The (ir-)rational market versus democracy

The e-tolling debacle concentrates, in microcosmic format, the tension — if not the opposition — between the market and democracy, even if many regard the “free market” as the zenith of democracy.

Or, to put it differently, this tension — which is always there — establishes the economic domain and the political in a specific form today, when the real power lies with the economic domain, specifically the financial sector. Indirectly, this explains Ulrich Beck’s remark, that today the only thing worse than being “overrun” by the multinationals is not being overrun by them.

This tension is also highlighted by Michael Moore at the end of his film, Capitalism — A Love Affair, when he says: “There’s an alternative to capitalism; it’s called democracy”.

So where is this conflict visible in the e-tolling saga? No sooner had Outa won a court battle against Sanral, where Judge Prinsloo ordered the indefinite suspension (or at least postponement) of e-tolling, than the investors service company, Moody’s, which downgraded Sanral’s creditworthiness a few months ago, issued another warning on “negative repercussions”. This also indirectly implicated the South African government’s creditworthiness. The moral of the story? The market was punishing the citizens of the country for exercising their democratic right to protest against excessive taxation.

Some may object to this formulation, insisting that it was strictly an economic issue, and that the market was simply “correcting” itself in the face of the untrustworthiness of a debtor, namely Sanral — which remains liable, having incurred the debt through massive loans. But such an objection would ignore the unavoidable intertwinement of economics and politics — economic decisions and actions always have political consequences, and vice versa.

When the ANC, during negotiations preceding 1994, decided to abandon its policy of nationalisation of South Africa’s industries (under pressure from the IMF and the World Bank) — a policy still affirmed by Nelson Mandela shortly before his release from prison — it was not only an economic decision, but also a political one, in so far as it affirmed the primacy of the market, or of the economic domain as the realm where power resides in the present era.

Hence Moody’s punishing gesture: by utilising the legal system of the country, South African citizens have betrayed the country’s commitment to submit to the vagaries of the market. For that is what it amounts to: for all its vaunted “rationality”, the market is a fickle creature, given to sulking and throwing tantrums, to depression and exuberance. (The metaphors of a “bullish” and a “bearish” market are very revealing here, as is that of the “great depression”.) One could call it market logic, but for all its involvement in complex mathematical projections of profits or losses, based on specific market conditions, an unexpected historical event can (and often does) upset the applecart disastrously.

Walking up the switchback ramps to the check-in counters at OR Tambo airport one is taught a lesson in the sensitivity of the market to unforseen events: in this veritable temple of capital — an international airport — your progress towards the check-in counters is accompanied by a series of encounters with visual information bytes like: “Terrorist attack on the WTC in New York — Markets down”; “Bernie Madoff arrested for investment fraud in New York — Markets down”; “Barack Obama celebrates 100 days in office — Markets up”. Clearly a very volatile thing, the market, as also demonstrated in its nervous response to the verdict in the e-tolling case.

In the light of this fickle logic, some may (and have, commenting on my earlier TL post on Economic injustice against the people), argued) that this legal verdict is disastrous for South Africa. And indeed, if one accepts the primacy of the market, it is. But one does not have to, as Judge Prinsloo showed clearly by deciding in favour of the economic well-being of the people, which he made explicit.

The market may still have the last word, pending the outcome of a full-scale juridical investigation into the e-tolling saga in all its ramifications — and the reluctance shown by Sanral to reveal documentary details of the e-tolling project certainly emits a dead rat’s odour — but for now, the political has asserted its rights over economic exploitation.

I realise that, in adopting this position, I am aligning myself with a notion of the polis that is completely out of sync with currently entrenched beliefs. As philosopher Johann Rossouw has argued, today it means the society of people who espouse the virtues of homo (and gyna) economicus, such as conspicuous consumption, diversified, flexible investment, veneration of market forces, and so on, in contrast to an earlier conception of the polis as a community of people who valorise the political values of patriotism, political autonomy and selfless service to the community (exemplified in the figure of Nelson Mandela).

There is no reason why this older notion of the polis cannot be recuperated. All it would take is for the people of a society (the subjects of democracy), to take back the power of decision-making from “the world of finance”, as the new president-elect of France, Francois Hollande, recently put it (if not directly, then through representatives whose trustworthiness has been shown to be not for sale).