Cosatu's a sucker for punishment

Cosatu is suffering from battered spouse syndrome -- the more it is maltreated by its partner, the ANC, the more it believes it is best to stay within the union. Sadly, like many victims who suffer from that kind of false consciousness, the imprudent decision to stick it out is supported by coherent but ultimately misguided reasoning.

The essence of the justification to stick it out is that it is in the best interest of Cosatu's children -- the poor workers -- to fight for reform from within the union. Yet, 16 years after democracy's advent, the policy landscape remains stuck in the logic of neoliberal economic thought.

That might not be a bad thing, of course. After all, communism is long dead and would be even less sympathetic to the interests of the proletariat than a form of capitalism that is softened by whiffs of welfare and strategic state regulation.

But what is undeniable is that Cosatu's own vision of how the economy should be structured -- setting aside the question of whether that vision is sensible -- finds little expression in current ANC and government economic policy. Therefore it is mind boggling that Cosatu should speak of a "contestation of ideas" when clearly it has not won any fundamental debate battles since apartheid's demise.

All of this struck me as I mulled over Cosatu's recently released document outlining its distinctive and alternative path to economic growth. They argue in favour of a job-centred, redistributive growth path. It has, of course, become fashionable to predict the imminent collapse of the ruling alliance. That prediction remains a mere commentarial trope. Cosatu simply lacks the political courage to try its electoral luck. It will not serve divorce papers in our lifetime. But an important, different question is seldom posed: Should Cosatu go it alone?

The answer is yes. The document it released last week is a critique of ANC economic policy more devastating than any even the Democratic Alliance could whip up in a "fight-back" campaign. It correctly points to the immoral reality of a society that continues to experience gigantic unemployment levels, not to mention a society that is the most unequal in the Milky Way.

Add to that gratuitously high levels of poverty and you have a spectacular failure to deliver on the ANC's much-promised "better life for all".

These uncomfortable truths, however, are well known and acknowledged even by the ANC -- sometimes. So a rehearsal of these facts in the Cosatu document is not in itself newsworthy.

Rather, it is the diagnosis Cosatu provides for why this state of affairs exists that is important.Going back to the 1990s, the document posits the beginning of the end as the moment when the Reconstruction and Development Plan (RDP) was replaced by the Growth, Employment and Redistribution (Gear) blueprint. It describes this shift as founded on a lie -- the promise that if one focuses on economic growth first and foremost then somehow employment levels will magically increase and along the way inequities will vanish.

This thinking, so the diagnosis ends, is proof that the neoliberalism of the "1996 class project" is not pro-poor. It simply facilitated the creation of a narrow class of black elites instead.

And, make no mistake, Thabo Mbeki and his followers are not the sole targets of criticism. The document points out that this misguided economic project continues even after Polokwane. This is an unsubtle message to the Zuma government that it has betrayed the leftist consensus that underpinned the ousting of Mbeki at Polokwane in 2007.

Without even assessing Cosatu's recommendations on how to (re)structure the economy, one wonders how such a brutal attack on both ANC policies and their ineffective implementation could be squared with a decision to stick it out in the alliance forever and ever.

The only winner here is the ANC. It can continue to claim to be a broad church, belying the fact that it preaches a gospel that resonates only with the material interests of those sitting in the front row -- tenderpreneurs, capitalists and rent-seekers. The rest of the churchgoers remain poor but are calmed by the opiate of ANC religiosity.

If Cosatu's unhappiness was restricted to how the state is doing practically, one might make a case for sticking it out on the grounds that there are no fundamental philosophical tensions. But this document renders that defence unsustainable. Why? Because the package of alternative economic moves that Cosatu advocates is inimical to the centrist thinking of ANC policy gurus.

For example, Cosatu wants to introduce a new tax that redistributes even more money from wealthy South Africans to state coffers -- this despite the fact that the top 8% of income earners already account for 51% of personal income tax. The ANC has little appetite for further disincentivising investment and entrepreneurship.

Furthermore, Cosatu hopes that the relaxation of exchange controls might be reversed. Finance Minister Pravin Gordhan would no doubt fight such a move because it would drive up the cost of doing business in South Africa. That would damage job creation.

Cosatu wants interest rates kept low, but the Reserve Bank would not do so without keeping an eye on inflation. After all, low interest rates coupled with a high rate of increase in the cost of living would be bad not just for the rich but even more so for the poor.

Cosatu also wants the state to stop caring about "fiscal austerity", which is its way of encouraging the government to go further into debt. The idea is to throw money at the axis of evil -- poverty, inequality and unemployment. Again, government spending on social services is already very high and one cannot imagine the ANC risking the medium- and long-term consequences of a giant fiscal deficit, which the next generation of voters would be angry about having to service.

Cosatu's key recommendations are both ill considered and, more to the point, diametrically opposed to the economic consensus that is emerging in the ANC about important elements of the macro-economy (barring the issue of nationalisation). The ultimate failure in Cosatu's analysis is that it assumes a lack of resources to be the greatest problem the state faces. That is not true. It is the lack of state capacity, the failure to implement policy effectively and a lack of political will to give the fatal blow to cronyism, corruption, underperformance and tenderpreneurship that explain why the majority still does not experience economic uhuru.

This is not to deny that inequality is unjust, or that the state needs to be caring in responding to structural obstacles that prevent the very poor from being entrepreneurs and self-sufficient, autonomous citizens. But the truth is that existing policies speak to these realities. They are simply not effectively implemented.Nevertheless, if Cosatu truly believes its economic ideas should replace existing ones then it should form a political outfit that argues that case outside the alliance. Only then will a more honest "contestation of ideas" happen. But don't hold your breath -- few battered spouses achieve self-actualisation.


http://www.mg.co.za/article/2010-09-27-cosatus-a-sucker-for-punishment