten theirs. For more on this, see here: Syrian war explainer: Is it all about a gas pipeline?. And no, I din’t believe it’s all about the pipelines, but I do believe that some of it may be. Take this article with just as big a pinch of salt as any other.

And as a reminder, here’s a kind of timeline of the conflict: Syria: The story of the conflict – BBC News:

More than 250,000 Syrians have lost their lives in four-and-a-half years of armed conflict, which began with anti-government protests before escalating into a full-scale civil war. More than 11 million others have been forced from their homes as forces loyal to President Bashar al-Assad and those opposed to his rule battle each other – as well as jihadist militants from so-called Islamic State.

And it too needs to be filtered for bias.

Zuma Must Fall

No, I’m not going to add my own little rant to all the others explaining why Zuma’s presidency is bad for the country. My 2c worth is about the #ZumaMustFall movement, rather than about Zuma himself.

Zuma’s shortcomings have been explained far more eloquently by others than by anything I can say — by Barney Pityana here, and by Zwelinzima Vavi here. As Zwelinzima Vavi puts it,

We are on a rollercoaster without a driver, and we are about to come off the rails! The captains of the ship of state are about to run aground, and are completely discredited and enjoy no credibility or moral authority with those they are supposed to protect and represent

HumptyZumaOne interesting thing about the #ZumaMustFall movement is that it is not driven by opposition parties trying to make political capital out of Zuma’s latest blunder. Their voices have been drowned out by a clamour from all kinds of people, mainly on social media like Twitter and Facebook. Many of these voices have been from people who have hitherto supported the ANC, and who played a significant part in the freedom struggle. It is becoming clearer to many that the ANC today is not the old ANC of Mandela, Tambo and Sisulu. The credo of the old ANC was The People Shall Govern. The credo of the new ANC of the tenderpreneurs is The Guptas shall govern.

This may look like the beginning of a popular movement, but we need to remember that the Twitterati do not represent the broad masses of the people. The Twitterati are predominantly middle class, and it is middle-class people who are most sensitive to the immediate effects of Zuma’s blunder, such as the fall in the value of the Rand, which has been almost as spectacular as P.W. Botha’s Rubicon Rand of 30 years ago.

The middle class are aware of these things, because they know that it will increase the cost of their next overseas holiday, or the cost of imported goods that they were planning to buy — the new tablet computer or home theatre or whatever.

Because of this, some have said that the only people who will be affected by the economic fallout from this are white capitalists, and that the rest of the people need not worry. But over the next few months we will see how it could begin to affect others.

The intelligentsia are already aware of it because the victory they gained a few short months ago from the #FeesMustFall movement can be wiped out because milliards of Rand have vanished from the economy within the space of a day or two.

The working class may became aware of it when the price of petrol rises, and taxi fares increase, but that will be sufficiently long after Zuma’s blunder for the cause and effect link to be less obvious. Perhaps it will need some rousing populist rhetoric from Julius Malema and Co to make that connection clear.

Perhaps the last people to become aware of it will be the rural peasants. The benefits of democracy may have taken longest to trickle down to them, but on the positive side the disasters take longer to trickle down too.

I suspect that something similar will happen here to what happened in Zimbabwe 15-20 years ago. There the immediate trigger was the eagerness of their rulers to intervene in the Congo civil war. Foreign military adventures are expensive, and caused foreign exchange reserves to fall. That meant there was not enough money to buy fuel, and rationing was introduced. Businesses that depended on exports began to fold, and unemployment increased. The working class revolted and formed the MDC, and Zanu found its electoral support dwindling in a referendum which they lost. To prevent the losses spreading to the rural areas, they confiscated land from commercial farmers and redistributed it to peasants so they would continue to support them (and to party cronies, of course). The commercial farms produced mainly export crops, so foreign exchange reserves dwindled still further, and it became a vicious circle.

The same thing could happen here, if the value of the Rand drops further, the price of fuel will rise, and rationing may have to be introduced. Transport costs, for both goods and people, will rise, and a similar vicious circle could develop here. And the working class here could become aware of what had caused the problem, as they did in Zimbabwe. But bear in mind that millions of Zimbabweans voted with their feet and came to South Africa. Perhaps they can go back to Zimbabwe, but where can the South Africans go?

Dr Azar Jammine, one of the country’s top economists, explains more of the possible economic consequences of Zuma’s bluder in an article here. Dr Jammine also explains why he thinks that the populist economics proposed by the Economic Freedom Fighters (EFF) will not be a solution either, but the ANC has never had a populist economic policy; it has been neoliberal, and indeed thoroughly Thatcherist for the last 15 years at least, as this article by Andile Mngxitama points out.[1]

I don’t think the ANC has been quite as bad as Andile Mngxitama suggests, though. It did not suddenly change overnight (even though the abandonment of the RDP may have given that impression). But people like Kader Asmal worked very hard to bring clean water to every community, and there are many people who have continued to support similar ideals. If there weren’t, our country would be in a much worse state. Such people have sometimes been sidelined and displaced by the new tenderpreneur class, but many of them are still around, and still working for the ideals that the ANC, at its best, was fighting for 25 years ago. So perhaps a few of them may take courage from recent events, as this article suggests — Zuma’s opponents have smelled blood | News24:

There is a possibility that we would look back at the Nene/Van Rooyen debacle in the not so distant future and conclude that although our economy had lost billions through Zuma’s bizarre decision, it represented a turning point. It broke the back of Zuma’s power in the ANC and gave the top brass in the Cabinet and Luthuli House their mojo back. It is hard to see how Zuma can ever again make damaging decisions or statements without being corrected by his party.

I’m not exactly enthralled by the thought of Cyril Ramaphosa being our next president — he has too much blood on his hands after Marikana — but I don’t think he would be quite as recklessly irresponsible.


Notes

[1] My own view of populist, neoliberal and socialist economics is not really relevant to this article, and in any case I’m not an economist, but if anyone was wondering, I’m against the privatisation mania of neoliberal economics, and I’m against the nationalisation mania of populist economics.

  • I believe that some things should never be nationalised: mining and manufacturing, for example.
  • I believe that some things should never be privatised: e.g. transport and communications infrastructure (roads, railways, posts and telecommunications). Privatised toll roads are an abomination. Deregulated heavy goods transport leads to potholes and disused railway lines etc.
  • Other things may be a mixture of one or the other — education, farming, wholesale and retail trade, service industries, health care, banking etc. My preference for many of those sectors is private enterprise socialism — building societies and credit unions for banking, for example, cooperatives for farming and retail trade, and so on.

 

 

 

Enough is enough: it’s time for Greece to leave the Eurozone

Enough is enough. It’s time for Greece to leave the Eurozone and start issuing its own currency.

Greek crisis: surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras | Business | The Guardian:

European leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc.

A weekend of high tension that threatened to break Europe in two climaxed on Sunday night at a summit of eurozone leaders in Brussels where the German chancellor, Angela Merkel, and President François Hollande of France presented Greece’s radical prime minister, Alexis Tsipras, with an ultimatum.

Someone pointed out that the problem is that Germany has too many lawyers and not enough economists, and this leads to a different mindset. Several people have pointed this out, and it is summed up in this article: A Lawyer’s Mindset Where An Economist’s Is Needed? – Forbes:

A Twitter correspondent pointed out a simple fact that makes Schäuble’s inflexibility in negotiations with Varoufakis explicable: though he is a Minister of Finance, his PhD is in law.

So is he implicitly approaching these negotiations as a lawyer would? Because from that point of view, what the Greeks are trying to do is to renege on a contract. And for a lawyer, changing the terms of a contract after you have signed it is a no deal. It’s either carry out the contract, or I’ll sue.

Varoufakis, of course, is approaching the negotiations as an economist. From his point of view, the terms of the Troika’s package are a set of economic policies that have failed. And if policies have failed, the sensible economist tries different ones.

And some have pointed out that this difference in approach is rooted in theology: The moral theology of the Greek crisis – Spiritual Politics:

… behind the moral standoff is a difference in approaches to human error that has divided Eastern and Western Christianity for centuries. It’s the difference between the Orthodox idea of economia and the Augustinian conviction that either it’s right or God brings the hammer down.

Economia recognizes that while all warfare is bad, sometime people have to fight and then get to repent for it. Augustinianism sees wars as either just or unjust. Economia recognizes that while divorce is bad, sometimes a husband and wife have to split up and they then get to remarry (somberly, no more than twice) and remain Christians in good standing. Augustinianism says no to divorce, and no to communion for those who remarry.

The current impasse seems to show that the differences between these two approaches are irreconcilable, and perhaps it is time for a divorce.

The most sensible suggestion that I have seen comes from someone known to me only as “Whiskers”, who said:

Greece could (should, almost certainly will) leave the Euro and revert
to its own currency, without leaving the European Union. Britain never
joined the Euro but is otherwise a full member of the EU – so when world
financial systems began to go haywire at least Britain retained control
over its own currency, including exchange rates and money supply.
Greece, starting from a much weaker base, surrendered such control and
is now unable to manage its own affairs.

Greece is not a poor country, what they lack at present is not wealth
but currency – they have literally run out of banknotes (not helped by
people hoarding as many as they can at home) and the Euro rules mean
they can’t print any more; they have to get them from the Euro Central
Bank which can’t do it without the agreement of all the other countries
which belong to the Euro. Which is fair enough, as the supply of Euros
affects all their economies too not just the Greek one.

The obvious and sensible thing for Greece to do is therefore to leave
the Euro and start controlling its own currency again. This will solve
the ‘money supply’ problem almost overnight – but deciding the exchange
rate to the Euro will be one of the first things the Greek politicians
will have to do, and is something for which they cannot escape
responsibility by blaming anyone else (but they’ll try to do that too).
Greeks will then be able to borrow money again – but not at Euro
interest rates!

Leaving the European Union would be a much bigger decision, and probably
not a good idea for Greece as they would instantly lose nearly all of
what is at present their ‘home’ market (and the freedom to seek work
anywhere in the EU).

Celebrations after the anti-austerity referendum in Athens (Photo by Julia Bridget Hayes)

Celebrations after the anti-austerity referendum in Athens (Photo by Julia Bridget Hayes)

What follows, however, is anyone’s guess. Perhaps it could form the scenario for a science fiction novel.

In September 2015 Greece left the Eurozone, and the new drachma, based originally on IOUs issued to pay civil servants, though it started on par with the Euro, depreciated rapidly in value. The Greek government, driven by internally rather than externally imposed austerity, was forced to cut military expenditure, as imported military hardware became too expensive, and thus failed to meet its Nato commitments.

In April 2016, at the instigation of Germany and France, Greece was expelled from Nato, which encouraged Turkey to invade and occupy the Greek islands of Lesvos, Chios, Samos and Rhodes in May 2016.

Encouraged by the lack of resistance, in June 2016 Turkish forces invaded eastern Thrace, and defeated Greek forces at the battle of Xanthi. This opened the way for ISIS agents to stir up the Muslim population to turn against their neighbours, and ISIS thus established control of most of the towns and villages in the region outside Xanthi itself.

France and Germany assisted Turkey, their Nato ally, with arms and other material to defeat ISIS, but most of these were used to make further conquests in Northern Greece…

 

Pre-1994 — or pre-Thatcherist?

In a somewhat disingenuous article, My Broadband accuses Zumas government of returning to a pre-1994 structuring of Posts and Telecommunications:

Zuma going full circle – from apartheid telecoms and back:

Unbeknownst to many people, Zuma returned to the structure used under the apartheid government, which had a Department of Communications and a Department of Post and Telecommunications.

The cabinet of FW de Klerk, which ran South Africa from 16 August 1989 to 11 May 1994, had Roelf Meyer as minister of communications and Piet Welgemoed as minister of post and telecommunication.

Zuma’s decision to go back to the pre-1994 structure is seen as a mistake by many commentators – and they have a point.

In South Africa, telecommunications services were operated by the South African Post Office until 1991. It therefore made sense to combine telecommunications and postal services into one ministry.

However, Telkom became a public company in 1991, which meant that it started to operate independently from the SA Post Office.

This is rather misleading, and the give-away is there in the text — it was F.W. de Klerk’s National Party government that privatised Telkom back in 1991, and the ANC government inherited that structure in 1994. The previous structure was not a specifically apartheid one, but was found in most Commonwealth countries before the Thatcher-era privatisation mania.

telephone-5579776Back in the 19th century post offices handled the delivery of written communications, whether physically, by means of hard copy, or electrically, by means of telegraphs. These were complementary, and the services were integrated. Later telephones added voice communications to the mix but in many cases the same infrastructure was used.

Was the apartheid between posts and telecommunications brought about by privatisation a good thing? Some, like the people at My Broadband, might argue that it is, but don’t try to muddy the issue by pretending that the integration had anything to do with apartheid in the past.

postboxThere are similar problems when it comes to moving people, rather than moving words and pictures. An integrated bus, train, and mini-bus taxi public transport system would arguably be of greater benefit to the travelling public. But such a thing meets opposition from vested interests in the privatised taxi industry, and those vested interests are sometimes prepared to use hitmen to oppose integration, where as those with vested interests in privatised telecommunications services have not gone as far as that. But in principle the issues are the same.

Economist explains why whites earn more | Fin24

White people earning six times more than blacks, screamed the headlines after the release of the 2011 census.

I do not doubt that whites earn more than blacks – although in a way it is too simplistic to state it as such.

The 2011 census provides several reasons why white households earn six times more than black households.

One can explore the reason in two parts. Firstly on an individual basis where whites earn on average about four times more than their fellow black South Africans. The second part has to do with household dynamics and why it is that White households – again on average – earn six times more as households than black household do.

via Economist explains why whites earn more | Fin24.

There is also more to this than the article allows for.

What would be really interesting would be to compare what and black earnings are at the toip and middle management level.

I know of at least one instance where a white person, who was earning a very good salary, left, and was replaced by a black person, who demanded, and got, a salary a third higher than his white predecessor, simply because he was black, not because he was better qualified.

The difference in pay could have funded three entry-level positions for young people, most, or all of whom would probably have been black.

Now this is just one example, and I’m not sure how widespread this is, but economists somewhere perhaps have figures to show what is actually happening.

But I have a suspicion that because of BEE, there is a greater demand for black people in middle and top management than there is for white people, and by the law of supply and demand that means that black people can command higher salaries at that level for the same job.

And that is why BEE is not Black Economic Empowerment, but Black Elite Enrichment, because if the black guy had been satisfied with the same salary as his white counterpart, three more young people could have been employed.

We don’t need a youth wage subsidy, we need less greed in top management.

The problem is not primarily one of race, although that may play a part. It is primarily one of class.

 

 

How you too can participate in the financial crisis

About 15 (or was it 25?) years ago many building societies conned their members into agreeing to them turning themselves into banks. Was this the law of unintended consequences in action? Oh the joys of capitalism!

Bishop Alan’s Blog: HBOS: Personalised Credit Crunch:

Welcome to the share offer that enables you to have your very own credit crunch at home this Christmas. As a student I earned some holiday money and put it in the building society. Then the building society became a bank and my shares were converted into, er, more shares… Imagine my joy, then to be sent an “important document” this morning that “required my immediate attention.” It’s my opportunity to bail the bank out by taking them up on a very special offer — They are willing to flog me 261 shares, as a special favour, at only 113.6 pence a share. Here comes fate, tapping me on the shoulder, offering me a career as a major capitalist, and all for only £296-49! Deep Joy!

Brooklyn Mall — where shopping is a virtue

My wife spotted this advertisement for Brooklyn Mall in the local newspaper today, and we pondered on the slogan. Does it mean anything? Can it mean anything?

The only thing it conveys to me is that whoever wrote that slogan has a very twisted set of values.

I usually shop at Brooklyn Mall, which is 8km from where I live.

The reason I shop there is not that shopping is a virtue, but that it has most of the shops I am interested in, and it also has 2 hours free parking. Free parking is a virtue. Shopping is (sometimes) a necessity. One doesn’t make a virtue of necessity. The Brooklyn Mall web site, unlike their newspaper ads, at least displays their chief virtue.

BrooklynMall

There are other shopping centres that are about the same distance from us as Brooklyn Mall. I used to go to one of them regularly, but then they revamped their parking and started to charge for it, so you had to pay even if you visited one shop and found they didn’t have what you wanted. So I stopped going there, and began to go to Brooklyn Mall instead. And even when the original shopping centre reverted to free parking (perhaps others thought as I did, and they noticed the fall-off in custom), I kept going to Brooklyn Mall out of habit.

But that stupid slogan might make me change my habits.

 

Youth Wage Subsidy

There has been a proposal for a youth wage subsidy in  some quarters. Those who are touting this idea say that it will help to solve the problem of youth unemployment.

The Congress of South African Trade Unions (Cosatu) opposes the idea, and has set out its reasons in a paper, which I think all who are interested in the topic should read.

I think that this kind of proposal needs to be considered very carefully. History can teach us something here. If the Speenhamland System had a better record, I might say that a youth wage subsidy was worth considering,  but it didn’t. Actually, if one applied the Speenhamland System in South Africa, it would be more akin to a farm labour subsidy. If the striking farm workers at De Doorns, and others in a similar position, were to have their wages subsidised, it would be a closer parallel, and some of the same constraints apply: if the wages of farm labourers are increased, the money must come from somewhere, and the most obvious place for it to come from is an increase in the price of agricultural produce, which would hit the unemployed poor hardest.

The question of a youth wage subsidy is slightly different, especiqally in urban areas.

One of the things that prevents young people being employed in entry positions in many firms and organisaqtions is that the salary bill is heavily weighted towards top management. In other words, if the bosses weren’t overpaid, there would be more money to employ young people at entry-level positions. So what is presented as a proposal for a “youth wage subsidy” could just as easily be seen as a “fat cat management income subsidy”. Mrs Buthelezi at Nkwalini would be  paying 15c in the Rand on her groceries  in part to subidise the six and seven figure salaries of top management in Gauteng.

This is exacerbated by the so-called Black Economic Empowerment (BEE) policy. Among other things, this requires firms to have a certain proportion of black people at top management level. This means that black managers can command (and get) higher remuneration than their white counterparts. So a black person who replaces a white person at top management will be paid more — a lot more — than their predecessor. And that money could have been used to employ several young people at entry level. So BEE could more accurately be termed Black Elite Enrichment.

That does not mean that the white management people were or are underpaid. Far from it. The income disparity between rich and poor in South Africa is one of the biggest in the world, and is still growing, regardless of race. And a youth wage subsidy would simply exacerbate that.

I’m no professional economist, so the views I have expressed are those of an ordinary citizen. Well, a deacon is also supposed to be an “economist” of sorts, and the first deacons practised ekonomia. So I have a proposal.

I would like to see a gathering of Christian economists and Christian theologians getting together to discuss this and other related problems, to try to formulate a possible Christian response. Two that I know personally, who are concered about these things, are Dr Azar Jammine and Prof Tinyiko Maluleke, and I am sure that there are several others. Is there anyone else who thinks such a meeting might be useful?

 

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