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[OPINION] Ethical leadership: Debating the notion of state capture

What is the ethical foundation of South Africa’s democratic society? In what way is this rooted in the struggle against apartheid colonialism? How do we define state capture; and what are the prospects for society and the ANC to re-assert ethical leadership?

South Africa is emerging from a period in which, to quote a resolution of the 54th National Conference of the African National Congress (ANC), “state capture or simply corruption… undermined the integrity of our institutions, cost our economy hundreds of billions of Rands and contributed to the further impoverishment of our people”.
It is therefore critical for us to reflect on issues pertaining to the ethical foundation of South African democracy, where we went wrong and how we can correct the weaknesses identified by the Conference.

DEBATING ETHICS

In the evolution of human society, there have been many attempts at setting out rational frameworks for human behaviour. In this regard, the works of various philosophers bear relevance. Immanuel Kant championed the Categorical Imperative, asserting that individuals should act as if they are defining a universal law; relate to other human beings as an end and not as a means; and, as rational beings, regard themselves in exercising “freedom of will” – whether in authority or not – as “giving laws” to the rest of society. Friedrich Hegel grappled with the matter of the subjective will and whether what it recognises as valid is necessarily good. Ultimately, he argued, the authority of ethical laws, not just what is ethically good, should be fundamental in determining the conduct of individuals. In this context, the universality of ethics should be represented in the collective: made up of the family, civil society and the state.

There is much in the conceptualisations of Kant, Hegel and others that rhymes with the notion of ubuntu –‘I am because we are’. Further, the more positive in virtually all religions across the globe also articulates a humane approach to ethics in particular and human relations in general. These representations of what is meant to be human and humane, constitute an attempt at managing social relations and regulating impulses which otherwise would make us less human.

But Frederick Engels, at the graveside of Karl Marx, makes the important point that Marx’s greatest contribution was his assertion of the “law of the development of human history: the simple fact…that the production of the immediate material means, and consequently the degree of economic development attained … during a given epoch, form the foundation upon which the state institutions, the legal conceptions, art, and even the ideas on religion, … have been evolved, and in the light of which they must, therefore, be explained, instead of vice versa.”

Engels however, does acknowledge that the superstructure – including ethics, art and religion – do “also exercise their influence upon the course of the historical struggles and in many cases preponderate in determining their form.”

ETHICAL FOUNDATIONS OF STRUGGLE

In this context, the ethical foundations of the South African struggle against apartheid colonialism should be sought in its core objective: that is, to resolve the social antagonisms created by this system in the form of national oppression, class super-exploitation and patriarchy.

The injunctions in the 1955 Freedom Charter that “no government can justly claim authority unless it is based on the will of all the people”, and in democratic South Africa’s Constitution that the national democratic society should “improve the quality of life of all citizens and free the potential of each person”, aptly capture these ethical principles. The wars of resistance against colonial incursions and the formation of the African National Congress (ANC) to fight modern manifestations of colonialism were, by definition, acts of transformative ethics. So were the responses to intensified oppression and repression, in the decades that followed, to raise the struggle to higher levels of militancy, across the four pillars of mass mobilisation, underground organisation, armed struggle and international mobilisation.

The ultimate in the ANC’s ethical response was to lead in the process of concretely defining the constitutional antithesis to the system of national oppression. Thus were developed the constitutional principles for a democratic South Africa towards the end of the 1980s and early 1990s. These principles, informed by the African Claims document6 and the Freedom Charter included not only political rights; but also, other generations of human rights such as social, economic, gender and environmental rights.

In other words, ethics cannot be separated from the framing vision of an equitable society and the struggle to attain it.

DEBATING STATE CAPTURE

The notion of state capture gained currency largely in discourse around institutional changes in post-socialist Eastern Europe. However, it is acknowledged by objective analysts that it is a phenomenon prevalent in many other regions, including established democracies such as the United States of America.

State capture is defined in some literature as “…the efforts of firms to shape the laws, policies, and regulations of the state to their own advantage by providing illicit private gains to public officials...

…firms seek to shape decisions taken by the state to gain specific advantages, often through the imposition of anticompetitive barriers that generate highly concentrated gains to selected powerful firms at a significant social cost. Because such firms use their influence to block any policy reforms that might eliminate these advantages, state capture has become not merely a symptom but also a fundamental cause of poor governance. In this view, the capture economy is trapped in a vicious circle in which the policy and institutional reforms necessary to improve governance are undermined by collusion between powerful firms and state officials who reap substantial private gains from the continuation of weak governance.”

Others argue that state capture can be distinguished from ordinary corruption in that “while in cases of corruption the outcome (of policy or regulatory decision) is not certain, in cases of state capture the outcome is known and is highly likely to be beneficial to the captors of the state.”

“Also, in cases of corruption (even rampant) there is plurality and competition of ‘corruptors’ to influence the outcome of the policy or distribution of resources. However, in state capture, decision-makers are usually more in a position of agents to the principals (captors) who function either in monopolistic or oligopolistic (non-competitive) fashion.”

Transparency International goes further to assert: “State capture can also arise from the more subtle close alignment of interests between specific business and political elites through family ties, friendship and the intertwined ownership of economic assets.

The main risk of state capture is that decisions no longer take into consideration the public interest but instead favour a specific group.”

In recent South African debates on state capture, there have been attempts at throwing red herrings across the trail to rationalise some of these practices. Let us look at some of these arguments.

It’s in the very nature of the system because capitalists are the ruling class: There may be an element of truth in the assertion about the system and the ruling class. But, as argued earlier, the current state is one in transition, with the classes and strata that brought about liberation gradually wresting control to pursue a national democratic society. Among these, of course, are the black bourgeoisie; and the established capitalist group who are the owners of most of the country’s capital have much sway over the direction of economic policy. This cannot be conflated with “unobvious channels” through which state capture takes place, and the alignment of interests “between business and political elites through family ties” and other links. Further, what the definitions of state capture may not have taken into account is that this can also be exercised by other sectors in society, as reflected in the recent report on capture of some education departments (national and provincial) by teachers’ union(s).

Complaints against state capture are a matter of sour grapes as a black-owned company outstrips the old establishment: Many black companies have been on the rise in various sectors of the economy. Most of them have benefited from policies of Black Economic Empowerment including government’s preferential procurement and financial support from development finance institutions. This is a transparent generic policy that applies to all who qualify. There may even be instances of corruption in the execution of the policy; but even then, there would be “plurality and competition of ‘corruptors’”, as distinct from activities that favour captors of state institutions.

All capitalists do seek to influence policy decisions: Of course, all classes and strata, as well as interest groups, try all the time to influence state decisions in their own interest. They lobby, cajole and also campaign to influence public opinion. There will always be policy contestation, and business does seek to assert its interests and use leverages it commands to attain its own objectives. So do other social actors, including the working class; and some may even try corruptly to purchase their way into favour, influence appointments and so on. This is par for the course; and it is definitely different from any of these players being the decisionmakers as such.

The state has to work with business: Indeed, it is in the nature of a developmental state that it should continually interact with all social role-players and mobilise them behind a vision and strategy for growth and development. The state should be embedded among business (and other sectors); but it should remain autonomous in terms of the content and processes of decision-making. Working with business should not translate into state actors working for, and at the instruction of, a particular business entity.

All leaders have skeletons and should, therefore, curl up and shut up: There indeed may be skeletons in many cupboards and, as the saying goes, for every ‘corruptee’ there is a ‘corruptor’. Those who are aware of such skeletons should lead the law-enforcement agencies to the burial sites rather than seeking to blackmail the party and society into silence.

For state capture to happen all arms of the state should have been captured: It is quite true that for the captors to act “in a monopolistic or oligopolistic… fashion”, these principals would need to have captured critical pillars of the state. But this does not necessarily mean that they should exercise control over each and every arm of the state. State capture can exist at a micro-level, as in the case of the allegations about trade union(s) and departments of education; or in various institutions at provincial and local levels. At a macro level, it may relate to some or all arms of the state. And it is a matter of simple logic that state capture at a macro-level can include the capture of the nerve centre or critical organ of the state colossus. Where such capture relates to the very pinnacle of government, there would be few other perfect examples of state capture. This is more so if the person implicated is, to quote the Constitutional Court, “a constitutional being by design … the quintessential commander-in-chief of State affairs and the personification of [the] nation’s constitutional project”.

Therefore, state capture is about state decision-makers being “agents to the principals (captors)”. An interesting allegory for this is the strange parasite, the tongue-eating louse or isopod. The parasite severs the veins of a fish’s tongue until the tongue falls off. It then attaches itself to the stub operating as if it was the fish’s tongue; it survives by feeding on the fish’s blood or mucus. Unlike other parasites, the isopod does not kill its host; and similarly, it would not be in the fish’s interest for the isopod to leave or to die, as the fish no longer has its natural tongue…. organ and organism capture par excellence!

Can state capture be sustained without another form of institutional capture: in this case, political party capture? Where the captured straddle the party, the government and the state, direction and sequence of the capture can be either way. Clearly, state capture is bound to be faster and more effective if the party is on-side, or if the captured exercise authority and leverage across both entities. Where the relationship between party and state is not managed as demanded by constitutional and legal prescripts, the capture of either the state or the party easily transmutes into the capture of the other. Some leaders, once ensconced in state offices and once captured, can simply ignore or defy the party – creating a conundrum difficult to address.

CONCLUSION

One of the greatest challenges in rooting out unethical conduct derives from the fact that those who seek to
build an equitable society interact every day with the rapacious licence of a system that encourages greed and crass materialism. The cadres of social change, therefore, need to be inspired by a transcendental posture: they should be able to resist the constraining and corrupting influence of this system and not bow to its dictates as if they are the natural order of things.

This requires clarity of thought on the value system that should underpin the vision of a democratic and equitable society.

Critically, there should be a strong element of compulsion: an effective state, with security agencies, prosecution authorities, revenue services, public protector services, judicial institutions and auditing services that guarantee accountability and just deserts for wrongs committed.

For the ANC, a combination of ethical rectitude informed by principle, and the self-interest of its cadres, should inspire steadfastness to the injunctions of the 54th National Conference. This is because failure to address corruption and state capture will not only undermine the cause of social transformation and the legitimacy of the democratic state and polity. In a democratic society such as ours, it will also result in devastating electoral punishment and the emasculation of many a political career.

Joel Netshitenzhe is an ANC NEC Member and the Executive Director of the Mapungubwe Institute (www.mistra.org.za). This is an extract of the opinion which first appeared in ANC's Umrabulo Issue 44, click here for the full piece.

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