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NO LIFEJACKETS IN A SEA OF CORRUPTION – IVO VEGTER

BIZNEWS / 17 MAY 2022 - 05.03 / EDITOR BIZ NEWS


This piece gets to the core of South Africa’s ongoing moral, financial and social justice impasse. Ivo Vegter, writing in the Daily Friend, says Ramaphosa’s nailing his colours to a ‘fight corruption mast’ (with the flag flying at solemn half-mast), is a total diversion. The real problem lies with our socialist government incentivizing the selection of the most venal, corrupt officials, which is why people join the ANC.


When insiders like former president Thabo Mbeki believe the movement is about to collapse under the weight of bad apples and corruption-corroded systemic dysfunction, then you must know. It’s handy to say you’re fighting corruption. Let’s even assume Ramaphosa has ‘really tried’. Or that he’s one of a handful of incumbent ANC leaders in government doing so. They’re flotsam in an ideology-based ecosystem that gave birth to the Zuptoids and it’s still very much in place, with daily examples of its oily existence. – Chris Bateman



The ANC’s ideology rewards kleptocracy

By Ivo Vegter*


People don’t join the ANC because they want to serve the people. They join the ANC to get rich. This is the natural outcome of a socialist ideology.

More than four years into his presidency, nobody would dispute that Cyril Ramaphosa’s fabled ‘New Dawn’ (in which your present columnist didn’t believe, even for a moment) has failed to materialise. It is common cause that the ANC, even with the best will in the world, is not capable of reform.

Only 20% of South Africans believe their political system does a good job of representing the views and interests of citizens, an IPSOS survey revealed in 2019. Seventy-nine percent believe the country has been captured by an elite that is corrupt, obsolete and unreformable.


It is customary to point to particular bad apples. Former president Jacob Zuma is the poster child of corruption, of course. Other members of what has become known as the Radical Economic Transformation faction are also named and shamed. But one bad apple ruins the bunch. The rot is everywhere. Even loyal ANC insiders, like former president Thabo Mbeki, are of the view that ‘the movement is about to collapse’.

Still, they cling to the faith that dealing with corruption will save the ANC. What they fail to recognise is that it isn’t possible for the ANC to deal with corruption.

Its guiding ideology incentivises corruption. People don’t join the ANC because they want to serve the people. People join the ANC in return for cushy jobs with luxury benefits, or to be able to influence tender awards to benefit themselves, family, friends or their business network. The promise of profitable tenders and lavish fees is what attracts people to the ANC.

Consider the latest scandal to rock Eskom: fuel theft at Kriel Power Station. Implicated in the scam are not only dodgy fuel-truck operators, but also corrupt Eskom officials and corrupt police officers.


This is normal. There is hardly any interaction between government and the private sector that is not tainted by corruption. No tender is above suspicion. At all levels of government, from small-town municipalities to national government, bribery, corruption, cronyism and patronage is business as usual for the ANC.

Honest officials either get booted by dishonest colleagues who cannot afford obstacles to their self-enrichment, or get voted out by people who need dishonest officials to turn the patronage taps and the flow of loot in their direction. ANC members blatantly vote officials up on charges into senior positions. They all hope to get a turn at the trough before their rivals do.


Almost everyone

It can be puzzling to look at a kleptocratic feeding frenzy like the South African Government and comprehend exactly how so many people got so corrupted. How can it be that almost everyone in government, and almost everyone doing business with government, is complicit in venal self-dealing at the expense of the people they promised to serve? How can it be that literally every state-owned entity – the South African Weather Service being the latest – is not only riddled with corruption, but failing in even its most basic functions?

The problem lies in the incentives that the political system creates.

Inherently, everyone is motivated by self-interest. Feeding, clothing and housing oneself and one’s family is the primary driver of productive activity.

‘Productive activity’ means activity that meets the needs and wants of other people, to the extent that they willingly pay for it. This could be labour, manufacturing, farming, or any industrious activity that produces goods and services that the market (meaning ‘other people’) desires.

Improving the material conditions of one’s neighbours and business associates is next on the list, because that makes it easier to raise one’s own prosperity. So it goes, in ever-widening circles. One’s neighbours or associates do better when the whole community does better. The community does better when the whole town or city does better. The town or city does better when the province or country does better. And the country does better when global trading partners do better.

Given that self-interest is the driving force behind productive economic activity, the next question becomes who will pay for that activity.

In a free market, the value of the activity is assessed by self-interested buyers, who will refuse to pay for poor work, shoddy products or bad service, and refuse to tolerate embezzlement or fraud. That doesn’t mean there never is theft, or fraud, or wasteful spending, but since all or most of the buyers are private, self-interested individuals or companies, there is a natural force resisting them.

In a country that builds up a large, centralised government, however, with great power over private businesses and individuals, great influence over the economy, and large and expanding public works expenditure, the government becomes the biggest buyer of goods and services, and the biggest cash cow.


Coercive power

In government, the incentives are not at all clear. The money that government uses is taxed from other people. The products and services that government buys are intended for other people. Individual government officials have no vested self-interest to ensure government gets value for money, or that money is well-spent, or that contractors deliver on their promises.

Corruption occurs when coercive government power – the power to award contracts, to make laws, and to regulate business – is for sale to private interests. As much as government apologists want to blame the private sector for this, the private sector is no monolithic entity.

There will always be private interests with a desire to corrupt government power to benefit themselves, and harm their competitors, just like there will always be thieves. The trick is to establish a system that makes thievery more risky than honest work.

The root of the problem is the coercive power that is for sale. The less power a government has, the less power there is that can be corrupted.

There’s an old rule in economics: if somebody buys something for themselves with their own money, they will be mindful of both cost and quality. If they buy something for someone else with their own money, they will be mindful only of cost. If they buy something for themselves with other people’s money, they will be mindful only of quality. And if they buy something for someone else with someone else’s money, they will be mindful of neither quality nor cost. Government is the last of these. A free market is the first.

The reason the ANC government is building a large and centralised government is because of its socialist ideology. It views the state as the primary means of providing ‘a better life for all’. The ideological drive towards socialism, and eventually communism, known internally as the National Democratic Revolution, is enshrined in countless ANC ‘strategy and tactics’ documents, adopted at every ANC Congress.

Socialism requires a large government, since it progressively usurps private production in the drive towards public ownership of the means of production. That, in turn, expands the opportunities for corruption and self-enrichment at the expense of the people.

It follows, then, that socialism is the ideology that leads, inevitably, to the corrupt kleptocracy that we see in South Africa.


(As an aside, most European countries and in particular, the Nordic countries, are not socialist. They rely largely on vibrant free markets for their prosperity, and recognise individual freedom and choice. Merely taxing a free market to spend on the general welfare is not socialism. Socialism requires public ownership, through the state, of the means of production; those means being land, capital and labour.)

The further government usurps economic activity with state-owned enterprises, extravagant public works, or through government-protected private monopolies and cartels, the less opportunity there is to business in the free market, and the more opportunity becomes available only by corrupting the government.


Perverse incentives

This is why people go to work for a socialist ruling party. Not to benefit citizens, but because that is the best way to benefit themselves, and those around them. The reason the ANC has become a party of kleptocrats, in which honest officials have no place, is because of the inherently perverse incentives that a socialist government creates.

Everyone wants a slice of the action, and most of the action is in government tenders. This attracts dishonest, self-seeking people, and because they end up in charge of spending other people’s money on things for other people, they have no incentive to take any care of quality or cost.

In a free market, one’s self-interest has a countervailing force in the self-interest of others. Without satisfying another’s interests, one cannot satisfy one’s own. In a socialist government, this countervailing force does not exist, so the self-interest of officials is the only motivating force at play. Socialist government incentivises the selection of the most venal, corrupt officials, and that is why people join the ANC.

This results in a nexus of greed and corruption between government and big business, jointly controlled by the ruling elite. For those not among the ruling elite, the space for productive activity becomes ever-smaller.

South Africa is far from unique, of course. Russia, China, Venezuela, Zimbabwe, Romania, Bulgaria, and countless other countries set out on a road towards a socialist Utopia, only to find that what lay on the horizon was not a lush oasis, but an endless desert filled with bandits and thieves.


To put an end to kleptocracy in South Africa, it won’t suffice to ‘act against corruption’. The ANC has no appetite for acting against the corrupt, because it consists, almost entirely, of corrupt people. They’re all in it for themselves. Even a supposed reformer like Ramaphosa became a billionaire by exploiting the government’s coercive power to enact black economic empowerment. He is part of the kleptocracy.

The root of the problem is the socialist, ‘developmental state’, ‘state-led growth’ agenda of the ANC. Without an ideological reversal, the incentives for kleptocracy will remain in place.


What South Africans need to decide is whether they can expect an ideological reversal from the ANC. If not, they need to act decisively at the polls to bring that ideological reversal about in government without the ANC.


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LINK : https://www.biznews.com/thought-leaders/2022/05/17/anc-sea-corruption-ivo-vegter


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