Sentletse Diakanyo
Sentletse Diakanyo

The financial crisis and rise of pseudo-socialists

In Capitalism, Socialism and Democracy Joseph Schumpeter makes an observation that may prove rather sobering for the pseudo-socialist peddlers of “vulgarised Marxism”. He says The Communist Manifesto is “an account nothing short of glowing of the achievements of capitalism”. Karl Marx noted that the bourgeoisie “accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts and Gothic cathedrals … The bourgeoisie … created more massive and more colossal productive forces than have all preceding generations together.”

The collapse of the global economy signalled the end of capitalism as we know it for the pseudo revolutionaries while the rest of us rolled our eyes to the heavens. The fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991 was the final nail in the coffin of communism and capitalism declared victory. Despite it being self-evident that communism is dead, denialism still reigns supreme among the pseudo-socialists. The revolutionary adventures of the 1960s provide futile inspiration.

Countries such as Cuba, North Korea and China hold on to the remnants of communism while others in Latin America, out of political expediency, have gravitated towards the Left because of their politicians’ desperate attempts to keep their filthy hands in the cookie jar. There is a growing realisation and acceptance among these backward countries that for a nation to progress and prosper, even misplaced nationalism can never make communism a logical and viable proposition.

The global economic meltdown poses serious challenges for Africa. As Africans we ought to realise that the world is tied together by an invisible umbilical cord. Though poverty and growing inequalities entice leaders to lean towards more populist ideologies such as socialism, capitalism continues to provide hope for those who are subjected to a vile and ignoble existence.

The grand posturings of the pseudo-socialists in government impedes its capacity to resist the temptation to be caught up in the vicious cycle of populist rhetoric at a time when the economic circumstances demand a decisive response. There needs to be a concerted effort towards greater political alignment and economic integration if Africa is to emerge from the rubbles of this economic meltdown prosperous.

Amid the growing spectre of trade protectionism as the global recession deepens, trade liberalisation among African economies appears to be vital if economic integration across the continent is to succeed. But there needs to be a determined effort to revive individual economies, establish fiscal and monetary discipline, as well as financial-sector stability. An important question remains — will Africa’s leaders respond to these challenges effectively? These are important preconditions for sustainable economic growth to take shape.

It does not help the cause of Africa if some countries agree to become a dumping ground for reject goods from developed countries; further stifling local producers who cannot compete against the cheaper goods that flood markets. Trade liberalisation in the global context poses significant risks for African countries, given their high inflation, unemployment and often dysfunctional markets. One wonders whether the economic Einsteins at Cosatu appreciate the soundness of the monetary policy implemented by the Mbeki regime and which continues under the Left-appeasing Zuma government, though it is uncertain for how long.

The challenge for African leaders is how to address these risks, particularly job losses, which often is the consequence of free trade. In countries where markets are not working well, job losses in one sector will not necessarily be offset by job creation in another. This could be problematic in countries with an already high rate of unemployment. Zuma promised South Africans 500 000 jobs by year-end. Zuma cannot be forgiven for making such a ridiculous promise when the economy has already shed about 447 000 jobs since the beginning of the year. A clear government programme with realistic targets is needed to resuscitate regional economies.

African leaders also need to address the level of industrialisation if they are to experience healthy trade flows between the member states of various regional economic blocs such as Comesa, SADC, Ecowas etc. The success of Africa in this respect depends on the regions building productive capacity, especially in those countries whose economies have been most devastated by the global meltdown. Black economic empowerment in our beloved country has only served to recycle wealth and not done enough to create new wealth, encourage the emergence of new entrepreneurs and industrialists who establish their own empires without being parasites on white wealth. With the current Zuma government not having an industrial policy action plan, the task becomes even more difficult and the realisation of economic goals bleaker.

Stable and prosperous economic regions, not economic populism, should in the long run be a magnet for foreign direct investment. But mindless civil conflicts, corruption, mismanagement will continue to be obstacles standing before us and the realisation of Nkrumah’s vision for Africa. Moammar Gadaffi of Libya, the chairperson of the African Union, is certainly not the right person to be driving the African agenda and ensuring the continent occupies its rightful and respectable place among the community of nations.

Economic populism threatens the sustainable, long-term prosperity of the continent, in particular here in South Africa. Populists have already begun pitting the poor against the economic elites who are portrayed as the architects of the poor’s misery. History teaches us that we cannot afford to have laissez-faire capitalism reign supreme nor a paternalistic state that is out of touch with the economic realities of our country.

It is important that we allow the market economy to function within the sensible parameters of oversight by the state. Adam Smith alluded to the “invisible hand” necessary to curtail the unbridled capitalist destruction of the economy. The fatal mistake made by politicians in the past was the general assumption that when the economy veers off its original path, competitive forces will intervene and ensure self-correction. The opposite proved true with disastrous consequences. What we cannot allow is paternal interventionism by the state that serves to disrupt economic progress and breeds crony capitalism.

The ANC and its pseudo-socialist alliance partners should learn that economic populism has proved suicidal in Latin America on countless occasions. Though we recognise that the socio-economic demands of the people need to be met, we cannot do so with little regard to the realities of how the economic wellbeing of all our citizens is to be created and sustained. The indubitable truth is that South Africa faces high income inequalities which the ANC has exploited to further its political aims — by playing on the misery of the poor to secure election victory and subjecting them to endless cycles of economic misery. The greatest crime to humanity was not the suffering of our people at hands of the oppressors but their continued suffering at the hands of the pseudo-socialist revolutionaries who liberated them.

Our pseudo-socialist brigade continues to make promises to the poor and “working class” that are far removed from the government’s capacity to deliver on them. The prescriptions of their populist policies are always vague and often with no practical meaning, as demonstrated by Zuma’s utterances during the State of the Nation Address.

It’s time the peddlers of “vulgarised Marxism” become conscious of the long-term consequences that political expediency has on sustainable development and the growth of the country and the continent.

  • http://hardtalk Siphiwo Siphiwo

    People’s Republic of China: the perfect economic system

  • Benzol

    With all due respect after all the…..blah, blah, blah….platitudes we all know……

    What do you propose??

    A revolution = change for the same
    A transformation? from what into what and how to get there?
    Something else?

  • Michael Worsnip

    While this is all undoubtedly true, there is one element which the author needs to deal with, perhaps in a different article which remains an outstanding element in the general arena of contestation for language and symbol. It lies in the actual power which socialist language, concepts and symbols still retain within the South African context. And for very good reason. The words and concepts of the “left” still retain considerable power, because of the patently evident lack of actual content(and indeed delivery of basics) to the poor by any previous government – capitalist (including racial capitalist) and smiling capitalist (pseudo socialist). In the mind of the majority of these people, there has got to be something for them, somewhere. Which is why the unashamed trumpeting rhetoric of the left, proves to be so enduringly popular. And it is not to say that these concepts are bad in themselves – they are obvious – it is rather the cynical use of them, while at the same time maintaining and promoting something so diametrically opposed to them, which is the worrying and disturbing element in our political framework at present.

  • Jon

    Just as what one cannot be a Christian without believing that Jesus Christ is the Messiah, so it is that anyone calling themselves a Marxist- socialist must believe in the ultimate and total collapse of capitalism and the final, conclusive triumph of socialism. It’s a core tenet of faith.

    Of course, Marxist-socialists grab hold of every tiny cyclical downturn in the globalised capitalist economic system as proof of us all living in the end-times of capitalism. And, like a collective of Chicken Littles, they all cackle loudly and gleefully about the imminence of the falling sky.

    Then, a year later, when capitalism has yet again righted what was wrong and turned bust into another boom, they retreat into their muttering enclaves in their irrelevant sociology departments in the faculties of useless navel-gazing and write wordy papers about “the crisis of capitalism”.

    These are same people who were caught fast asleep as their enemy’s forces were gathering en masse to rip down the Berlin Wall and rip up the USSR and tear asunder the outworn credo of Marxist-socialism.

    There are none so deaf as those who WILL not hear.

  • Pastor Ray Mac Oily

    “invisible umbilical cord” — And there we all thought it was the “Invisible Hans” according to Adam Smith. Anyway’s Mr COPE spokesman and Mbeki’s praise singer…. you read any of Charles Dickens’s books? Oliver Twist ect? All lies maybe according to you. Where is our real artist/writers to preserve the misery you and your fellow COPE leaders brought to this ‘Beloved Nation’ the last 15 years in the name of liberation?

  • Kit

    “People’s Republic of China: the perfect economic system”

    What, an underclass of factory workers with no apparent voice to protest on any occasion that their rights may be trampled (remember the Olympic protest parks?), paid more or less enough to survive but not more (for heavens forbid they should have the money or energy to change anything?), and factory bosses and politicians forming an upper class, replete with the splendour of top-of-the-range luxury vehicles?

    Or are we talking here about forced removals a la District Six?

    Perhaps you meant Russia of old with its lavish supermarkets only accessible to the elites?

    Probably your best bet would be Cuba if you wanted a system that kind of worked as a demo model.

    Siphiwo, I honestly think that you need to accept that if you want (pseudo-)communism, you have to think more creatively than pointing at a current or former model with inherent flaws and seek a new path. Or are we all too lazy, waiting for a chosen master-nation to lead us into the real great revolution instead of making our own?

    So we want China? Let’s start making and enforcing rules then. Start with enforcement of severe penalty for violent crime. And for where people can and can’t live, including only being able to access medical care and social grants in their registered district….oops, pass law revisited. But does it work? The proposed NHI, for example. isn’t going to function without

  • pasile

    U spew internally contradictory and inherent nonsense with such confidence.
    History Lesson: Marx acknowledged the historic achievements of capital accumulation- chief among which was the freeing of the productive forces from the straight jacket of feudalism, which in turn laid the foundation for the flourishing of science, culture and art. He however, (read Das Kapital if u have the capacity)like Ricardo and Adam Smith before him understood that capitalism was/is a historically obselete mode of production, and had/has become a hinderence to historic progression. The collapse of the Berlin Wall signified the end of Stalinism NOT socialism- please learn the difference.

    Were Shikota sheep not recently claiming that the ANC’s policies have failed peole in the past 15 years. Are those not the same policies imposed on us by the Mbeki regime. U can’t have ur cake and eat it too.
    Liberalisation has devistated fisherman in Ghana, factory workers in South Africa, small farmers in Cameroon- and u propose more of them?
    Please note the Latin American countries that have been ruined by ‘pseudo socialist policies’. Chile, Uruguay and Brazil are some of the countries that are still recovering from the trauma neoliberal economics that u don’t understand but champion.

  • Bravo Ndlovu

    well said Pasile,all these meaningless isms and ideologies do not help the cause of the majority of the world’s population who are trapped in this vicious cycle of poverty,which has to a large extent increased due to free-markets or capitalism and now that this system has again proven to be flop,the world and all these so called economists must devise as system that will work towards poverty eradication instead of enrichening a few capitalist thugs.

  • unoxio


    Points taken, what do you propose?

  • Noko

    The biggest problem with our economy at the moment is actually this kind of writings. You are not proposing any solution but only apportion blame. I don’t need to be an economist to understand that liberalisation of the market is not good for SA. 15 years ago we had a good shoe manufacturing industry today we import all our shoes. The textile industry will probably collapse in five years time. The issue is before we want to compete with the super powers we must be strong first. Farmers in the US are heavily subsidized, the steel in US is too. There is nothing wrong with us subsidizing our farmers so as to produce food and save the poor. We need to be selsufficient even if the big brothers will not b happy.

    We produce minerals and we don’t process them, the only way to create jobs will be to process our own minerals. Luxury cars cannot move without platinum parts yet there are not part manufacturers in SA but we produce more that anyone else. Please let us wake up and stop using capitalism, Stalinist and all those fancy words that make one look educated even if they are not.

  • brent

    Michael Worsnip, the previous regime was racial socialism not racial capitalism which should alert most thinking people to the dangers of socialism. A study of what Nationalist said and promised in the 1930’s whilst out of power reads like a text book for socialism.

    The closest the world came to comparing socialism vs free market democracy was W Germany vs East Germany. Which one bulit a wall to keep its unhappy masses in and who swallawed who up????


  • brent

    PS – who swallowed who up with zero violance


  • Al

    “The indubitable truth is that South Africa faces high income inequalities which the ANC has exploited to further its political aims — by playing on the misery of the poor to secure election victory and subjecting them to endless cycles of economic misery.”

    Absolutely! And unless the ANC wake up to the fact that they cannot fool the poor forever they will soon be on their sorry asses. And if the ANC are not up to the task, then the voters will find a party that is.

  • Al

    Siphiwo Siphiwo on August 3rd, 2009 at 8:05 pm
    “People’s Republic of China: the perfect economic system”

    Another mindless comment from Siphiwo Siphiwo…or was it a poor attempt at sarcasm. Make your point properly!

  • Mike Ngomezulu

    Onwward to socialist revolution. Thos people who like capitlism are forces of the countr revolution. Lissen to comrade Julis and nationlize today!

  • L. Camp

    Is this what America really wants…?

  • Lyndall Beddy


    Cuba only worked because Russia subsidised their whole economy to use their blacks as mercaneries in Africa.

    And the poor and uneducated always vote communist – what have they got to gain from anything else? It takes a LONG time for them to realise they have been conned – and that the communist elite live like kings at their expense.

  • unoxio

    Agree with your pointers Noko,
    I think we conveniently forget the source of money flows to fund all the needed projects…government collects taxes from individuals and companies, the latter depends heavily on the liberalisation of markets…we also depend on external funding going with credit ratings that, to some extent are linked to GDP growth (arguably the most important indicator) which in turn is linked to liberalisation of markets.

    Common guys, clearly the solution is a hybrid model. One that caters for the creation of ORGANIC wealth (capitalism) and the distribution thereof(socialism).

    This is a proposed solution, lets hear your views and leave ANC out of it – lets apply our minds


  • Sentletse Diakanyo

    PASILE & NOKO, next time read a bit slower so you can comprehend what I wrote.

    With regard to trade liberalisation I wrote: “… trade liberalisation among African economies appears to be vital if economic integration across the continent is to succeed. But there needs to be a determined effort to revive individual economies, establish fiscal and monetary discipline, as well as financial-sector stability.

    I further went on to say, “It does not help the cause of Africa if some countries agree to become a dumping ground for reject goods from developed countries; further stifling local producers who cannot compete against the cheaper goods that flood markets. Trade liberalisation in the global context poses significant risks for African countries, given their high inflation, unemployment and often dysfunctional markets.”

    So, I’m not sure what you two are on about.

  • Jon

    Stalinism had long been done away with by the time the Berlin Wall fell and the USSR imploded. Stalin had very effectively been demonised and revised by the communists from Kruschev and Brezhnev onwards.

    Besides, Stalinism was simply a variant orthodox denomination of the broad church of socialism, just as what Methodism is a variant of Christianity.

    Revanchist Marxist socialists, embarrassed by their shameful history of deadly brutal oppression, are very keen to pretend that many of their once-revered leading figures are heretics who broke faith with Marxism when, in fact, they were dutifully carrying out Marxist revolutionary orders.

    It’s not going to happen, obviously. There’s no escaping the past.

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