Unpublished May Essays Pt. 1
SAA’s pseudo-privatisation: the ANC’s National-Socialist economic system
Back in May, I worked for a now-defunct Taxpayers’ Union organisation for two weeks. I wrote several articles for them which were never published. I feel they are still relevant today, and hope you find them interesting.
South Africa’s system of anti-minority discrimination laws has been compared to Nazi Germany once or twice, and there is some similarity in the way in which they approached transformation, though the Germans were of course much more severe, and the warm-up to expropriation without compensation took only 5 years, rather than the 25-30 year time frame we are witnessing today.
But there is another aspect which is much more interesting, and that is the similar ways in which they took control of the economy. Fascist economic policies were popular across the world in the inter-war period, both in America, where FDR drew on the economic policies of fascist Italy for the basic structure of his New Deal program[1]. Contemporary America has renewed this approach to the tech sector, and steers the policies of the big tech monopolies through a series of PPPs with the CIA known as the Enduring Security Framework.
Fascist economics, as remarked by British fascist Oswald Mosely[2], is essentially just Keynesianism – the school of economics which has so come to dominate the thinking in the west, that most of its basic assumptions are simply taken for granted.Using national debt and loose monetary policy to produce a full-employment, welfare-buffered consumption economy.
But Nazi Germany were different –instead of consolidating control in permanent state contracts and nationalisation, they re-privatised firms they nationalised when coming to power. The difference is that they made sure the firms went to friends and members of the party[3], and that Jews were economically excluded.This ensured political control of the economy, while keeping it outside the control of bureaucrats, who might be tempted to impose to much rule of law on matters.
The recent headlines about SAA are seeing celebrations abroad in the investor class, as they greet Ramaphosa as finally fulfilling his promise of liberal economic reform. But he has done no such thing. The situation is just ambiguous and opaque enough to be missed by casual readers of international foreign investment news – giving hope to the global capital class and corporate investors.
But the sale of SAA has gone to a consortium of senior party members and state-funded corporations, as well as handing “golden shares” (which give veto power over company restructuring) to the government. The transfer of ownership was also cost-free, suggesting government assistance of one form or another. Predictably enough, the change in management structure is accompanied by the announcement of a more aggressive race-based hiring policy for pilots.
The corporation given control of SAA is something called Takatso Consortium, who were given a 51% share, and will be headed by CEO Gidon Novick, the founder of the local budget airline Kulula. This consortium is comprised of two companies, Harith General Partners, an investment company largely driven by a significant quantity of public funding, and Global Aviation (GA), a South African aviation company which leases planes and technical staff to other airlines.
While GA appears to be competent and largely above-board, Harith GP is not nearly so. Its leadership is comprised of several individuals with close ties to both legacy financial corporations and the Public Investment Corporation. Chairman Tshepo Mahloele has served multiple times in both sectors, responsible for drafting BEE policy for Rand Merchant Bank, and has been investigated by the Mpati Commission for irregular dealings with the Government Employees’ Pension Fund, as well as selling a house at below market price to the infamously corrupt party functionary Brian Molefe, and has been mentioned alongside a long string of crooked deals going back at least a decade[4].Other executives include Jabu Moleketi, a former cabinet minister and ANC member, and Alwyn Wessels, who was in charge of financing public infrastructure for ten years at ABSA.
It is highly possible that the handing over of key functions to experienced private administrators could well improve service, and insulate against union disruption, something indicated by workers’ union NUMSA, when they objected to the restructuring. But the controls on the major structural features of SAA remain within grasp of the national government, making it unlikely that looting will cease.
Wits Professor Tshepo Mongaloraises suspicions about lack of transparency and potential breeches of due diligence – no money changed hands as shares did, which indicates the potential use of a “vendor loan”, where the party selling shares provides a low or sero-interest loan to the party purchasing, essentially gifting the company.[5]
Amid all this is the constant feature of BEE, which operates as a means for ANC-aligned companies to pressure minority and foreign businesses into handing over control, often to a party subsidiary of Chancellor House, an investment company controlled by the ANC. The enrichment of cadres is often a feature of headlines, but the flipside of the coin is that it increases party control and influence over the economy as a whole, while dispossessing native racial minorities.
This is a pattern which extends increasingly to every sector of the economy, and to smaller and smaller businesses, who must give away larger and larger shares of their businesses to black people, for free. Since those close to power benefit from favours, this incentivises businesses to find equity partners close to the ruling party, increasing their stranglehold while depleting the remaining functioning economy.
The main ideological program of the ANC, the National Democratic Revolution, is itself a National-Socialist plan in essence. Originally used by the Soviets to describe the program of economic exclusion and violent ethnic cleansing used by Indonesia to expel the Dutch, it was operationalised as a general strategy for Soviet-aligned third-world nations to expel Western minorities[6].
While the difference between South Africa and Nazi Germany are large and significant, the structural similarities are worth noting, and are instructive in understanding the mechanisms of control shared by communist and fascist government systems, whose political programs seek total control before all other considerations. The main difference with the ANC, is their lack of urgency. Judging by the scale of looting, it can be reasonably adduced that unlike the European fascists parties, for ANC cadres, becoming wealthy is taking precedence over securing long term power.
[1]Sutton, Antony Cyril. Wall Street and FDR: The True Story of how Franklin D. Roosevelt Colluded with Corporate America. Clairview Books, 2014.
[2]Ocampo, Emilio. Sir Oswald Mosley's Contribution to the Interwar Policy Debate and Fascist Economics. No. 730. Universidad del CEMA, 2020.
[3]Bel, Germà. "Against the mainstream: Nazi privatization in 1930s Germany 1." The Economic History Review 63, no. 1 (2010): 34-55.
[4]Areff, Ahmed. “Unpacking Tshepo Mahloele: rifling through the baggage of the man overseeing the SAA consortium” News 24, 12 June 2021
[5]Accram, Amina. “SAA’s new equity partner raises concerns among aviation experts” SABC, 12 June 2021
[6]Myburgh, James. “Singapore Revisited”, Politicsweb. Serial, March-June 2021