The following article refers to a recent attempt to establish Billionaire Capitalism in South Africa, for the benefit of the Gupta family and Jacob Zuma himself.
This is a beautifully concentrated example of the methods and goals of Billionaire Capitalism. There are several points worth emphasis:
If democracy exists, it must be corrupted and discredited. The Guptas prospered because of government corruption and a lack of accountability, and they fell because the South African people demanded accountability—in other words, because there is a democratic culture in South Africa.
The role that divisive racial propaganda played. This effort “set race relations in South Africa back by 10 years,” which is saying something. South Africa was destabilized to the point where there was talk of civil war entirely from a propaganda campaign originating outside the country (in the U.K. and India) without any unusual political conflict over issues.
That one set of billionaires (closely linked to massive government corruption) scapegoated another set of billionaires (who were not connected to the government) for black poverty. While black poverty in South Africa is a complex issue, there’s a clear consensus that not enough progress has been made, and that government corruption is a significant part of the problem.
What is the difference between these two sets of billionaires? The first set—the Guptas—were intimately linked with Jacob Zuma and the ANC. Much or all of their wealth came from government contracts. The second set were mostly white billionaires who were not close supporters of the government. But there is a deeper difference. The Guptas practiced Billionaire Capitalism in the sense I’ve used it in this blog (see “Kasparov Gives Us a Hint”), of using political power to concentrate wealth aggressively in the hands of the few. The billionaires targeted by the Guptas were not trying to use government power to establish a Billionaire State—they had little influence on Zuma, and whatever their plans for making still more money they didn’t involve a government takeover. So not all billionaires participate in what I’ve termed Billionaire Capitalism—some just try to make money.
The Guptas’ campaign was so outrageous that we may forget to ask the most obvious question: what did they hope to achieve? Possibly they were just trying to change the subject from their own and Zuma’s corruption, which was receiving a lot of attention in the South African press.
But the most likely answer is that they wanted massive expropriation of white property in South Africa, much of which would end up owned or controlled by the Guptas themselves. Of course, this would probably result in civil war and/or the expulsion of the white population. No doubt many lives would be lost, with severe long-term effects on the South African economy and its social fabric. For one thing, driving out or killing 4.5 million or so whites would alienate South Africa from the West, resulting in a degree of isolation and condemnation similar to what the country experienced under apartheid.
Modern South Africa is founded on an agreement between Mandela and de Klerk: majority rule but no arbitrary seizure of property. Naturally the particulars of this agreement were difficult to accept for both sides, but it kept the peace and allowed the South African economy to grow, even if the wealth created was distributed unequally. Although little was done to help the rural poor, an urban black middle class was created, and it did prosper.
At the time, it gave both sides a path forward. And the current situation, however frustrating it is to the poor, is not without potential, not without hope.
The Guptas, to further their own goals, were willing to destroy the relative racial peace created by Mandela and de Klerk.
This is, ultimately, what Billionaire Capitalism means. It is willing and eager to destroy or corrupt any institution or tradition that stands in the way of concentrating wealth in the hands of the few. It often exploits and exaggerates racial or regional or class differences, to the point of fomenting actual violence.
The saving grace here is that the Guptas’ plan failed because South Africans saw through it.
The Socialist Investor 