Bankruptcy of Ivo Vegter’s Economic Ideas

January 7, 2008

Smuggling anti-Freedom Charter Ideas into the ANC – The Case of Ivo Vegter

December 24, 2007

Ivo Vegter publishes a blog of his own. He is also a regular blogger for the Mail & Guardian newspaper. He recently released an article going by the title “ Zuma: Reap the Whirlwind“. In the article he tell his readers that:

That’s what you get for half-hearted commitment to market reforms and economic freedom. Although many praise the ANC for having steered a sensible economic course, I’m far from enamoured with its record.Instead of freeing the economy, it has largely pursued a brand of national socialism not unlike that followed by the racist National Party during the apartheid years. That the intended beneficiaries of the government’s policy were infinitely more fair doesn’t change the fact that it tried — and failed — to deliver services that are beyond the ability of a government to deliver. If national socialism didn’t even work for a tiny fraction of South Africa’s population, what chance would it have of providing for the entire population?

IvoVegter does not want the ANC to have Zuma as its leader for fear of”national socialism not unlike that followed by the racist National Party.” What does Ivo Vegter want the ANC to do instead? He goes to great lengths to pursuade the ANC to reject its national socialism in favour “market reforms and economic freedom”. What is market reforms and economic freedom? And what is national socialism?

Ivo Vegter comes across as a clever rightwing economist of the type that would swear by the virtues of privatization and capitalist free markets. I wrote to him in reply to his article, asking him to respond to two specific questions:

  1. Are you saying to us that by pursuing the aims of the Freedom Charter, that we are socialists?
  2. Or are you saying it would be better if we did not have sufficient intelligence to exercise our political freedom and instead chose to belong to the Democratic Alliance(DA), where your kind of thinking seems to belong?

He responded to these questions at length in his personal blog. In reply to the first question Vegter says:

Yes, the Freedom Charter is socialist. It would be; it was written in very different times. I’d have thought that more than half a century worth of hard lessons from other countries would have made younger ANC members interested in economic policies that actually work, and would select their leaders accordingly. I’d have thought that they wouldn’t see the Freedom Charter as a founding document (which it isn’t) or carved in stone. Even the venerable old US Constitution, adopted 230 years ago, has been amended 27 times because times changed, and thousands more amendment were proposed but rejected. The Constitution of South Africa incorporates several key Freedom Charter clauses, but it notably omits others. So arguing that the Freedom Charter should stand as immutable dogma within the ANC is not only shortsighted, but places it above the Constitution.

The operation to smuggle anti-Freedom Charter ideas into the ANC consists in getting “younger ANC members interested in economic ideas that actualy work” so that they “would select their leaders accordingly“. Vegter confidently, and without hesitation or a sense of doubt, says that “arguing that the Freedom Charter should stand as immutable within the ANC is not only shortsighted, but places it above the Constitution.” Ths is strong stuff.

I told Mr Vegter that his ideas were against the Freedom Charter and that as ANC members we are fighters for the Freedom Charter. We reject his ideas because they do not serve the ANC’s purpose in life. I do not even want to waste time engaging in economic arguments because Vegter worldview is such that he will never see the point.  Why is Mr Vegter not contributing his excellent ideas to the colonial Democratic Alliance? According to Vegter, the DA is not a colonial but a liberal party that supports limited free markets and capitalism. He says he has no interest in the party because it has failed to pursuade enough blacks to join it but instead chose to join forces with the New National Party after 1994. Clearly Mr Vegter does not know what is meant by a colonial political party.

We have Mr Ivo Vegter who regards the ANC as socialist because of the Freedom Charter, which is socialist and out of date. He devotes a lot of time trying to inspire the ANC to abandon the Freedom Charter and adopt his “economic ideas that actually work“.

What are “economic ideas that actually work”?

Mr Ivo Vegter lives in South Africa. He knows the economy of South Africa is in the hands of the white minority. He knows that the vast majority of the people are the African working class. He knows also that during the past ten years or so the gap between the haves and the have-nots has grown. He knows that this phenomenon of inequality is extreme in South Africa but is a feature of all capitalist economies. He is asking the ANC to abandon that one tool that it knows will work in reducing severe economic inequalities – the Freedom Charter. In short, Mr Ivo Vegter is a clever manipulator of information to hide the fact neo-apartheid South African is not “an economic idea that actually works”. Finally, Mr Vegter makes this startling statement that the Freedom Charter is “above the Constitution”.

Freedom Charter is “above the Constitution”?

Which is primary, the Freedom Charter or The 1996 Constitution? The Constitution that Vegter considers so important was a result of long drawn out negotiations between the racist National Party, the ANC and their respective Allies. It was a product of compromises with these forces who all shared a strong ahtred for the Freedom Charter. The result was that our present Constitution protects private property rights, something that is anathema to our freedom given the history of land and property theft by the colonists over a period of more than 300 years. Therefore, from the point of view of the Freedom Charter, the protection of private property should be secondary and primary rights should be given to protection of communal property – the original form of property that the colonists vioalted when they plundered the country. Perhaps it is this fact that makes Mr Ivo Vegter to panic and declare the Freedom Charter above the constitution. But any Constitution must represent the will of the majority of the people and if does not, it must be brought into line with that will.

Fighting for the Hegemony of the Freedom Charter to Defeat Capitalist Manipulation

Ivo Vegter is a typical example of a capitalist ideologue who likes to present his ideas as neutral. He is keen to make them appear the only ones that ‘work’. The truth is that Vegter’s economic ideas have been tried in SA at least since 1994 if not before. They have not worked for the vast majority. This is not a suprising result but a typical one for capitalism generally but neo-apartheid capitalism in particular. The ANC has over the past 14 years been trying out Vegter’s ideas at the expense of the Freedom Charter. That exercise has brought the ANC close to self-destruction. That is why Ivo Vegter is saddened by the election of Jacob Zuma, bacause he knows that now is the time to restore the Freedom Charter and free ourselves once and for all from the chains imposed on us by his free market ideas that have never worked.

After Polokwane 2007, what the media says?

December 23, 2007

The City Press, South Africa

The City Press wrote in its editorial, under the title “Divided ANC and country face difficult challenges” that:

“Intolerance, however, is not new in the ANC. It was reserved for external opponents such as the Pan Africanist Congress and the Black Consciousness Movement in the past. The ANC in exile’s campaign to be the sole and authentic representative of the people of South Africa demonstrated intolerance, resulting in fights and the horrible killings of patriots for simply being different. The fights at former ambassador Norman Mashabane’s funeral in Limpopo revealed an organisation falling victim to its own medicine.”

The author is referring to the jeering of the (Stellenbosch 2002) NEC of the ANC by delegates at Polokwane. Former ANC Chairman, Cde Mosiua Lekota and the Mbeki Cabinet were objects of ridicule by Zuma supporters at the conference. That the City Press saw in these events an opportunity to invoke a non-existent history of intolerance by the ANC is beyond me. Here was the ANC at conference clearly tolerating offensive and openly rebellious behaviour. Yet the City Press editors ignore this reality but invent another one of intolerance.

City Press editors could at least have cited a single incident when the Pan Africanist Congress of Azania and the Black Consciousness Movement had been models of tolerance and the ANC was not. Instead, like self-righteous journalists and priests of doom, do not care about such facts but expect the reader to entrust them with the truth. The truth, which the City Press journalists are afraid to reveal, is that both the PAC and BCM were founded on intolerance of the Freedom Charter. They were never strong enough to supplant the ANC. But the worst prejudice of them all is to tell readers that the ANC, now exercising tolerance before their eyes in Polokwane, does not really exist!

The truth is indeed very different. It is the ANC that led the negotiations up to the elections in 1994. The ANC under President Nelson Mandela bent over backwards to create a Government of National Unity with Afrikaaner racists and Zulu tribalists in the Inkatha Freedom Party. The ANC under President Thabo Mbeki, went to the extent of incorporating such tiny and insignificant political parties as AZAPO into government, giving the post of Minister of Science and Technology to Mosibudi Mangena. To the City Press journalists, this policy of the ANC is not tolerance – it’s so trivial that it can be safely ignored in favour of invented versions of intolerance. City Press editor Mathatha Tsedu is clearly misleading the public. His distortion of history and the present cannot be in the public interested. It should not go unchallenged.

Sunday Times, South Africa

The lead article of the Sunday Times, by editor Mondli Makhanya, goes by the title “Payback time will set the tone“(22 December 2007). Makhanya declares that:

” Over the coming year, we should anticipate major battles in the Zuma camp over the spoils of victory.”

In his rather long article. Makhanya says nothing more than this declaration. The rest of the article is a mixture of newsy and gossipy bits about what the Mbeki and Zuma camps did in Polokwane, how they displayed mutual hostility, etc. Makhanya gives us no informed analysis of the significance of Polokwane in relation to the Freedom Charter, the policy of the national democratic revolution.

The problem with SA journalists, black or white or brown, is that they spend an inadequate amount of time formulating questions and reporting news in a way that helps the public to learn about the complex and unfolding political situation in South Africa.

The basic problem is that social relations in South Africa reflect neo-apartheid capitalist conditions and, at the same time, the governing ANC espouses the Freedom Charter. This is clearly a contradiction. How come things are still like this after nearly 14 years in government? This is the burning question of our time. All other questions are secondary to this question.

The problem with Mbeki, together with his leadership of the ANC, is that they knew that something was wrong and that somehow the path the country was taking was contrary to the Freedom Charter. They attempted to trumpet Black Economic Empowerment (BEE) as an achievement, along with neo-apartheid capitalist economic growth, when it was not. The thing that frustrated their attempts at spin-doctoring reality was the worsening condition of the African working class while the whites were reaping the fruits of prosperity.  No amount of manipulating perceptions could change this reality. The blacks, who could count only on improved social provision and government employment, simply got poorer and in more indebted. The whites meanwhile are more confident, more that ever before, that their future is bright and enjoy unprecedented business opportunities. This contradiction forced the Mbeki leadership to spend many sleepless nights over many years trying to suppress real articulation of this reality. And they grew desperate, expelling, suspending, and doing whatever would keep them busy.

Add to this yawning capitalist wealth gap the Mbeki government’s love for mega-projects such as Gautrain, Coega, and World 2010. These projects, together with the planned infrastructure investment by Eskom and Transnet, are the pride of the Mbeki government. Contrary to popular belief, these projects and BEE actually help to widen the gap between the rich whites and the poor African working class in our country. These projects, together with BEE, are the surest way of transferring wealth to the white minority. The reason for this lies with the highly concentrated nature of capital in the economy which is aided by the neo-apartheid capitalist paradigm of the present financial system. To date, a total of more than R200 billion has gone into white companies to empower a handful of black ex-political leaders(Tokyo Sexwale, Cyril Ramaphosa, Saki Macozoma, etc.).

These are the real reasons why the people at Polokwane opted against retaining Mbeki as ANC President. They went for Zuma, not because of a desire for spoils of victory, but to find a leader who could champion the cause of the Freedom Charter. That is not to say cliquists, cabalists, parasitic and corrupt elements will not be attempt to take advantage of Cde Jacob Zuma and his leadership team. If they try, they will find the people ready to expose their devious plans.

To conclude then, the message that Mondli Makhanya should have conveyed without ambiguity is that the ANC is going through a revolution and that this revolution will sooner or later sweep through society.

Independent Online

A journalist by the name of Mr Moshoeshoe Monare carried a report going by the title “Sexwale Already Eying 2012 ANC Presidency“. Accordig to the report:

“The dust in Limpopo has hardly settled and a new fierce succession battle is on the horizon as businessman Tokyo Sexwale eyes the ANC presidency in 2012. The billionaire is expected to pump millions of rands into his campaign for a political comeback after a failed presidential campaign.”

Gabriel Mosima “Tokyo” Sexwale is a Soweto-born South African, who went into prison after he was caught and tried by the apartheid regime in 1979. He is an ex-MK soldier and served about 10 years on Robben Island. After 1994, he was made Premier of the newly created Gauteng Province but suddenly resigned sometime during 1997 under a cloud of suspicion with newspapers spreading rumours of his involvement in drug trafficking. All this may not have been true as the man went on to found Mvelapanda Group, a Black Economic Empowerment company closely allied to ABSA and Sanlam group.

Tokyo Sexwale is one of the few showcase BEE oligarchs produced by the Mbeki era of neo-apartheid capitalism. He decided some time this year to enter the contest for ANC President but his campaign flopped. It later transpired that Sexwale had awarded selected influential people shares in the Batho Bonke BEE deal by ABSA bank worth about 5% of the company. Xolela Mangcu, a regular writer for Business Day, was rented by Sexwale at that time and he now is more or less the official spin-doctor for Sexwale’s presidential ambitions.

Tokyo Sexwale, a BEE oligarch of note, was elected into the Polokwane 2007 NEC in December. He is now expected “to pump millions of rands into his campaign”. What are we to make of this? Clearly, Mr Sexwale wants to buy his way to the Union Buildings. He will use his BEE oligarchic funds to do this. What kind of politics is this? Is this the politics of the Russian post-Soviet mafia? Or is it the politics of the ANC advancing the Freedom Charter? How did Sexwale get into the NEC? Did he bribe his way in?

Tokyo Sexwale needs to be told in very clear language that the ANC is for the Freedom Charter. No amount of Tsotsi politics will divert our attention from this. Sexwale allowed himslef to be rented by the neo-apartheid capitalists. They have pumped money into his pockets. And now he is hungry for political power. He wants to rent ANC members to serve the interests of the neo-apartheid capitalist minority.

And how did Sexwale actually make the money that he now wants to pump into bribing ANC members? I think ANC members are entitled to know if any assets of the ANC were used in this. Was the ANC’s name traded in the process of establishing contact with his financiers? Should the ANC expropriate Sexwale, and other BEE oligrachs of his type, of their ill-gotten wealth?

Perhaps the ANC needs to convene a BEE truth commission to establish how it came that political leaders, members of the ANC NEC and comrades deployed in government since the Mafikeng 1997 Conference ended up going into bed as BEE oligarchs with the neo-apartheid capitalists?

New Economist blog comes tops

December 21, 2007

I was fortunate to bump into the New Economist blog when I was researching the nature of inequality in societies. Inequality is a serious problem for all capitalist countries, including here in South Africa. The success of our struggle to overcome colonialism depends on how we understand the nature of this beast we are up against. Hence my present research into inequality.

As it turns out, inequality is a feature of capitalist social relations. Among advanced capitalist countries, it is more extreme in the US and less so in Sweden or in other social democratic states.

” The wealth gap in the US is now at its widest since 1929: in 2005, 21.2 percent of US national income accrued to just 1 percent of earners. In 1968 the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker; in 2005 the CEO of Wal-Mart earned nine hundred times the pay of his average employee. Indeed, the wealth of the Wal-Mart founders’ family that year was estimated at about the same ($90 billion) as that of the bottom 40 percent of the US population: 120 million people.” writes Tony Judt.

On 2 December 2007, the Sunday Times released its own SA Rich List: 200 capitalists and a number of high earning executives. This confirms our faith in the Freedom Charter as the best way to overcome poverty and reduce neo-apartheid inequalities.

South Africa is also an extremely unequal society, with the whites generally enjoying monopoly of wealth disposal. The blacks make up the working class and the poor peasantry that carries the burden of providing cheap labour for these rich and mainly white capitalists. They carry the burden of poverty and exploitation by these whites even after nearly 14 years since the end of apartheid. This is the price we pay for retreating from the Freedom Charter. Let us hope that a victory for the Freedom Charter in Polokwane will turn into a rout for the exploiters in this country.

ANC’s Trevor Manuel Evades Key Issues to Hide GEAR’s Failures

December 14, 2007


I wish Minister of Finance Trevor Manuel had exercised better judgement than is demonstrated by publication of the above piece. He should have sought advice from the Treasury for a better argument than is presented in the article “GEAR definitely not a capitalist plot”.

Where is the Minister’s proof that GEAR is not a capitalist plot? It consists mainly of past statements by the SACP and COSATU showing that they were part of its creation. All that the Minister has done is to show that Nzimande, Dexter and Vavi must shut up or own up. He is being defensive instead of leading.

Let us suppose that the Alliance as a whole, with the ANC at its head, was not duped by the bourgeoisie in 1994, as the Minister argues. Let us further suppose that the Alliance exercised complete freedom to shape policy as it wished, something we know was never the case. Would that be enough to argue that the present neo-apartheid capitalist economy in SA is good and should be retained? No. Minister you can’t do that.

Minister Manuel plays another trick that he obviously believes is a killer argument, but it is not. He says that SA now has a growing capitalist economy that inspires ‘confidence’, i.e. bourgeois confidence.

He rumbles on “Gear was the ANC government’s macroeconomic programme to implement the RDP, which itself was an elaboration of the Freedom Charter. A consistent feature of policy since 1994 has been the understanding that we need higher economic growth to deliver on the ANC’s social mandate, and that the number-one priority of the government is to reduce poverty and improve the lives of all. The government’s approach to policy is that it must be informed by actual conditions and practical considerations rather than by narrow ideological dogma driven by self-interested groups. Gear sought to address a number of specific problems in the economy at the time.”

Minister, how do you understand the Freedom Charter’s declaration that “The People Shall Share in the Country’s Wealth?” What does it mean to you when the Freedom Charter says, “The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people AS A WHOLE?” Does it mean the RDP to you? Does it mean GEAR to you? Is this why the economy is growing at 5% and inspiring rising confidence among the neo-apartheid capitalists who dominate our economy? Is the Freedom Charter a neo-apartheid programme?

Minister Manuel, let me tell you that GEAR has absolutely nothing to do with pursuit of the vision of the Freedom Charter. It has everything to do with the sale of the People’s Charter to the white capitalists in return for the 25% BEE crumbs that a small oligarchic clique is getting from the neo-apartheid companies in our country. It is therefore not surprising that the capitalist have more “confidence in the economy”.

Minister Trevor Manuel then goes on to boast that, “the number-one priority of the government is to reduce poverty and improve the lives of all.” And that “Confidence in the economy is much higher now, as is reflected in higher investment by the public and private sectors. Investment as a share of GDP is higher than at any point since the early 1980s.” The whites control the SA economy and are, relative to the blacks, getting richer. Why? Look at your glorious first world financial system, Mr Manuel.

The financial mechanism in our country is such that so-called poverty alleviation and infrastructure investment feeds into the economy as capital. The capitalists in command are white in a great number of cases. These people seize control of these fresh funds, redirecting them to their own white networks aided by the banks whose lending policies are historical biased (e.g. Lending to black businesses in rural areas and townships is almost non-existent.) Oligarchic BEE, and the credit system that produces “black diamonds”, cannot reclaim this money by breaking the circulation path because by definition operation of the financial system presupposes indebtedness and subservience.

Mr Titus Mboweni has just raised interest rates, thus burdening the workers with increasing debt, like donkeys or camels, sinking them further into debt.

In poverty alleviation campaigns, for example, all the social grants require employment of personnel who, together with the grant beneficiaries, ultimately have to purchase the products produced or traded by businesses overwhelmingly controlled by the neo-apartheid capitalists. Infrastructure investment is, in fact, the most direct way to transfer funds to the neo-apartheid capitalists. Therefore, it is clear that the financial system is the engine of neo-apartheid inequality in SA.

The government is striving to terminate black poverty, but this financial system ensures continuous generation of black poverty simultaneously with the super-profits of its surrogate companies. Capitalists (Alexandra Forbes, the Tiger Brands, Fidentia, etc. ), the ones whose confidence is rising all the time, prey on exactly the poorest by manipulating prices, selling expensive death insurance, seizing upon any pension savings with false promises of high returns, etc. As the capitalists manipulate the prices higher, the SARB awards the lenders with more wealth by imposing higher interest rates – effectively doubling the blow on the poor and further reducing their income. This is how the neo-apartheid capitalists create the GDP growth rate of 5%.

Now, Minister Trevor Manuel, can you see why the confidence of the neo-apartheid bourgeoisie rises all the time that you are implementing GEAR? Can you see why fighters for the Freedom Charter regard GEAR as a neo-apartheid economic programme, clearly conceived to resurrect the apartheid economy that should have been strangled to death by the Freedom Charter in 1994? Can you see then, that your zeal to defend GEAR as something the Alliance agreed to in 1994 amounts to submitting to manipulation by the neo-apartheid capitalists? Can you see? Or not? I hope you can.

Minister Manuel, one last piece of advice. Examine closely the financial paradigm that legitimises the current financial system and its rules of operation. Then, try to conceive one that would be underpinned by the paradigm of the Freedom Charter. Finally, work out a strategy to shift the paradigm from that of the neo-apartheid system to that of the peoples’ system of the Freedom Charter. I’m sure you have funds to do this, or you can take some from the “binding constraints” fantasy of ASGISA. If you succeed, we can restore our comradeship. For now, you and Mr Mboweni are enemy number one to the oppressed people of this country.




November 10, 2007

“My blood will nourish the tree that will bear the fruits of freedom” Solomon Kalushi Mahlangu, 1979, sentenced to death for his oppisition to apartheid in South Africa.

In 1994, the apartheid system of government was brought to an end after prolonged struggle followed by negotiations between the white racist National Party and the African National Congress. Solomon Mahlangu was a soldier of freedom and a member of the ANC. He fought to achieve a new South Africa, a democratic republic of the people, founded on the Freedom Charter. In 2007, South Africans are asking themselves “how far are we from the society envisioned by Mahlangu? What is to be done to achieve a Peoples’ Republic of South Africa, based on the Freedom Charter, for which Mahlangu laid his life?” This site is a contribution in this big debate.