The Role of Government in the Creation of Poverty

South Africa has been following the precepts and rules of the Leninist-Marxist system of government since the ANC came to power, simply because the leaders of the ANC were indoctrinated in that system from an early age, and do not know any other system. The one exception to this was Nelson Mandela, who came to power as a dedicated communist, but had the good fortune to enjoy an in-depth discussion with the President of Vietnam, a country which had suffered under that system for many years, until an enlightened government came to power, and set about unwinding the evils that had been imposed on it by the unthinking rulers over man years. Mandela, an educated and thinking man, understood what he was being told, and attempted to revise the policies of his Party. Unfortunately, Mandela was an old man, and tired, and the lessons he tried to impart to his successors did not take root. That is not surprising if you understand Thabo Mbeki, a man who was capable of astonishing stupidity in the face of all the fact about HIV/AIDS (remember his famous speech that AIDS was a syndrome, and you cannot contract a disease from a syndrome? Mbeki was the man, the lauded ANC leader, who condemned hundreds of thousands of his fellow citizens to a gruesome death because he was unable to understand some simple scientific facts). Mbeki was also hungry for power, as proven by his maneuvering to avoid answering to the South African Parliament about the extensive corruption in the Arms deal of the 1990s, and there is strong evidence that he benefited personally from that deal, although a Commission of Enquiry went out of its way to ensure that the evidence proving this was never presented. Mbeki set the lowest standard for governance in South Africa, and he was ably followed in this by Jacob Zuma and his cohorts.

The Minister of Finance, who is supposedly at war with Jacob Zuma, the President, stated flatly in his 2017 Budget speech to Parliament that the average growth in GDP achieved since the ANC came to power in 1994 has been only 1%. The population has grown at a rate closer to 3%, with the result that a once-thriving economy has been brought to its knees, yet the Government has been unable or unwilling to stop the slide. That they do not know enough economic theory to understand why this is so is evidenced by the repeated attempts to bring down ‘White Monopoly Capital’, which is supposedly bleeding the country dry, to expropriate without compensation all farms (presumably White-owned) which have changed hands since the arrival of the (White) colonists in 1652, with persistent rumors that the expropriation without compensation will be extended to banks, insurance companies, mines and other forms of entrepreneurial activity. The ANC has been unable to explain how this will achieve any improvement in the lives of the ‘poorest of the poor’, a mythical sub-class of (Black) ANC voters who do not have any adequate understanding to be able to distinguish a politician’s promises from reality. There have been numerous attempts to create a spark of life in the economy, all of them doomed to fail by the lack of even a glimmering of understanding of economic reality.

The only way to succeed is to focus on the winning attributes. That means business, industry, commercial agriculture and mining, with the minimum requirements being the provision of a high-quality education, removal of the dead hand of bureaucracy from the field, cutting back dramatically on every aspect of the government that does not contribute actively to the objectives of growth and wealth creation (not the variety generated by patronage!), and allowing the creators of wealth to decide on the allocation of it.

The result will certainly be more very wealthy people - Microsoft employs more than 10 000 millionaires - but also a much greater number of people making their own way into the middle and upper-middle classes.

South Africa is proud of the fact that it pays social welfare grants to 17 000 000 people! We should be ashamed of this. At least half of those people are capable of making their own way in the world, and would be delighted to escape the trap of being charity cases. What is holding them back is the hatred of 'monopoly capital', whether White or other. An economy needs capital to function, and it needs to leave the income that will grow into the wealth that becomes capital in the hands of the people who have proven that they know how to handle it - the entrepreneurs, the businessmen, the miners, the commercial farmers and the industrialists. Taking ten billion Rands per month (the amount of tax money that is channeled to the poor in the form of social grants) from the economically active results in thousands of billions of Rands of potential investment in job-creating activities being lost.

Unfortunately, the communist theory, liberally laced with patronage profits derived from supporting the ANC, militates against any of this real-life logic being incorporated into ANC policy.

Zuma is not to blame.

Anyone who has a degree will have undergone the unpleasant experience of being told, by someone without a degree, that his education is worthless, that life’s experiences are more valuable than book learning, that people who come out of university are worth much less than those who took the opportunity to experience the real world while the university worm was locked away in valueless lectures.  One learns to ignore these stupidities, gaining the understanding that the un-degreed critic simply does not have the understanding to realise the value of the educational experience,  Trying to convince such people of the value of learning to think in a structured way, integrating learning, experience, observation and the valid views of others is a waste of time.  Some un-degreed people have the ability to break out of the mould they have been born into, but, unfortunately, many of them are unable to stretch their minds beyond the slogans, the sensational statements of others of their ilk, the tee shirt summaries, the sound-bite statements of ‘absolute truth’, and actually apply their minds to a situation.  These people are fated to remain ignorant of the realities of life, to be uncritical of ‘what they know’ without ever questioning the validity of it, and unable to go beyond what they were born into.  They are not innately evil, but they are ignorant, and they choose to remain ignorant.  The evil ones are those who use that propensity not to want to know, to gain their personal objectives, to use those people for their own ends.

Jacob Zuma is a product of his background.  He grew up as a herd boy, watching the animals in a field, without ever having had the mental training or the accumulation of knowledge to be able to apply his mental capabilities in a rational way.  He saw the wealthy and powerful people of his environment as models of the life and lifestyle to aspire to.  The village chief in his community was a man who exercised unlimited power, using his hereditary position to influence the recommendations of the elders.  His wealth, although modest in absolute terms, was huge to the eyes of the simple herd boy, whose family could not afford the economic cost of allowing him to gain more than a rudimentary education.  He was influenced by the village thinking, which saw the White man as an oppressor and could not understand how that White man gained his comparative wealth through directed work and the application of learned skills.  To the young boy’s mind, the wealth displayed by the White man was enormous, and was to be gained by the use of power, as was that of the village chief.

The young boy, growing up in the back of beyond in Zululand became imbued by the Black ‘leadership’ belief that the best opportunity for him would be to aspire to the ideals of communism, which held that the assets of the community should be shared by the community, which is, after all, only a slight extension of the tribal system, in which the land is the property of the community.  When he was old enough to act on his own, but not yet old enough to have gained the wisdom, experience and thinking capability of a mature adult, the young Zuma joined the ‘liberation movement’.  Using his native cunning and, no doubt, the inherent ruthlessness of the young, Zuma rose in the ranks of the ‘freedom fighters, to become the head of Intelligence in the liberation army, a position which entitled him to enjoy the benefits of senior rank.  His indoctrination by the Soviet masters of his movement made him more capable in the skills of manoeuvring and manipulating, and his position gave him an ability to gain knowledge of the doings and desires of his peers that would stand him in good stead in the years to come. 

The ‘revolution’, a rewritten statement of the real history of the acceptance by the Apartheid (a word that, even now, Zuma mispronounces in a way that suggests he did not understand that the policy was one by which the separate racial groups in the country would be free to determine their own separate futures) government that the Soviet threat no longer existed after the ignominious collapse of the Soviet empire in 1989, gave Zuma the next opportunity to achieve his aspirations.  The adoption of the principles of communism by the Black movements had given rise to a fear in the minds of the Whites that their way of life, their very religion, would be destroyed by the accession to Government of a Black majority dominated by Soviet thinking.  The Soviets had no real interest in the form of government that would be adopted when their puppets came to power in the newly decolonised African countries.  Their sole interest was in dominating that country and depriving the West, specifically the United States, of any influence in those countries.  They were not benevolent benefactors of those countries, as is clearly seen in the oppression they imposed in their vassal States in Eastern Europe.  They were colonisers in a different form.  The ‘education’, particularly the ‘political education’ they provided to their ‘friends, the freedom fighters’, was necessarily indoctrination in the thinking of the Marxist-Stalinists who were in control, and that thinking has endured in those people and in those who have been influenced by them.  The lack of logic in that thinking, the absolute, unthinking conviction that what they were told is right, can be seen in the strict adherence to Soviet economic theory, regardless of the fact that experience has shown convincingly that it cannot succeed in the modern world.  There is no Communist State that can be deemed successful in economic terms, unless, as in the case of China, there is a liberal admixture of capitalism to the control elements that the Communists developed.  The fact that the collapse of the Soviets in 1989 convinced the Whites that there was no longer a risk and so created the possibility of a rapprochement to the Black movements has been ignored in the modern history of South Africa, with the story of a ‘glorious revolution’ being more palatable to the political leaders of today. In truth, Mkonto we Sizwe was an abject failure in military terms.  The transition from the Apartheid Government to the democracy we have was based on the realisation by the Whites that the policies were wrong and unjust, a realisation that built on a long-held belief expressed in the fact that the National Party was never able to gain the two-thirds majority necessary to change the Constitution, even though the leadership of the Opposition Party was markedly incompetent.  The Black governments throughout Africa have almost all adopted the Soviet thinking in their policies, and they have all experienced the lack of success that thinking was bound to bring.  Those that have been fortunate to gain leadership by capable leaders have adjusted those policies, some obviously, such as the new leadership of Tanzania, some surreptitiously, to avoid being seen to admit to a huge mistake that cost their people dearly.  South Africa was fortunate to have a leader in Nelson Mandela who was able to use his mind effectively, although he was constrained in this by those around him who were less fortunate in this regard, and he espoused Western thinking, modified by the need to correct the failings of the incompetent Apartheid governments which became more and more fanatical in their application of the lunatic theories developed by Hendrick Verwoerd.  When Mandela departed the scene of government, he was replaced by more devout and unthinking communists, and South Africa is now led by a man who applies his communist training and tribal thinking without the benefit of education, exposure to modern thought or criticism, one who has surrounded himself with others of the same persuasion, the same moral standards and the same indoctrination.  Zuma is reported not to read newspapers or books, both essential to the development of the capability to think in a structured way and with input from numerous other thinking people.  He runs on autopilot, a set of ideas derived from his tribal, herd boy and terrorist training, and applying the principles absorbed from his Soviet puppet-masters.  It can come as no surprise that he is obsessed with the building of wealth through manipulation and intrigue, the building of power by pay-off and blackmail, and that he has no conception of how a modern economy can provide an improving life for all citizens.  In Zuma’s book, the gain by one implies the loss by another.  The essential requirement, in his mind, of a decent life is the ownership of land, although it is clear that he has no idea of why that should be so.  The construction of a huge mansion by the theft (to call a spade a spade) from the ‘endless’ coffers of the State is a statement of his personal value, regardless of the fact that this symbol of ostentation is located in one of the poorest areas of his homeland, in which it was necessary to build a fire pool because the average citizen lacks an adequate supply of water sufficient to put out a fire, and the level of criminality is high enough to demand the construction of a Police Station dedicated to his protection.  The purchase of a fleet of aircraft dedicated to his personal (and family) use is essential to satisfy his pretensions to glory as the Head of State of a country which can pay for them (in a continent where the average Head of State has difficulty in affording a car equivalent to one of the fleet available to him), regardless of the fact that the economy of his country is performing so badly that its debt instruments hover barely above junk status, and its economic performance puts it firmly in the company of the worst-performing economies in the world.  He has a need to emulate, or even outperform, Robert Mugabe, who still spouts a line of racist hatred and economic garbage as bad as any terrorist organisation, and whose reign of terror and economic incompetence has brought his once-strong nation to its knees, with millions of its citizens either dead of starvation of economic refugees in other countries. He admires Hugo Chavez of Venezuela, who has also brought his country to destitution by the application of policies similar to those in which Zuma believes.  He has a desire to name the streets after the great leaders he so admires, such as Stalin, Lenin, Mao Tse Tung, Samora Machel, Fidel Castro, Julius Nyerere, all of whom are textbook examples of abjectly poor governance, terrorism of their own people and rule by force.  He uses the tool of adulation of dead freedom fighters to inspire hatred of the Whites for their success when contrasted with his failures, without emulating any of good the qualities they may have had.

Taking his background and the self-imposed limitations on his own thinking, one cannot blame Jacob Zuma for the abjectly poor leadership and economic management that have been hallmarks of his terms of Presidency.  Knowing the man and his background, South Africa should have expected those results of him.  After all, one cannot expect a nation in one generation to produce two persons of the class and qualities of Nelson Mandela.  The transition from Mandela through Mbeki to Zuma clearly demonstrated a slide from the top end of the good-bad scale.  We can only hope that Zuma represents the stop mark at the bottom end of the scale, and that his successor will start the climb again.

Zuma still does not get it

All knowledgeable observers are in agreement.  South Africa is in the early stages of a financial crisis.

Business confidence has collapsed, and is still heading south at an increasing rate.  The investor world is in agreement that the country is one tiny step away from junk status.  Economic growth has collapsed, with the World Bank and the IMF in agreement that growth this year will be considerably less than 1%, less than half of last year.  The Rand is testing new limits against all other currencies.  The cost of living is skyrocketing, with prices moving up on a daily basis.  Local companies are looking elsewhere for new areas of investment, with the assurance that the South African market is close to dead.  Inbound foreign investment is dying off rapidly, and existing foreign direct investments are fleeing the country.

The only body that sees a different world is the ANC.  Gwede Mantashe, after the State of the Nation fiasco, stated in a TV interview that we are not in recession.  ‘Recession,’ he said in an arrogant tone, ‘requires three quarters of negative growth, and we have not had that yet.’  His one concession to the truth was that telling word ‘yet’.  Even Mantashe apparently knows that South Africa is on a slide under the leadership of the ANC.

Zuma read his normal SONA speech, apparently oblivious of the fact that he now is acceptable as a leader of the nation to fewer than 16% of the population.  He spoke passionately about how some Black soldiers had died at the Battle of Delville Wood, a hundred years ago, after they had been badly treated by the Government.  He raised the point that, fifty years ago, the residents of District Six, which was a slum, were moved to another area to make way for Whites, a development that never took place.  He also referred to the school riots in 1974, including the killing of Hector Pietersen, riots which were instigated by the ‘freedom fighters’ in order to create martyrs in the fight against Apartheid and have since been sold by the ANC as spontaneous outbursts of student anger.  He referred to the fact that the University of Fort Hare, a Black university attended by Nelson Mandela and Chief Buthelezi, is celebrating a hundred years of existence, conveniently ignoring the mantra that the Apartheid Government refused education to the Blacks.  All of these references were undoubtedly a snide racist attack on the Whites and the Party he claims to be White-dominated, the DA, and then he went on to denounce racism and announce a campaign against racism.  It is a sure sign of the duplicity of the man, a clearly racist attack followed by a denial that he meant it.

The speech made the apparently important point, reiterated in his post-SONA interview a day later, that Government plans to cut the costs of international travel while Zuma’s travel budget has been exceeded by sixty million Rand), the size of international delegations (only a fortnight after an eighty-man delegation attended the World Economic Forum at Davos, during which Zuma failed to attend a panel discussion on Africa), the after-budget parties (although SONA is preceded by a praise singer extolling the virtues, imagined or otherwise, of the Great Leader of the Nation) and similar petty cash items.  Mantashe made the point after SONA that not all of these were new.  After all, he pointed out, there had never been any rule regarding the size of delegations!  Really?  Any competent businessman imposes limitations on expenditure, and demands accounting of the results of the expenditure, which has never been done by the ANC Government!

Zuma carefully avoided any mention of:

• the hijacking of the Government by the Gupta family, together with his own family,
• his admission to the Constitutional Court that he had breached the Constitution and his Oath of Office in regard to his own plundering of State resources and in contravention of a binding Finding by the Public Protector, rumoured to be in excess of R150 000 000,
• his subversion of the rule of law in co-opting the Minister of Police to produce a fictitious report exonerating his boss from any liability for repayment of the stolen funds used for Nkandla, using the flimsy excuse offered by all evil men, including the Nazi war criminals at Nuremburg, that he was following orders,
• his blunder in replacing a standing Minister of Finance with a failed nonentity, which was followed three days later by an about face, all without reason (other than an outright lie) or explanation, although it cost the economy an immediate R500 billion with much more to follow in the form of dramatically-increased cost of borrowing,
• the downgrading of Government securities by the Ratings Agencies, taking them to one tiny step above junk status, which will remove them from the list of permissible investments for most of the organisations that have provided funding to the country and to its banks,
• his breach of a High Court Order that the Government enforce a Warrant of Arrest of al Bashir, permitting him to flee the country while telling the huge untruth that ‘his name was not on a passenger list (!), an outright breach of the legally-binding Treaty of Rome and a flagrant statement of support for a terrorist leader accused of genocide,
• the fact that South Africa’s economic performance alone brought the economic growth of the African continent down from 7,4% without inclusion of South Africa to 4,3% with inclusion, stating that the country faced difficult external economic conditions, of which, apparently, the rest of the continent was unaware,
• the continuing brain drain, of all racial groups, fleeing the disastrous conditions in the country to seek their fortune in other economies, all subject to the same economic conditions,
• the collapse of the mining industry under the weight of trade union demands for uneconomic wages, supported by ruinous strikes accompanied by extreme violence,
• the abject failure of the education system to provide an acceptable education to millions of children, even at the highest cost in the world as a proportion of GDP,
• the continuing disasters in State-Owned Entities, such as Eskom, SAA, SABC, PetroSA,
• the worst drought in fifty years, exacerbated by a total lack of preparation of the necessary supportive infrastructure, even though the drought was known to be on the cards for several years, and by a lack of foreign exchange and economic strength to import the necessary food to prevent widespread starvation,
• the status of South Africa amongst the lowest in the world on indices of
• transparency,
• corruption,
• education,
• attractiveness as an investment destination,
• security of investment, after the country cancelled Treaties in this regard with European countries, the source of most of the foreign direct investment,
• ease and speed of starting a new business.

Zuma read his speech, badly, as though he was going through the motions.  He believes that his hold on the Party is strong enough to enable him to muddle through to the end of his term (remember the FBI’s Mc Carthy and his famous files on Congressmen?) and possibly even longer, by use of his seven thousand-strong personal security force.

After witnessing Zuma’s State of the Nation address, one can be left with only one thought.  Zuma really does not get it, and the ANC will continue to support him for as long as they can, to continue their depredations.  They have no interest in governing the country.  Their only interest is what they can take from it.  Joe Slovo, the leader of the Communist Party responded, in the early years of the ‘new South Africa’, to a question why he believed that the proposed form of government would succeed when all others that had tried it had failed.  “Communism needs capital, and South Africa has that capital.”  “And when the capital is exhausted, what the?”  His famous response was “Then we’ll try another system.”

Cry the Beloved Country.

Mugabe and the New Order in Africa

The hate-filled and inflammatory speech of President Robert Mugabe during the State Visit to South Africa, following on the inane and giggling speech of Jacob Zuma must give cause to fear to any intelligent and discriminating observer.  Mugabe, as the current President of SADEC, left no doubt as to his allegiance to China and Russia, and as to his hatred for Britain the America, as representatives of the West.  His derogatory comments about Cecil John Rhodes made it clear that he is the motivator behind the current rash in South Africa of hatred against Rhodes and the Whites who did so much to develop the Dark Continent to what it is now. 

One must take the speech of Mugabe against a background of election-rigging, killing of the family members of the Opposition candidates, torture of thousands of Zimbabweans, unlawful expropriation of productive White-owned farms which were handed to Party favorites, internal terrorism by teenage ‘military veterans’, siphoning off of huge amounts of money to his personal bank accounts, and ‘peacekeeping actions’ by the Zimbabwe military in the DRC, at a time when Mugabe vetoed the payment to a South African country of the cost of water treatment chemicals to be used in an Opposition-held city, in order to gain a shareholding in a diamond mine in the DRC.

Mugabe attacked the West for the lack of equality by African nations in the United Nations Security Council, mentioning in a rather threatening way the role that might be played by the Arab nations against the West.  Given the influence by Mugabe in the African Union, the West should be concerned at the implicit threat by Mugabe to withdraw Africa from dealings with the West.  The drift to radicalism by several of the Arab and African Muslim nations is a trend that Mugabe could easily use to widen the gap between Africa and the West.  Mugabe went to considerable lengths to condemn the actions of the West in Libya, in Iraq and Iran, praising the leaders of those nations, particularly Saddam Hussein and Muammar Gaddafi as worthy leaders of democracy in their countries.  Of course, in comparison with Zimbabwe under this bloody dictator, they might have been examples of good governance, but in a comparison with any of the true democracies, there can be no doubt that those men ranked alongside Stalin and Castro.  The thought of permitting African countries under the control of genocidal dictators such as those men and Mugabe to dictate the policies and actions of the United Nations is a cause for many sleepless nights.  During his rambling discourse, Mugabe stated that the ‘colonial master of Rhodesia, Britain, threw helpless men and women down a mineshaft.  It has been conclusively proven that Mugabe’s ‘war veterans’ were responsible for that act, as part of a genocide of the opposing tribe.  However, as both Mugabe and Zuma have frequently demonstrated, truth is a concept that is foreign to them and their ilk.

The fact that Zuma, and the ANC, would welcome a man like Mugabe to a supposedly civilized country such as South Africa speaks volumes about their true views, allegiances and objectives.  The fact that he was permitted to make such a speech on a public platform, with Zuma giggling his acquiescence in the background, must be taken as a warning by any thinking person in the country.  It has long been suspected that the ANC views the Mugabe dictatorship and its actions and policies as a role model for an African government, and the speech by Mugabe now leaves no doubt as to where South Africa is headed.

The title of this blog is ‘Questions for South Africa’.  The answer to many of those questions is now clear.