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<p>Andile Mngxitama, leader of Black First Land First is of the opinion that BLF had been &#8220;robbed&#8221;. He sees the ANC, DA and EFF as a single party representing White Monopoly Capital in Parliament. He spoke to Karabo Letlahtlha at the IEC.</p>


BLF will continue to make a noise, in parliament or not

<p>South African President Jacob Zuma reiterated a call on Monday for radical reforms to shift the balance of “monopoly” economic power away from whites who dominated under apartheid, saying without such change blacks would stay poor for a long time.</p>
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<p data-reactid="40">He made the remarks, reiterating a staple criticism leveled by his ruling ANC about South Africa’s economy, against the backdrop of widespread allegations of corruption against Zuma and his friends, the Indian-born Gupta brothers.</p>
<p data-reactid="42">Zuma was responding to a question about his role as an enemy of “white capital”, during an interview with the ANN7 news network, which was founded by the Guptas. Zuma and the Guptas have denied any wrongdoing.</p>
<p>“I don’t know why there is a debate in fact. Because there is a monopoly capital and in South Africa it is white &#8230; because of our history, it does have a color. It is white,” Zuma, who steps down as head of the ANC in December but can remain head of state until elections due in 2019, said.</p>
<p data-reactid="44">“Companies that dominate in the mines, there are not many &#8230; You will find the same companies in charge. That means they are monopolizing the economy and they’re not black,” he said.</p>
<p data-reactid="45">The Chamber of Mines in the world’s top platinum producer says that in 2016, 39 percent of the sector was owned by “historically disadvantaged South Africans” &#8211; meaning non-whites.</p>
<p data-reactid="46">Zuma said the policy of “radical economic transformation,” which has also seen moves to change the constitution to allow for the expropriation of land for redistribution to landless blacks, was needed to “correct the past.”</p>
<p data-reactid="47">“The ANC must follow this policy because if you don‘t, we are going to stay in poverty, in inequality, for a long time.”</p>
<p data-reactid="48">The frontrunners to replace Zuma at the helm of the ANC are Deputy President Cyril Ramaphosa, a trade unionist who amassed a fortune in the world of business, and Nkosazana Dlamini-Zuma, former chair of the African Union and Zuma’s ex-wife.</p>
<p data-reactid="49">Ramaphosa is viewed more favourably by foreign investors, who help cover the country’s deficits. Many of them are unsettled by Dlamini-Zuma’s calls to radically redistribute wealth and her perceived links to her former husband.</p>
<p>In a separate interview on state broadcaster SABC, ANC Secretary General Gwede Mantashe said “state capture is a reality,” referring to allegations that the Guptas and others have undue political influence with access to state resources and contracts under Zuma.</p>
<p>Mantashe is regarded as an ally of Ramaphosa with ties that go back to the 1980s when they were involved in the founding of the National Union of Mineworkers.</p>
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<p class="Attribution_content_27_rw" data-reactid="52">Reporting by Ed Stoddard, Editing by William Maclean</p>
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South Africa’s Zuma again denounces “monopoly” white economic power

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<p>With a country in recession and  unemployment on the rise journalists crammed into Luthuli House to hear what answers the ANC NEC had  after meeting for a four day lekgotla, which coincidentally was the current Leaderships last such briefing.</p>


ANC NEC lekgotla- Did it move the needle?

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<p>The South African Communist Party is taking legal action against President Zuma over his controversial cabinet reshuffle in March. The party&#8217;s second Deputy Secretary General Solly Mapaila said Zuma lied about his decision to fire, amongst others,.</p>


SACP to contest future elections independently

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<p>President Jacob Zuma has apparently been offered an amnesty package of R2 billion to step down from office. The agreement would also see Zuma cleared of his more than 700 criminal charges. That&#8217;s according to The Daily Maverick.</p>


Zuma offered R2bn to step down – reports

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<p>Former President Thabo Mbeki&#8217;s conversation with Given Mukhari continues to trend on social media in South Africa. Mbeki was responding to a variety of issues last night including South Africa&#8217;s borrowing appetite in 1996.</p>


Mbeki warns against use of ‘white monopoly capital’ slogan

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<p>Eradicating unemployment in South Africa is going to be a big challenge. These are the views of former state President Thabo Mbeki, who was speaking at an event hosted by Power FM in Sandton yesterday.</p>


Eradicating unemployment in SA a huge challenge – Mbeki

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<p>South Africa Finance Minister Malusi Gigaba said government cannot give free bailouts to state owned companies; and called for good corporate governance to improve performance of SOEs.</p>


SOEs must show improved performance – Malusi Gigaba

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<p>South Africa&#8217;s Minister of Finance Malusi Gigaba spoke on his relationship with the Gupta family and his name being linked to the Gupta leaked e-mails.</p>


Malusi Gigaba dissociates his name from Gupta leaks

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<p>South Africa&#8217;s Minister of Finance Malusi Gigaba gives his stance on the importance of the independence of the South African Reserve Bank highlighting the role of the monetary policy during a receding economy.</p>


Malusi Gigaba reaffirms commitment to reserve bank’s independence

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<p>First on CNBC Africa: SA’s Finance Minister Malusi Gigaba discusses recession, the inclusive growth action plan, state-owned enterprises and dealing with corruption.</p>


Minister Malusi Gigaba’s plan to resuscitate the economy

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<p>Politics has been a major driver of markets in recent years &#8211; both at home and abroad. This is not expected to change anytime soon. We are now going to get deeper insights into the ANC&#8217;s policy and strategy as it prepares to elect its next President.</p>


Jessie Duarte talks ANC policy, strategy ahead of elective conference

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<p>Ian Cruickshanks, Chief Economist, Centre for Risk Analysis joins CNBC Africa to discuss the economic week ahead.</p>


Economic week ahead

<p>The South African insurance industry is an oligopoly. That is, a market structure similar to a monopoly, but in which a small number of companies has the majority of market share. This is not the creation of faceless “white monopoly capital”.</p>
<p>It is an entirely predictable response to the intrusive and extensive overreach of muddled Government agencies in their quest for control of the industry. Through its regulatory exuberance, the State has curtailed industry growth, and thus capital and job creation.</p>
<p>If the industry is to grow at all in the future, it needs to welcome and enable new entrants in radically new ways. However, the current path that we are on, especially the impending “Twin Peaks” changes to legislation and the unproven Retail Distribution Review (RDR), will further limit new entrants and make it all but impossible for existing insurers to transform and diversify. Instead, one should expect more consolidation, greater exclusivity, and more oligopoly.</p>
<h3>Monolithic mindset of rigid control</h3>
<p>Contrary to the popular political view, the apparent lack of industry transformation is therefore not due to intransigence on the part of the owners of existing insurance companies or the lack of entrepreneurial drive from previously disadvantaged persons to set up new insurance enterprises more reflective of our demographics. Instead, the current regulatory and legislative environment (as set out in more recent and pending insurance legislation and the inscrutable Twin Peaks idea) favours large-scale consolidation of existing insurers, making transformation and future inclusive growth highly unlikely. It creates and nurtures a monolithic mindset where everything must be rigidly controlled and where innovation and flexibility is severely subjugated to the power of authoritarian bureaucrats.</p>
<p>With most premiums paid going to no more than four or five dominant insurers, the rest of the insurers active in the market are relegated to a minor league. Skimming through the list of 98 Short-term insurers on the FBS’s website is an interesting exercise. Once you eliminate the insurers owned by other major financial institutions, like the Banks and other Insurers (for instance, Santam owns several smaller licences), the four or five State-owned ones and the ones that are there but not active (First Central, saXum), you are left with a small number of smaller “independent” operators. The position is exacerbated by constant consolidation as smaller underwriters and underwriting agencies are absorbed into existing insurers due to the impenetrability of the ever-increasing and invasive regulations imposed upon them.</p>
<p>A generation ago, several of the bigger insurers in South Africa were created by entrepreneurs, and several came from intermediaries expanding their reach into becoming insurers. Hollard, and Auto and General come to mind. I am willing to bet though, that hardly any such Greenfields operations have been created in the decades since the advent of FAIS, itself one of the most expensive and least successful Acts in our country’s history.</p>
<h3>So why is it so difficult to set up an insurance company?</h3>
<p>A cursory glance at current and proposed legislation is instructive:</p>
<p>Firstly, you need great gobs of capital. Ironically, no capital is in fact necessary to operate an insurer. When expenses, claims, and reinsurance costs are paid from written premiums, no capital is utilised. The capital requirements are there merely to cover the possibility that things go wrong.</p>
<p>The latest iteration of the experimental “Solvency Assessment and Management (“SAM”) regime for insurer capitalisation goes far beyond the simple solvency measures applied with almost 100% global success over the past 100 years. No longer will entrepreneurs need the traditional simple percentage of earned premium as capital, but the Regulator will now impose an additional minimum capital base (money in the bank) of north of many tens of millions of Rand &#8211; and that is before the entrepreneur has provided a single cent of insurance cover. He or she will also need additional capital on top of that to cover their expenses as well as the operational risk.</p>
<p>No single entity may own more than 25% of the insurer without the Regulator’s personal consent, and almost certainly not any individual with that level of shareholding. Institutional shareholding is all that seems permissible and funding will likely have to be spread over several of those. That requirement specifically excludes any potential financial industrialists, let alone Black candidates essential to the transformation agenda.</p>
<p>In addition, entrepreneurs have to lodge a five-year detailed business plan for regulatory approval, including operational expenses, underwriting standards, claims policy and reinsurance facilities. They must agree to abide by a plethora of often inexplicable regulation on market conduct and convince the Regulator that they have competent management and staff of “fit and proper” quality (read “educated, long-experienced and skilled”). Again, all of this must be in place before a single policy is issued. Other skills also need to be on tap, such as actuaries and lawyers to monitor compliance with both the law and the ever-changing regulation.</p>
<h3>You need deep pockets and strong legal skills to play this game</h3>
<p>Insurance intermediaries are likewise subject to regulations that prevent them from easily setting up new businesses. Besides the innumerable laws and regulations that all small and medium businesses are subject to, insurance intermediaries are pressurised by intrusive protocols that determine their income (through commission regulation), their service levels and their market practices. Their employees need to be conversant with the minutiae of the regulations and laws as well as the extent and implication of the policies that they sell. If they do not pass stringent Regulatory examinations on these matters they will lose their jobs.</p>
<p>Economists speak of “Barriers to Entry” when they consider aspects that prevent new entrants into an industry from creating new participants in a market. Whilst not overtly protectionist, regulations frequently shelter current operators from new competitors. In the South African context therefore, it is doubtful whether any real transformation could possibly take place in terms of ownership or entrepreneurship for many decades to come.</p>
<p>Assuming for a moment that the current enthusiasm for “radical transformation” could lead to real change and the inclusive growth that is desired, how would that be achieved? A radical solution in the insurance industry would be for Government to take the following steps <em>inter alia</em>:</p>
<p>&#8211;     Appreciate firstly that the insurance industry has the potential to enable small businesses and people to prosper by providing security against risk. Not every risk needs a major conglomerate to underwrite it;</p>
<p>&#8211;     Recognise that the emerging market may need products beyond funeral and micro-insurance, and support in getting insurance concomitant solutions;</p>
<p>&#8211;     Review the capital requirements for new insurers to a more risk-based approach. This may include setting up a fund for possible failures instead of relying on capricious regulators and defective “Twin Peaks” type regulation in particular;</p>
<p>&#8211;     Adopt a more benevolent and supportive regulatory approach to small and medium intermediaries. New (Black) entrepreneurs will come from this segment of the market and will employ people in areas that the current big operators cannot service and those jobs are what are sorely needed;</p>
<p>&#8211;     Admit that the current bureaucratic regulatory environment is not suited to the national need to democratise our economy. We need South African solutions for South African problems, and the global developed economies are not equipped to advise us on how to achieve that;</p>
<p>&#8211;     Abandon the notion of a state-owned insurer. This will merely reduce the economic space for transformation of the insurance industry into a broad-based supplier of risk management solutions, funded by willing private sector investors.</p>
<p>If this is not done, politicians must come to terms with the fact that the South African insurance industry has been forced by non-economic, bureaucratic and political forces to become an untransformed oligopoly, the result of<strong> </strong>overreach by dogmatic civil servants intent on achieving hegemony of control over all aspects of our economy. If the industry is to grow and transform at all, new entrants need to be enabled in radically new ways. The path that we have been on since 2002, including RDR and the proposed “Twin Peaks” regulatory architecture, will greatly limit new entrants and make it ever more difficult for existing insurers and intermediaries to diversify. All that may be expected under the current and pending regime is yet more consolidation and exclusivity.</p>
<p><em><strong>Author:</strong> Dr Gerrit Sandrock is a Director of several short-term insurance related enterprises.  He writes in his personal capacity. </em></p>


Op-Ed: Radical economic transformation hobbled by intrusive & excessive regulation in insurance industry

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<p>On the side-lines of the African National Congress&#8217; six day policy conference, CNBC Africa&#8217;s Aviwe Mtila caught up with Aubrey Mashiqi for a quick analysis of the whole conference and an explanation of the economic recommendations.</p>


Political Analyst Aubrey Mashiqi on ANC policy conference

<p>Murray Rothbard, economist and political philosopher, wrote in an essay that there is nothing wrong with being ignorant of economics, given the science’s specialised and often complex nature. However, Rothbard noted, “it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”</p>
<p>In a country facing dire economic prospects like South Africa, it is always important to return to basic principles. For this, Occam’s Razor – the simplest explanation is usually correct – is a useful rule of thumb, but it is one that has long been abandoned. Nowadays it appears that there is only one accepted ‘economic’ theory: government intervention will solve the problem.</p>
<p>This nation-wide notion has come about after years of us absorbing frequently-sounded mantra and legitimising pseudo-economics. Our economic growth and stability have suffered consequently.</p>
<h3>Accepted truisms</h3>
<p>For example, a dominant meme is that workers are being ‘exploited’ by employers. This is accepted as a truism without further contemplation.</p>
<p>Marxists believe in the so-called “labour” and “surplus” theories of value. Taken together, these theories dictate that the value of a product is determined by the labour of the producer (the worker), yet the capitalist pays the worker only a subsistence wage. The difference between the “real” value of the product and the wage the worker earns is “surplus” value, which the capitalist keeps for himself. In other words, workers are not paid their fair share and their greedy capitalist bosses keep the bulk of the loot – and thus exploitation is taking place.</p>
<p>These Marxist theories are false – objectively so – and no sincere economist, perhaps excluding some academic economists, would say otherwise. Value is assuredly not determined by the labour put into a product. An individual may spend a month assembling a rickety chair, yet it is the stable, mass-produced chair that will fetch a higher price on the market. Consumers pay for the product they believe is worth their money, regardless of how much labour effort was put into the production. Furthermore, labour often plays a small role in determining the price of a good or service, with the cost of machinery, overheads, and management also playing a decisive role.</p>
<h3>Water in the desert scenario</h3>
<p>This is based on the principle of value subjectivity, which is illustrated well by the ‘water in the desert’ scenario. If someone who has been stranded in the desert for days comes across two large containers, one containing water and the other blocks of gold, which is more valuable? In most cases (but this is not guaranteed, due to the subjectivity of value), the man in the desert will choose to carry the water with him. Gold is not objectively more valuable than water, as value is in the eye of the beholder.</p>
<p>The “labour” and “surplus” theories of value are drops in an ocean of pseudo-economic fallacies. Another fallacy is the idea that public works programmes create employment, a popular notion from Apartheid days.</p>
<p>The idea of paying people with their own tax money should elicit only scepticism. What happens is that competitive private sector contractors who would have been paid with earned money to undertake the “public” works project and employ workers, are robbed of that opportunity and tax funds are extorted from taxpayers to fund something government need not be directly involved with.</p>
<h3>Detrimental results of nationalisation</h3>
<p>Nationalisation also makes a consistent appearance in South African pseudo-economics, right from the nineteenth century railways to the present. It is also the pet proposal of the new rock-star of left wing “economics”, Chris Malikane. But nationalisation has consistently produced detrimental results.</p>
<p>At best, once a company or industry is nationalised, it is marked by inefficiency and a distinct lack of respect for consumers (think Canada’s national health service queues, ditto South Africa’s Post Office), and, at worst, a complete collapse of the sector and destruction of the economy (think Zimbabwe’s mines and the Soviet Union’s agriculture). Privatisation, on the other hand, has produced more positive if inconsistent results, depending on how it is implemented.</p>
<p>When privatisation is done in a non-corrupt fashion whereby cronies do not simply replace their government friends, it leads to efficiency. If privatisation is merely a transfer from the formal to the informal political class – with a dash of monopolistic protection – inefficiency ensues. But bad privatisation is still preferable to nationalisation, as these companies become accountable to market forces, and will surely go bankrupt if they continue to perform as they did under state control.</p>
<h3>White monopoly capital</h3>
<p>South Africans now know that “white monopoly capital” was a phantom threat concocted by the political class to draw attention away from the failures of government and its private sector associates. Why we continue to dance to the tune of this self-evidently false narrative boggles the mind. But we started dancing to the tune of false economics long before white monopoly capital burst onto the scene, and this actively contributes to slowed economic growth and worsening destitution.</p>
<p>Rejecting nonsensical pseudo-economics is not going to put South Africa on the freeway to growth and prosperity, but it is certainly a necessary departure point.</p>
<p><em>Author Martin van Staden is Legal Researcher at the Free Market Foundation and Academic Programmes Director at Students for Liberty in Southern Africa.  </em></p>


Op-Ed: The first step to growth – Reject pseudo-economics

<p>Many would like to consign the polarising debate about “white monopoly capitalism” <a href="https://mg.co.za/article/2017-01-27-00-when-a-catchphrase-trips-you-up/">(WMC)</a> in South Africa to the <a href="http://www.news24.com/MyNews24/why-white-monopoly-capital-is-irrelevant-20170407">margins</a>. They argue that its proponents are nothing more than Marxist ideologues or <a href="https://theconversation.com/white-monopoly-capital-an-excuse-to-avoid-south-africas-real-problems-75143">mischievous political manipulators</a></p>
<p>But, even if we query the integrity of the term WMC, its introduction into South Africa’s contemporary discourse is indisputably good for the country’s politics.</p>
<p>Above all, it’s an urgent reminder that the <a href="https://theconversation.com/south-africa-needs-to-fix-its-dangerously-wide-wealth-gap-66355">inequalities</a> of wealth, income and <a href="https://theconversation.com/why-white-men-still-dominate-the-top-echelons-of-south-africas-private-sector-44873">opportunity</a> in this country are not only extreme but still highly racialised. It forces people to ask why, even under a black government, a <a href="http://www.statssa.gov.za/publications/P0302/P03022014.pdf">white minority</a> continues to dominate the most productive parts of the economy.</p>
<p>The extremes of racialised inequality in the country are not just an affront to social justice but are also politically explosive. Granted, the implementation of <a href="http://www.labour.gov.za/DOL/legislation/acts/employment-equity/employment-equity-act">employment equity</a> and Black Economic Empowerment <a href="http://www.dti.gov.za/economic_empowerment/bee.jsp">(BEE)</a> has somewhat <a href="https://theconversation.com/white-monopoly-capital-an-excuse-to-avoid-south-africas-real-problems-75143">ameliorated</a> racialised patterns of wealth and ownership. But, no one should be surprised when black people at the bottom of the heap get angry. Neither should people be surprised that there are politicians who, for reasons good and ill, are willing to exploit that anger and mobilise around it.</p>
<p>For the last twenty years, mainstream politics has talked a lot about addressing the extremity of inequality, but has done little about it. The governing African National Congress (ANC) has indulged in much <a href="http://www.anc.org.za/content/economic-transformation-commission-report">egalitarian rhetoric</a> while the opposition Democratic Alliance (DA) has targeted <a href="https://www.da.org.za/why-the-da/policies/job-business/economic-policy/">“equality of opportunity”</a>.</p>
<p>In practice, both have embraced the mantra that a rising tide in the economy will lift all boats. But, today the tide has long been out. The boats are stuck in the mud. And it’s taken the rise of the radical <a href="http://www.ujuh.co.za/flopping-bbbee-might-propel-radical-alternatives/">Economic Freedom Fighters (EFF)</a> to shake the major parties out of their complacency by espousing a revolutionary assault upon WMC.</p>
<p>That’s a major plus for the country’s politics. A serious conversation about the continued racialisation of wealth, inequality and poverty is needed. Yet the problem for the EFF, and those who simplistically target WMC, is the dismal nature of their sociology.</p>
<h2>Monopoly capital under apartheid</h2>
<p>White monopoly capital was at its most cohesive and concentrated during the late phases of apartheid. In 1981, <a href="https://zabalaza.net/.../who-rules-south-africa-an-anarchistsyndicalist-analysis-of-the-a...">over 70%</a> of the total assets of the top 138 companies were controlled by state corporations and eight privately owned conglomerate. These spanned mining, manufacturing, construction, transport, agriculture and finance.</p>
<p>Further concentration followed the mounting political crisis of the 1980s. Foreign companies disinvested and sold their assets locally. Unable to invest abroad during late apartheid, the conglomerates invested their excess capital by buying local assets that were often distant from their core business.</p>
<p>By 1990, just three conglomerates – <a href="http://www.angloamerican.com/">Anglo-American</a>, <a href="https://www.sanlam.co.za/Pages/default.aspx">Sanlam</a> and <a href="https://www.oldmutual.co.za/">Old Mutual</a> – controlled a whopping <a href="https://www.businesslive.co.za/bd/.../2013-11-24-unsexy-mutuals-seek-higher-profile/">75%</a> of the total capitalisation of the Johannesburg Stock Exchange (JSE). Given the overwhelmingly domestic and white nature of the ownership of these companies, as well as the astoundingly high level of concentration of capital in a handful of conglomerates, we could fairly – even usefully – refer to “WMC”. But things have changed considerably since then.</p>
<h2>Changing corporate landscape</h2>
<p>The democratic era that started with the ascension to power of the ANC in 1994 has seen major changes in a corporate structure which had historically revolved around a <a href="http://www.tandfonline.com/doi/abs/10.1080/03768359708439989">minerals-energy-complex</a> dominated by the major conglomerates.</p>
<p>The opening of the economy to the global market post-apartheid, led to major processes of <a href="http://www.tandfonline.com/doi/abs/10.1080/10108270.1996.11435064?journalCode=rsar19">“unbundling”</a>, as conglomerates shed their “non-core” assets in search of “shareholder value”. By 2016, <a href="http://salearnership.co.za/anglo-american-learnership/">Anglo-American’s share</a> of market capitalisation on the JSE had shrunk to as low as 15%.</p>
<p>In addition, foreign money poured in, some to purchase unbundled assets, some to invest in an expanding financial sector. Yet some simply sought to make short term returns from high interest rates. Correspondingly, the role of the banks and private investment institutions increased. By 2010, financial institutions (14%) – along with mining houses (37%) <a href="http://wiser.wits.ac.za/system/files/seminar/Southall2012_0.pdf">accounted</a> for over half of market capitalisation of the JSE by 2010. The economy was now dominated by a minerals-energy-finance-complex.</p>
<p>Alongside the growing financialisation of the economy, there has been a shift in racial patterns of ownership. At the end of apartheid, companies listed on the JSE were almost wholly owned by white South African investors. But, by 2016, (if we accept the calculations done by Alternative Prosperity) white South African ownership was down to just <a href="https://www.jse.co.za/articles/black-south-africans-top-100-companies-listed-on-the-johannesburg-stock-exchange">22%</a>.</p>
<p>Meanwhile, foreign ownership had leapt to 39%, black direct ownership (mainly through BEE schemes) to 10% and black indirect ownership (largely through pension funds) to 13%, with another 16% uncategorised.</p>
<p>Such statistics are always a matter of controversy. President Jacob Zuma recently insisted that black ownership of the JSE was as low as <a href="http://www.sanews.gov.za/south-africa/president-zuma-stands-jse-black-ownership-remarks">3%</a>. Yet the trend towards both greater foreign ownership and increased black ownership is indisputable. Three major issues follow.</p>
<h2>Evolving ownership patterns</h2>
<p>Large scale capital in South Africa is less monopolised and more diversified in its ownership than it was under apartheid (even if major corporates continue to dominate). It follows that the country needs to grasp how the nature of capitalism is changing. For a start, the growth in black pension funds reflects the strong upward <a href="http://ccs.ukzn.ac.za/files/Black%20Middle%20Class%20in%20SA3.pdf">movement of black people</a> into the higher ranks of the public service since 1994.</p>
<p>Even if we continue to refer to “monopoly capitalism” in these circumstances, it makes far less sense to refer to it, uncritically, as “white”. Yes, it’s probable that the major stake of foreign investment is ultimately owned (largely indirectly via institutional investments) by foreigners who are white. But, does this suggest that we would prefer that they were yellow or brown? Surely that takes us on to very shaky territory? Should we categorise the <a href="http://www.ujuh.co.za/guptas-exit-from-south-africa-signals-change-of-fortunes-for-zuma-but-this-war-is-much-deeper/">Gupta</a> empire – the politically-connected family at the centre of state captures – as “brown monopoly capitalism?”</p>
<p>Critics such as <a href="http://www.ujuh.co.za/the-chris-malikane-doctrine-white-monopoly-capital-myth-or-reality/">Prof Chris Malikane</a>, the economic adviser to Finance Minister Malusi Gigaba, have objected that the growth of black investment on the JSE is not significant. That’s because, they argue, black pension funds are largely controlled by white asset managers. And black direct investments via BEE schemes are largely funded through debt owed to white capital. These are certainly very real issues. But, is the main issue here the racial patterns of ownership and control – or the growing power of financial institutions and their lack of accountability?</p>
<p>All this means that it’s simply too crude, too simplistic and too out of date to depict the economy in broad brush terms as under the domination of white monopoly capital. The reality is more complex. It follows that suggestions that the decolonisation of the economy demands the nationalisation of WMC is profoundly bad economics.</p>
<p>The troubled experiences of South Africa’s state-owned enterprises such as <a href="https://theconversation.com/south-africa-must-free-itself-from-the-burden-of-owning-a-national-airline-64004">South African Airways</a>, <a href="https://theconversation.com/why-south-africas-power-utility-isnt-in-great-financial-shape-68441">Eskom</a> and <a href="http://www.fin24.com/Economy/petrosa-to-axe-staff-to-save-its-skin-20170505">PetroSA</a> do nothing to inspire confidence. What the economy might gain in terms of direct state ownership would be confounded by flight of capital and know-how. Class rule by capitalists would be replaced by class rule by state managers who would be no more accountable to ordinary citizens than their predecessors.</p>
<h2>Innovative solutions needed</h2>
<p>South Africa needs to devise far more inventive solutions than nationalisation to tackle the brutally unequal nature of its economy. Citizens need to pose profound questions about how to make international capital more accountable. They must ask questions about how to make the country’s corporate elite more accountable and how state capital can work productively with private capital while remaining responsive to local communities. And, yes, about how present patterns of corporate ownership can be not only de-racialised but democratised.</p>
<p>Yes, it’s a nice idea to think of overthrowing “white monopoly capital”, but we need to think very carefully of what we might replace it with!</p>


White monopoly capital