CALL BANKS TO ACCOUNT
Why nationalisation makes sense, by Julius Malema
This week, the EFF led a debate in the National Assembly on the nationalisation of banks without compensation.
We did so because state ownership and control of financial institutions such as banks under current circumstances is not just an ideological position, but also superior logic.
South Africa’s economy has since 1994 been financialised, and all observations point to the fact that this trend will continue.
An elected government, as a representative of the people, should therefore play a leading role in the ownership of this key sector of the economy.
If the state does not own banks, it will be reduced to a spectator in the economy while huge financial corporations determine the pace, content, direction and form of resource allocation in society.
It is already evident that the biggest providers of comparatively better-quality housing in South Africa are banks. The state provides lousy houses that largely do not improve the quality of life for the majority.
Bank loans are the only way ordinary citizens can buy cars, with one of the major vehicle financiers stating in its billboard advertisements that “we own seven of 10 cars on the road in South Africa”.
Seemingly the only way South African children can gain access to quality education is through banks, which finance access to private schools whose fees go up to R200 000 per year.
Banks have created a huge indebted middle class, which is economically powerless and can’t even explore entrepreneurial activities because the amount of disposable income is negligible.
Banks finance even the clothes many people wear. For Africans, it is even worse because they borrow money to pay for lobola — and as long as lobola money is owed to the bank, the bank indirectly owns the wives of many African husbands.
In summary, banks own our cars, houses, clothes, food, wives and education, and determine who gains secure access to these basic needs. Banks run and control many people’s lives and this is reason enough that a much more democratic means of ownership of these institutions should be introduced.
That is the reason why we argue that banks should be nationalised without compensation.
Of course, a lot of people will panic over our call for nationalisation, particularly given the condition of state-owned companies under the government of President Jacob Zuma.
That is why we used the opportunity in parliament to introduce a debate on the model that should be adopted in the management and control of stateowned companies.
The EFF recommends that state-owned companies should be listed entities and should account to a variety of interested investors, inclusive of institutional, co-operative and even private owners.
This will prevent a situation where board meetings are called late at night to approve family deals, like when Eskom illegally purchased a mine on behalf of the Guptas.
This will prevent a situation where R600-million can be deposited with a management consultant for nothing, and without a contract.
Listing state-owned companies could be another way of ensuring their efficiency and responsiveness to interested and at times affected shareholders. It could be a superior route towards democratisation of ownership.
Chinese state-owned companies are listed, have a certain degree of market discipline and generate additional income for the state.
In the global top 500 companies, China has more than 100 companies and 80% of those are stateowned. China has built efficient and profitable stateowned companies that generate profits from around the world and reinvest the proceeds back home.
Prior to the introduction of strict internal controls and the listing of these companies, none were in the global top 500 and China’s economy was relatively insignificant in the world economy.
It is currently the second-biggest economy in the world. Its economic expansion was ignited and anchored by state-owned companies.
The whole world boasts successful cases of stateowned financial institutions, including companies in the West, which is associated with the neoliberal propaganda that developing economies should allow private markets to take care of the common good.
Nationalisation is not a call for chaos, it is instead a call that the common good should be commonly controlled, and not by few individuals.
The continued ownership of particularly banks by private individuals is the biggest contributor to the massive and immoral inequalities that define South Africa today. Almost all of South Africa’s richest are in one way or another involved in the financial services.
State ownership of banks will insulate our country from financial crises similar to the one caused by banks that borrowed more than was economically sensible, sound or permissible.
Banks are platforms for tax avoidance and massive illicit financial flows, and the state — the biggest loser in the financial flows syndicate — has to insulate itself.
The other view against nationalisation of banks comes from the racist capitalist class. These reactionary forces hoist a narrative that no black government should be allowed to gain strategic ownership and control of any significant sector of the economy, particularly the financial sector.
What these forces do not mention is that the global economic crisis that led to the loss of many jobs all over the world was triggered by privately owned banks.
Privately owned banks have caused much economic misery because they are only interested in quick profits, and not in the development of our people.
The EFF’s cardinal pillar in this regard, including its perspective on banks’ ownership as a means of ensuring that our people participate in the economy meaningfully, will lead to genuine economic emancipation.
From cradle to grave, the route to a better life often lies through banks. Isn’t it time, says Julius Malema, that such crucial institutions were made to prioritise society’s needs?