Joel Netshitenzhe
The issue of state capture relates to what the ANC characterises as “sins of incumbency”. How do liberation movements lose their sense of idealism? And how insidious can this become?
Some of the factors derive from the legacy of an inherited colonial state which relied on patronage on a grand scale, illegal sanctions-busting and corrupt extra-judicial security operations. There are also matters to do with how public service is rendered, leaving citizens at the mercy of uncaring officials. Tenuous conditions of an emergent “middle class” seeking to mimic the lifestyles of a trendsetting white community also come into play.
Regrettably, a few individuals in the liberation movement either do not have any – or lose all – sense of compunction and shame, reflecting what are essentially psychopathic tendencies. In some instances, corruptors resort to blackmail, including through down payments that leave the beneficiary hopelessly entangled.
Party funding can also play a role. To win a state tender, unscrupulous business people promise donations to the party first, even before assembling the capacity to meet bid requirements, and party leaders then intervene to undermine state processes.
Many of these weaknesses infect democracies across the world. They are not unique to South Africa. The more brazen among benefactors actually seek to capture whole institutions and turn them into their personal cookie jar. Thus is born institutional capture, an element of which is state capture.
The notion of state capture gained currency largely in discourse around transitions in post-socialist Eastern Europe. However, elements of this phenomenon are prevalent in other countries, including the US.
In a 2001 quarterly magazine of the IMF, Hellman and Kaufman define state capture 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… often through the imposition of anti-competitive barriers”.
State capture differs from corruption because “in case of corruption (even rampant), there is plurality and competition of ‘corruptors’ to influence the outcome of the policy or distribution of resources. In case of (a) captured state, those deciding are usually more in a position of agents to the principals (captors) who function either in monopolistic or oligopolistic (non-competitive) fashion”. (Wikipedia)
Transparency International also refers to “the more subtle close alignment of interests between specific business and political elites through family ties, friendship and the intertwined ownership of economic assets”. State capture is, therefore, much more than corruption.
An interesting allegory is a 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 and operates as the fish’s tongue, and it survives by feeding on the fish’s blood or mucus. The isopod does not kill its host, and similarly, it is not in the fish’s interest for the isopod to leave or to die as the fish no longer has a tongue.
In debating state capture, some have tried to minimise its implications. Let us examine some of the arguments.
l It’s in the very nature of the system, because capitalists are the ruling class. There may be an element of truth in this. But, the classes and strata that brought about liberation are gradually wresting state control to pursue a society envisioned in the country’s constitution.
Among these, of course, is black business, and established businesses that own most of the capital have much sway over economic policy direction. This cannot be conflated with alignment of interests “between business and political elites through family ties” and other links. Further, a form of state capture can also be exercised by other social sectors.
l Complaints are sour grapes as a black-owned company is outstripping the old establishment. Many black companies on the rise have benefited from black economic empowerment policies, including preferential procurement and financial support from development finance institutions. This is a generic policy that applies to all who qualify. There may even be instances of corruption in policy execution. But even then there would be “plurality and competition of corruptors”, as distinct from state capture.
l All businesses seek to influence policy decisions. Of course all interest groups try all the time to influence government decisions. They lobby, cajole and also campaign to influence public opinion. Business will always seek to assert its interests and use leverages it commands to attain its objectives. So do other social actors, including the working class. This is par for the course, and it is different from any of these players assuming the mantle of state decision-makers.
l The state has to work with business. Indeed, it is in the nature of a developmental state that it should continually interact with social partners. 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.
l All leaders have skeletons and should, therefore, curl up and shut up. There may be skeletons in many cupboards and, as the saying goes, for every “corruptee”, there is a “corruptor”. Anyone aware of such skeletons should lead law enforcement agencies to the burial sites, rather than seeking to blackmail the party and society into silence.
l State capture implies that all arms of the state have been captured. Of course, to act in a “monopolistic or oligopolistic” fashion, the captors would need to capture critical pillars of the state. But this does not necessarily mean that they should exercise control over each and every arm.
State capture can exist at a microlevel as in the case of the recent report on trade union(s) and the departments of education. At a macrolevel, it may relate to some or all arms of the state. And it is a matter of simple logic that this would include capture of a state’s nerve centre or a critical organ. The perfect example is where this relates to the very centre of government.
Can state capture be sustained without another form of institutional capture: political party capture? Where the captured straddle the party, the government and the state, direction and sequence of the capture can be either way. State capture is bound to be more effective if the party is on-side, or if the captured have leverage across both entities. It could also be a case of some leaders, once ensconced in state offices and once captured, simply ignoring or defying the party – creating a conundrum difficult to address.
The country has many mechanisms to deal with corruption and state capture. The question is whether the systems and institutions are robust enough, and of course whether some of these institutions are not themselves captured. Therefore, the societal campaign against state capture has to be intensified – proceeding from the understanding, stultified as it may sound, that the people are their own liberators.
Hopefully, fraying party legitimacy will also impel cadres to sue for a turnaround. Beyond principle, the self-interest in a democracy is that unbecoming conduct will lead to electoral decline, and so fewer and fewer cadres will be elected as councillors and members of legislatures.
l Netshitenzhe is executive director of Mistra (www.mistra.org.za). These are edited extracts from a lecture on “Relationship between Party and State”