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“State Capture” – Myth or Reality?

By BO Staff Writer

What is “State Capture?” There is an assumption that we all know what these words mean. We all repeat these words and the media uses them as short hand to refer to the controversial relationship between the State President, Preasident Jacob Zuma, and the Gupta family. It has come to pass that, “State Capture” refers to the Guptas alleged take-over of the state. Is this claim valid?

To understand the uses and abuses of “State Capture” we may have to “uncouple” the two words. Let us start with the State – which is being captured – and why it is so important? In literature there are in general two conflicting understandings of the State. The one is a bourgeoisie or liberal view, the other is a Marxist view. The liberal view emanates from such classical liberal thinkers as John Lock and Thomas Hobbes. They argue that the State is a neutral regulator of the affairs of society. To this end Hobbes tells us that, before the concept of the State came into being, life was “solitary, poor, nasty, brutish, and short”. Accordingly, the state served to regulate or, in today’s language, to create an “enabling environment”.

The Marxist view of the state criticises the liberal view. It clarifies that the State is never neutral, nor is it above society. From a Marxist perspective, the liberal notion that the State is neutral serves as an ideological strategy of those who control the State to make society believe that the State is serving the interests of all when in fact it is serving the interests of a particular class. Karl Marx is credited for having argued that, the “…executive of the modern state is nothing but a committee for managing the common affairs of the whole bourgeoisie”. Vladimir Ilyich Lenin,  one of the best Marxists, took Marx’s idea further and explained that, “(t)he bourgeoisie controls the economy, therefore they control the state. The state, in this theory, is an instrument of class rule.”

There is some agreement that the State encompasses three arms of government – the Legislature, the Executive and the Judiciary. The State is able to impose its rule because it has “monopoly over the use of violence”. In the liberal tradition there exists, of course, a prior condition that there is a “social contract” which ensures that society gives away some rights to be able to gain in return more rights and protections. For example, one is not allowed to drive without a seat belt – this right is surrendered to the state. Another example is, even if one so desires it, one does not have the freedom to murder.

In the South African context, the modern state was constructed from 1652 with the arrival of the settler colonialists. A Marxist view would inform us that the SA state is an instrument of colonial rule which has ensured over the years that the interests of whites predominates. So, within this context, was the State “captured” by blacks in 1994 or did it become a neutral regulator?

If you take the liberal view you are inclined to say that, with the adoption of the new constitution, the State became a neutral force that regulates the affairs of all after promising equality to all. The Marxist retort pointedly suggests that if you want to know which class has control over the State, just look at who controls the economy. Today black people own only 3% of the Johannesburg Stock Exchange (JSE). Since the JSE is the more reliable indicator of economic ownership, coupled with the reality that only 35 000 white families and trusts own 80% of the land, means that the State is de facto (in fact) de jure (by law) controlled by white capital.

The executive committee of the International Monetary Fund.

Lets return the words to their place having dealt with the State. “State Capture” seems to be a very recent coinage by both the World Bank and the International Monetory Fund (IMF). These institutions are notorious for having ruined the economies of the third world through their harsh neo-liberal economic medicine, which leaves behind devastation. So we must have ideological suspicion on their concepts because they seek to naturalise the economic power holders through making them invisible.

According to the World Bank, “State Capture” “is, the efforts of firms to shape and influence the underlying rules of the game (i.e. legislation, laws, rules, and decrees) through private payments to public officials.” To this end the IMF is in agreement. This definition, it must be stated, takes the prior question of economic ownership as being not important. An alternative perspective would argue this definition is impervious to legalised theft where the laws support the economically dominant class. What is being currently equated to state capture is not a proper description because the state has long been captured by the capitalist class.

In South Africa we saw the power of white capital play itself brazenly around the Nhlanhla Nene sacking saga. Within three days the ANC was forced by white capital to fire Van Rooyen and hire Pravin Gordhan as Minister of Finance. The whole narrative turned into Gordhan the saviour and Van Rooyen the candidate of the Guptas who in turn tried to capture the State. The power of the ruling class naturalised and legitimised their actions. What had happened in this process is that white capital has done exactly what it accuses the Guptas of doing. In this respect, because it  controls the narrative, white capital was not seen as “State Capture” but as “State Rescue”. Truth is that the eight capitalists who met the ANC leadership on the 13th December last year are open to criminal charges for undermining the constitution through bullying and possible corruption because of their direct interest in the economy managed by Gordhan. As we know only the President is allowed to hire and fire ministers.

There is today in South Africa a battle over the economy between white capital and the Gupta family. The term “State Capture” was first used by global publications associated with white capital to project the Guptas as an unwelcome factor in the politics and economy of South Africa. This seems to be a fight back after President Zuma has been increasingly “looking East for a family feast” type of approach. In what we call a “parallel power praxis”, Zuma seems to have abandoned the State and its structures which are pro white capital and doing his own thing with the Guptas and other components of BRICS. This must have angered white capital to a point of them directly getting involved in instigating either the “Guptas must go” campaign or as we have seen increasing calls, and recently from Johan Rupert, for the President to step down. Those who have captured the State are crying about State capture. What we have here is a fight over defending the white domination of the South African economy.

It is instructive to see the power of the Rupert family. In his book, The Other Side of History: An anecdotal reflection on political transition in South Africa, Frederik Van Zyl Slabbert lets us know that President Mandela consulted the Ruperts “about major decisions”. Slabbert tells us: “In July 1998 he asked Rupert and Marinus Daling, chairman of Sanlam for their views on the proposed appointment of Tito Mboweni… as head of the Reserve Bank”. Slabbert further says that Rupert reacted negatively saying it would cause the rand to fall by some 30%. It would appear that Johann Rupert is “pissed off” because the site of power is no longer Stellenbosch but allegedly Saxonworld.

“State Capture” is a tool in the economic war. The coming ANC elective conference has added a complicating dynamic. Those who lost out in Polokwane and in Mangaung are going for broke and have identified the Guptas as a lucrative well from where to mine both political and possible financial rewards. An anti-Gupta posture immediately provides favourable media coverage with oodles of amnesia of any past transgressions. The Deputy Minister Mcebisi Jonas under normal circumstances would have his name preceded with accusations of corruption.

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