Disc Dem

Disc Dem

Saturday, 14 October 2017

2017-2019 Expect Politics of Illusion, Delusion, and Opportunity

Am I alone in having no enthusiasm for following the ANC leadership race and trying to guess the outcome of their December elective conference?  That is if they manage to hold one at all. In my opinion it is delusional to believe that even a best-case outcome will deliver a cleansed and rejuvenated ANC - and the worst-case outcome doesn’t bear contemplating. I read about the emergence of compromise candidates “for the sake of ANC unity”, but see only compromised candidates. None of them is untainted by the Zuma kleptocracy, which continues unchecked even though the majority of candidates are blathering on about putting an end to state capture. They should have been actively doing that for the last ten years, not promising to do it at some unspecified future date. The fact is that the ANC, even under new leadership, can no longer maintain the illusion of working for “a better life for all”, so it is past time for them to be voted out of office.

But who or what replaces the ANC?
The Democratic Alliance was in pole position to pick up support until their recent spate of political setbacks, not least being the recent suspension of Patricia de Lille and her security chief JP Smith from all party activities; not to mention the earlier Helen Zille debacle. The DA also seems to have noticeably lost its way after taking on so many disparate local government coalitions. It’s almost as if the conflicting ideologies they have to work with are eroding their own identity, and they are no longer confident in presenting themselves as the future for South Africa. This is also evidenced in their apparently schizophrenic approach to events such as votes of no confidence – if the vote is against the ANC it must be held in secret to allow ANC members to vote their conscience without fear of retribution, but if it is against the DA, then it must be an open vote so the party can discipline members who vote against the party line. Huh?

It is also unfortunate the DA is still widely regarded as a predominantly “White” party, which adds to the impression they are suffering from political schizophrenia. On one hand they have to retain their white constituency through a conservative approach to such challenging subjects as land reform and economic transformation, yet on the other hand their only way to attract disenchanted ANC supporters is by taking a more populist stance on the same subjects.

Given these challenges, party supporters and their leadership are delusional if they believe the DA can win the next National Election outright, and their perceptibly superior and dismissive attitude towards coalition partners in local government is also counterproductive to their aspirations for 2019.

For their part in “the game of politics” as their leadership so arrogantly refer to it, the EFF has developed a brand of smoke and mirrors that any political illusionist would be proud of. Their latest illusion has been created around the six Mogale City councillors who were expelled from the EFF because they voted with the ANC to approve council’s 2017/18 budget. On the surface an apparently brave and highly principled decision, for which EFF leadership have received plaudits for punishing those who gave the keys to public funds back to the ANC.  Closer examination, however, reveals the illusion behind the outcome. Deconstructing some aspects of this illusion:

1.        First of all no bravery was needed as there was absolutely no risk the EFF would lose any council seats by removing these cadres. They were all appointed from the proportional party list, and will simply be replaced by others from that same list. The question is, would EFF leadership have taken the same action had these been Ward councillors, where by-elections would be needed to replace them, or is their false bravado just an illusion designed to elicit cheap political capital? I’ll leave you to make your own decision on that.

2.      According to an EFF official statement on the affair, “....six EFF Councillors contravened the EFF decision not to attend the Mogale City Budget vote Council meeting...” Obviously councillors on the ground, who should be empowered to act in the best interests of their constituents, were not involved in this decision. So, like every other political party in South Africa, EFF leadership makes blanket politically motivated decisions without regard for local circumstances, and then demand blind obedience from their cadres.

3.      The statement goes on, “This is the same ANC that the people of Mogale City removed from the government following the 2016 local government elections outcomes.” Technically speaking, the ANC still hold the majority of seats for a single party, so the people of Mogale City did not actually remove them from government – with 38 seats versus the combined DA 27, EFF 9, FF+ 2, and IFP 1,  it was actually opposition political “horse-trading” that did that job. Ideologically incompatible, these parties are only united by the common cause of ousting the ANC and improving their own perceived status. But what happens if they no longer have that common cause?

4.      The statement continues, “It is the same ANC that has been looting the public purse since 1994 to the exclusion and marginalisation of our people. The mandate not to vote with ANC was consistent with fighting corruption as reflected in our non-negotiable cardinal pillar number seven”. What the EFF doesn’t tell you is, while under ANC control, Mogale City received unqualified audits for 5 consecutive years (2011/12 – 2015/16) with the last 3 of these years being “Clean” audits. Oh dear, a seemingly efficient and uncorrupted ANC municipality doing what the DA crows as being an outstanding job – let’s quickly and quietly sweep that one under the carpet. Looking at this audit record, and having negotiated some additional concessions with the ANC mayor, why should the six EFF councillors, along with the single IFP councillor, not have voted to approve the budget?  Party leaders made a purely political decision with full awareness that failure to approve a municipal budget has dire consequences, most of which will be borne by the poorest of the poor. With this action EFF leadership confirmed once again that our party-centric electoral system allows them to always put party politics before service delivery with impunity.

Masters of political illusion, the EFF has somehow convinced a not insignificant number of people that their Marxist/Leninist/Fanonian ideology provides solutions to South Africa’s problems, even though the ideology has failed dismally in countries that deployed far greater financial and intellectual resources to make it work. Their “get our land back” illusion has also misled a number of gullible individuals into believing that they will finally get some land. What they can’t seem to grasp is EFF ideology dictates, in all applications of the word, that no-one owns any land. Everyone will be individually dispossessed without compensation and all land will be “owned” by the state.  “The State” whatever or whoever that might be, will then determine who gets what and where, creating a patronage system and more insidious form of state capture that will outstrip Zuma’s corrupt network by a mile. However, as we voters are not as stupid as politicians believe or even hope we are, most South Africans will ultimately reject this ploy, recognising that the EFF are playing a dispassionate and cynical game, but with real people’s lives - our lives, yours and mine.

EFF leadership’s endgame, however, is not to win the 2019 election outright, which would be a delusional objective, but rather to ensure that they are the “kingmakers”. In a role that is almost better than winning, “kingmakers” have a lot of power that carries no ultimate responsibility for delivery of promises made by the majority party. As any illusion created by the DA and EFF that they can work together in long-term coalitions or partnerships is already crumbling, it begs the question: what happens in 2019 if the ANC lose their majority (a possibility), the DA does not achieve an outright majority (a certainty), and the EFF end up as kingmakers (a probability)? The answer is simple. Our country will be at the mercy of an allegedly delinquent tax-dodger who can choose between returning “home” to the patronage politics of the ANC, or spend the next five years in a mutually destructive ongoing ideological war within a DA-led coalition. There are no prizes for guessing how that will turn out.

With such uninspiring choices I suspect that without a paradigm shift in the political landscape, many more people will join the ranks of those who just don’t bother to vote. 2019 will likely see the lowest ever voter turnout percentage and, through this apathy, politicians will be granted further license to continue focusing on themselves, rather than the people of South Africa.

Recent reports indicate that ex-ANC MP Makhozi Khosa is exploring the idea of forming a new political party, and we certainly need a vibrant alternative to the self-absorbed dross served up by the ANC, DA, EFF et al, “something fresh....” as she so aptly put it. But can a new party really ring the type of changes needed? If a party is formed with the mindset of a typical South African politician, then the answer is no. It will become just another COPE, or UDM to be eventually lost in the shadow of bigger parties. However, if the political establishment is attacked by a people-centric party that can appeal to those who have stopped voting altogether, and also appeal to those who do vote, but use their votes negatively – e.g. “I’m not voting for (DA/EFF/IFP/UDM/COPE/FF+/ACDP etc), I am voting against the ANC”, there is a unique opportunity to make a significant impact on traditional voting patterns.

In my view people-centric means having a commitment to unifying the country under the single classification “I am proudly South African”. It also includes a commitment to changing the electoral system to dismantle the predominantly party-centric proportional representation, cadre deployment and patronage system. It includes having a genuine process of public participation, not the lip-service kind paid by today’s breed of politicians. It means telling people the truth about what can and cannot be delivered, having a professional plan with real goals and achievable milestones. It is amazing how patient and tolerant people can be when they are told the truth.  There must also be a commitment to changing the constitution to curb the powers of the Executive, in particular the President. We should never again have to suffer the ignominy and frustration of not being able to remove incompetent or criminally accused members of the Executive, particularly if they occupy the position of President.

Finally, is Makhosi Khosa the right person to deliver the paradigm shift in South Africa’s political landscape we desperately need? She may not be everyone’s favourite, having a tendency for theatrical grandstanding, but her long experience as an activist, not to mention her current availability to take on a new challenge, certainly makes her best positioned to grasp the nettle.  From a personal perspective, any credible candidate willing to take on the task will have me on board faster than you can say 2019.

Sunday, 1 October 2017

From Rainbow to Monochrome

Are the suspect actions of Bell-Pottinger, KPMG, McKinsey and SAP merely aberrations, or are they the only ones to have been caught out due to the abnormal set of circumstances surrounding South African state capture? Do we really believe we have an otherwise ethical and socially responsible business community when, for the last 30 years, leading business schools have been teaching CA's and MBA's that their only responsibility is to generate profits for shareholders?

It was back in 1970 when American economist Milton Friedman first floated what Jack Welch, a master of shareholder wealth creation and long-serving CEO of General Electric, later described as “the worst idea in the world”. In an acerbic, although intellectually questionable article, published by the New York Times on 13th September 1970 titled The Social Responsibility of Business is to Increase its Profits, Friedman definitively asserts that the only responsibility corporate executives have is to generate profits for shareholders, and any other definition of social responsibility is a "fundamentally subversive doctrine". In a single article having no factual foundation, Friedman sowed the first seeds of the Shareholder Supremacy doctrine.

Throughout the 1980s and 1990’s Harvard Business School’s tenured professor, Michael Jensen, gave impetus and undeserved legitimacy to Shareholder Supremacy through his “Agency Theory”. Jensen’s untested opinions and ideas unleashed the perfect storm of corporate greed, in which ethics and integrity take a back seat to increasing shareholder wealth. In this regard, Harvard Business School recently came in for a roasting from Newsweek journalist Duff McDonald who wrote “By propagating ideologically inspired amoral theories, business schools have actively freed their students from any sense of moral responsibility”. Then there are the unintended consequences of using share options to align an executive’s interests with those of the shareholder. Not only has this driven ever-expanding income inequality, but is also behind a great many lapses in corporate governance due to executive compensation being aligned to ill-conceived incentives. 

Living and breathing people have become impersonal “human resources”, because the shareholder is all that matters. Corporations frequently use “human resource” layoffs to balance the books, cynically depriving these people of an income to maintain or generate additional shareholder wealth. As Simon Sinek so aptly put it in his talk Nobody Wins, “We don’t care how hard you work, or how long you’ve been here, you are on the wrong side of the spreadsheet”.  He also likens Shareholder Supremacy to a sports coach prioritising the needs of the fans over the needs of the players. 

Companies demand loyalty from their employees, yet this is not reciprocated. Employees are constantly in fear of losing their jobs, so is it any wonder they also focus on looking after their own interests? Companies often impose almost impossible tasks on their employees in their quest for improved shareholder profit, turning a blind eye to questionable dealings until they are exposed, whereupon the hapless employee is duly thrown under the proverbial bus while executives continue with "business as usual". Self-interest begets self-interest, resulting in the greatest threat to social cohesion we face today.

A lot of lip-service is presently being paid to corporate integrity, ethics, and social responsibility, but that is all it is, lip-service. Generating profit for shareholders is still the only objective, and every time there are layoffs implemented to solely protect shareholder wealth, corporations are being socially irresponsible. This is particularly true in South Africa where economic inequality, the gap between rich and poor, is said to be the widest in the world. I am a dyed-in-the-wool capitalist so have no problem with entrepreneurs, like the founders of Google for example, taking huge rewards for their skill, perseverance, and dedication in building a premium product.  But I do have a problem with bureaucratic executives who believe they are entitled to the same level of wealth, even though they operate within established companies that they had no hand in building. 

What has been missing since last seen in the 1950’s and 60’s is the executive skill of balancing the interests of all the various groups that touch their companies— customers, employees, suppliers, shareholders, and the community at large. It is therefore not surprising that Marxist/socialist ideology is gaining political traction among the poor and unemployed. Unfortunately, politicians are no better at balancing anything other than their personal advancement, as evidenced by the unworkable but supremely populist approach used to garner more votes in their quest for ultimate power.

To use a phrase that executives understand, the bottom line is the combined failure of big business to adapt to changing social conditions, and the failure of politicians to address systemic failures in local and national government have conspired to bleed all colour from our Rainbow Nation, leaving us with a shadowy monochrome image of what might have been.

Business executives and politicians need to understand that we don’t need radical economic transformation.  We need corporations to stop clinging to discredited Shareholder Supremacy theories and return to balancing the needs of all their stakeholders. Politically, we need a complete overhaul of the electoral system, and preferably a completely new political party that is not entrenched in the present party-centric dispensation. But as American writer Upton Sinclair (1878-1968) said as far back as 1935, “It is difficult to get a man to understand something when his salary depends upon his not understanding it”. I will however keep trying to get the message through........