Save us from this man of consequences
Ihave got to the stage where I study photographs of Finance Minister Pravin Gordhan with a forensic regard. Is he healthy? Is he becoming more or less puffy in the face? Is puffy in the face a sign of anything bad?
The onslaught on Gordhan is immense. President Jacob Zuma insults him almost every time he stands before an audience. Emboldened, the wealthy Gupta family is more than comfortable, in court papers, to call him a “weak-kneed politician” — a bit rich when you consider they arrived here only when it was safe and if you remember Atul Gupta’s quivering apology to the nation after his family used Waterkloof airbase as the arrivals lounge for a family wedding.
Between them, Zuma and the Guptas (the Zuptas, as Julius Malema fabulously named them) have hijacked the South African state for their own gain. Only the Treasury and the Reserve Bank remain out of their clutches and the fight for these two is on. Sure, it starts with the Treasury but the central bank would have to be the final frontier.
The Zuptas want to take money out of the country, to “alienate” it as it were, just like the Russian oligarchs. The Reserve Bank’s job would be to stop them, or at least control them. But political leaders in serious countries (Helmut Kohl in West Germany) and less serious (Cristina Kirchner in Argentina) have already shown us that central bankers can easily be dislodged when they cross swords with political power.
Zuma’s latest assault on Gordhan and the Treasury is that they are a barrier to “radical economic transformation”. In Zuma’s mind, radical economic transformation simply means making white monopoly capital black monopoly capital (the blacks being the ones he chooses). He has never ventured an opinion about how to make our economy more inclusive or more fair. Or more productive. Or more diversified. Or more competitive. Or more skilled. Or more secure.
Oh, wait, he did say something. Hours after appointing Des van Rooyen on December 9 2015, he pitched to speak to business leaders from across Africa. The pooh had not yet hit the fan, so Zuma was in a confident frame of mind. He muttered something about “some things just have to be done”. He meant firing Nhlanhla Nene.
Then he said this: “I am not a businessman or professor. But I am rebelling against [the idea that] what determines the value of a commodity is the law of supply and demand. I am against this definition.
“The value of a commodity is the labour time taken in production of that commodity. That’s what determines the value of a commodity.” His audience was silent.
Zuma was articulating the labour theory of value, a Neanderthal and by now discredited dictum, even among communists. Zuma learned it from fellow prisoners on Robben Island half-a-century ago and he has never thought to question it. You can be sure it doesn’t come up in conversation with the Guptas.
But there’s still a lesson in it. It is that economics, our South African economics, the way we create wealth and the way we distribute it, is and should be up for discussion.
What Zuma doesn’t realise though, when he insults his own finance minister, is that it is only the Treasury functioning solidly and ethically under the guidance of an authentic public servant that uniquely guarantees this country at least the chance of radical economic transformation.
National economies are like household economies. It’s easy. You borrow too much and the bank manager (or ratings agency) wants to talk to you. You save and live off what you save and you can pretty much do what you like.
Transform away, but “do not save what is left after spending but spend what is left after saving”. Warren Buffett, the man who said that, knows a thing or two about money.
What Gordhan needs out of the ANC is a programme of economic change and reform that safeguards and carefully invests the national wealth but dramatically draws the masses into ownership. It can easily be done if the social partners trust each other, and I suspect traditional capital knows it must happen.
But it is the knowledge that the Guptas and Zuma’s other cronies are waiting just over the hill with a string of, erm,
other proposals that stops so-called “white monopoly capital” doing business with Zuma.
He poisoned an already toxic well with his friends and it is probably beyond repair.
Ultimately, Zuma is the president and, as Donald Trump is proving in Washington DC, he can literally do what he wants. But not forever and not without consequence. He may fire Gordhan, but not without consequence. He may appoint Brian Molefe in his stead, but not without consequence.
Someone who still reckons the labour theory of value has something to offer the human condition is probably not going to change his mind about anything at age 74. But if he had the courage to ask the right people the right questions and actually listen to the answers, he could still change his destiny. And ours.
TRANSFORM AWAY, BUT ‘SPEND WHAT IS LEFT AFTER SAVING’. WARREN BUFFETT, THE MAN WHO SAID THAT, KNOWS A THING OR TWO ABOUT MONEY