DAVID MAIMELA: State capture and its discontents: What lies ahead for SA?

opinion

The conversation about the state and future of South Africa is highly strained and fractured. The reason is simple: the politics have evolved to a point where the transition to a new South Africa has been cast anew by experience rather than the aspirations of the early post-1994 period.

One of those strained conversations to have today is around the distinction between the concept and practice of ‘state capture’ on the one hand, and ‘corruption’ on the other.

According to the dominant narrative, there is no distinction or necessity to see the nuances between each of the concepts. Mainstream media and general public discourse have taken it as a given that the two concepts are, in fact, the same. Nothing can be further from the truth.

I do not support the dominant narrative(s) around ‘state capture’. However, I do support the ‘anti-corruption’ programme in government and elsewhere in society. And I believe the majority of South Africans do too.

In the entire state capture spectacle, many seem to forget a simple fact that capitalists exist to capture the state. They do this in various ways, including by directing public policy decisions to favour their interests. Organised labour and the church, for example, do the same. Interestingly, the influence of labour or the church on the state does not receive the same amount of scrutiny and has certainly not made it to the Zondo Commission.

The idea that certain influences or interests that have a bearing on the functioning or even orientation of the state are more important and more deserving of scrutiny than others is itself a biased view and certainly ideological.

THE NATURE OF STATE POWER

Some time back in 1998, the governing informal coalition called the Tripartite Alliance decided to appreciate that as the new government, they would be exercising political and state power within a capitalist economy.

And so, they said in the State, Property Relations and Social Transformation debate:

“Central to the issue of the role of the state is the question of public resources and their utilisation. Thus, an important indicator of control of state power is the capacity or otherwise to set rules for, or actually determine, the accumulation and employment of capital. Indeed, the current state is restructuring the budget in line with the objectives of the new ruling bloc; it is restructuring assets in the hands of the state along the same lines; it is setting out the framework within which capital is accumulated and allocated through measures such as Competitions Policy, Labour Legislation, Procurement Policy and so on.”

Further to the appreciation of operating in capitalist economy, the ANC in particular defines the relationship between the state and private capital as ‘contestation and cooperation’. Indeed, the Competition Commission, among other regulatory bodies, is one such instrument that regulates this relationship. For example, if a proposed merger between two businesses has the potential to promote greater investment, growth and jobs, the merger is approved. But if the merger is harmful to the economy, the public or national interest, the merger is not approved. Another example is when abuse of dominance is investigated and sanctioned by the competition authorities. That is what is meant by ‘contestation and cooperation’.

THE CONCEPT AND MANIFESTATION OF ‘STATE CAPTURE’

In the public discourse, the concepts of corruption, state capture and contestation for state power are sometimes used interchangeably and thus obfuscate the debate rather than illuminate it. So, what is state capture and how does it manifest itself?

There are at least two conceptions of state capture.

The first one is a narrow definition. It refers to parochial (unsophisticated) capture which subverts rules, institutions, and acceptable norms to achieve its aims.

The second one is a broad definition. It is more sophisticated wherein the process of capture itself not only follows established rules, institutions, and norms, but generates its own legitimising rules in the instance where the rules are not clear or favourable. This kind of conception suggests that not all forms of state capture are problematic.

Historically, the state-business-society nexus has never proceeded on a straight line. In their quest for upward mobility in the ladder of accumulation, white businesses working with the ‘white racist state’, as the late Professor Magubane called it, collaborated at different times of our history to capture the state, often in the most brutal, direct, exploitative, and oppressive manner.

For example, the Migrant Labour System, Colour Bar Act and later the Group Areas Act, as well as the homeland system, were a form of formal and systemic state capture at a grand scale. It was about securing regular cheap labour, controlling the movement of people and reserving jobs for whites. So, the mining houses propped up the state and in return, the state provided all sorts of institutional arrangements to secure the survival and profiteering motives of the mine owners and other related players in the primary sector.

These were state-sanctioned interventions influenced by private business. In part, that is how the Minerals-Energy-Finance Complex developed in South Africa.

THE CONCEPT AND MANIFESTATION OF CORRUPTION

Put simply, corruption refers to acts of illegality or criminality as defined in law. Corruption is not necessarily state capture. Yes, some acts of state capture can amount to corruption but, this is not the same as saying, every state capture action leads to corruption or crime. Put differently, it matters how the state is captured. Some forms of capture are legitimatised by practice, precedent, norms and standards and even law itself.

Corruption too has a long history in South Africa. Steven Friedman puts it nicely:

“Corruption in South Africa dates back to colonisation in 1652… The period of Dutch rule he began, which lasted until 1795, was marked by tax evasion and corruption by public officials…The most prominent colonialist of the time, Cecil John Rhodes, was forced to resign after he gave a friend an 18-year monopoly catering contract for the government-run railways… Given this history, it is not surprising that corruption was a constant feature of the apartheid period.”

Friedman sees some continuities in the practices and culture of corruption between the colonial, apartheid and the democratic state. In this regard he states that:

“The seeds of post-1994 corruption were, therefore, deeply planted in the country’s past. But corruption since then is also a symptom of another way in which the past was carried over into what was meant to be a new society. Before 1994, the groups which controlled the state used it to ensure that they controlled the economy too…What today is called “state capture”, the use of the state to serve private interests, was common to Afrikaner and British rule.”

If our state was functioning optimally at all and had sufficient capacity, it would not need the commission on state capture, rather it would simply pursue every alleged act of corruption as part of the normal course. In other words, if the commission is to be successful in its work, it should report on one thing only: why is it that the state and its criminal justice system is unable to detect, investigate and prosecute corruption?

Because as I have intimated earlier, state capture is not the same as corruption.

All that the Zondo commission will achieve is to say: this kind of state capture is of low quality, things need to change, here are the possible rules to reset the game. The commission will not do away with state capture proper or as defined in this discussion.

Why? Because state capture – if understood in the broadest sense – is a continuous political contestation between various interests in society which vie for the control of state levers in order to influence the distribution of resources. One hopes that this ordinary contestation in the polity will not be criminalised in the name of fighting state capture or corruption.

WHAT IS TO BE DONE?

I have already suggested some approaches above, but we need some practical suggestions too.

Firstly, at a more strategic level, South Africa needs to have a state that enjoys ‘embedded autonomy’ and has a meritocratic bureaucracy that is firmly focused on the imperatives of development. That is the orientation and capacity you need for a developmental state. ‘Embedded autonomy’ means that the state ought to be autonomous enough to avoid narrow sectional capture and yet, sufficiently networked in society in order to drive national development effectively.

Secondly, the country needs to formalise and regulate the lobby industry in South Africa, once and for all. So that the rules of engagement between businesspeople, politicians and bureaucrats are fair, equitable and transparent.

We have reached the stage where we need to monitor and assess the influence of the state-think-tank-business nexus on public policy. Both business and think-tanks are important players in the orbit of state capture. For example, KPMG, Trillian, Bain, McKinsey etc, through their lobbying work, have impacted our governance and democratic system without any accountability. Ideally, in a robust democracy, all power must be checked and held accountable.

There is danger that if state capture as a concept is not properly defined, every approach, engagement, relationship or transaction with the state may be defined as state capture and therefore, undesirable or even criminal. Indeed, if we are not careful, ordinary day-to-day lobbying may be criminalised. That is if you consider the worst-case scenario.

As things stand currently, even before the Zondo commission delivers its report, government officials and politicians are now too scared or even unsure if an ordinary invitation for a coffee chat with a businessperson who is exploring a business opportunity, constitutes an act or a process of state capture.

Even those who have funding and just want to understand government goals and regulation so that they can tailor their corporate strategies and investment to align with government may be increasingly unsure as to what is right and wrong. That is why it is important to define the form of capture or lobbying that breaks the rules.

Finally, we need public policy reforms on political deployment. We need to strengthen the policy and institutional processes, as well as the criteria for selection of political deployees in order to ensure that quality cadreship is deployed. We also need to decide which layer(s) of the bureaucracy are open for political deployment. Such a policy instrument must ensure that the deployment process is transparent, rules-based and produces better policy outcomes. Already, there are many departments, municipalities and government agencies domestically and internationally that can serve as best practice from which comparative lessons can be drawn.

If these things are not done, we will continue to confuse each other and perhaps waste even more time soon with a second commission of inquiry into state capture. I hope that is not what lies ahead.

David Maimela is executive director of The Polisee Space, a progressive pan-African think-tank.

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