‘Oh what a tangled web we weave If ‘Global Marketing we believe’ Parody on quotation from Sir Walter Scott
The ‘casino culture’ is, by my definition, one in which a gullibility exists that allows a favoured few to get immensely rich at the expense of the masses. This culture extends within a nation and globally. The arguments promoting this culture are clever, complex and devious. They are typified by the promotion of casinos and lotteries where a population is led to believe that these are good for the nation, particularly the deserving charities (like the Blue Bulls Rugby Union!). This is as illogical as it is immoral. All the statistics show that, apart from an almost negligible number of ‘winners’, it is only the franchisors, the fat cat executives and shareholders of the privileged companies awarded a licence who will benefit.
The poorest of the poor are the last ones who should contribute to charity while the ultra rich go scot-free. This is severe criticism from a one-sided opinion. A diametrically opposite opinion may be correct. It is the theme of this Comment that it is a tangled web and too complex an analysis to come to a correct perception in the interests of the bulk of the nation. The New South Africa has enthusiastically become a leading member of the ‘casino club’, and by following this culture has become an equally enthusiastic supporter of the Free Market Global Conglomerate Club.
Some examples: It was a much hoped for Christmas present that was announced at the end of November: the final signing of the contract between Alcan and Escom for the supply of electricity to a large aluminium plant at Coega. South Africa is now to become the largest and cheapest aluminium producer in the world. This status comes about by virtue of our cheap coal resources leading to the lowest electric power cost in the world. The bargaining was reportedly fierce, and Alcan emerges as an even more powerful global conglomerate. Escom is hard pressed to meet its future commitments to South Africa, not the least being to the rural areas, and warns us that the days of low cost coal are numbered if not already gone forever.
The details of the Alcan-Escom contract have not been released but it is gullible to believe that this cheapest power in the world will continue to apply to the local consumers as first priority. Of course there are other benefits. It is hailed as the saviour of the Coega industrial complex and will create 1 000 permanent jobs (at R2 million per job). But it is a tangled web of economical calculations to demonstrate that it is as much in the interest of the jobless as the affluent shareholders of the companies concerned. Does it matter that there will be an inevitable increase in electricity costs to the average consumer? The casino culture has been with us for many decades. Sasol, for example, was for many a decade, operating at a mammoth loss, but by one of the most unusual share market listing deals the government guaranteed, by way of a complete state control over fuel sales prices, that Sasol would always make a profit for shareholders.
As a result the motorist paid more for motor fuels to the tune of billions towards Sasol shareholders. This is not necessary now but there is a deathly silence about repaying some of this mammoth past bonanza. It is significant that the government through the IDC is a major shareholder in Sasol and is also the price regulator to its own benefit. It is the high transport costs incurred by the poorer section that hurt the most. But is this not offset by savings in foreign exchange? Another tangled and distorted web in ‘free market’ economics. Another example from the new democracy is in the motor car industry. This, as we all know, is booming with all-time records in motor vehicle sales and with every global manufacturer falling over to get in on the act.
This has been the result of the extremely clever local manufacture subsidy devised by the DTI. But from the consumer’s point of view, we are paying a lot more for our vehicles than most other countries (reportedly by as much as 25%). So what if the affluent rich have to pay more for their cars if we are creating jobs in the motor industry? Certainly we have created new jobs, but how many and at what cost per job taking say 25% of all motor car sales? I wonder if anyone can work their way through this tangled accounting web. We have the disastrous situation with the clothing industry, with some hope for the future in the recently negotiated restricted imports from China. This assumes that another huge clothing producer does not step into the gap with textile sales in true free market tradition.
In the next round of the WTO negotiations we are hopeful that Africa’s continual bleating over agricultural subsidies in the Western First World will at least be reduced. Surely this is as ridiculous as all the other anomalies when there are so many starving people in Africa and every drop of water and hectare of un-grabbed land is needed to help Africa’s hungry underprivileged before we consider exports to anywhere. In any event, if there are any unutilized capabilities, these could be put to good use in creating many millions of farming jobs by, for example, producing biofuels, thus avoiding the huge cost of the oil barrel. But once again this is an isolated opinion and needs to be checked by calculation.
We have these and many more stupidities. We are a nation of the order of 50 million people of whom a high proportion live in shanty towns and rural districts in dire poverty. We aspire to develop a quality of life for all the people approaching that of the First World. Our economy is booming and our GDP is the highest in our history. But the latest stats show that unemployment has increased. We want to join the global free market, but the realization has dawned that we cannot make clothes, cars or cell phones at prices competitive to the Chinese, Korean, Japanese, Indian or Malaysian populations, nor any of the other products that spell membership of the Free Market global culture. If we want these luxuries, we have to balance our trade, and it would seem that all we can do is to export our heritage of raw material resources. So where do we go from here? Is your commentator a capitalist or communist? Look to the next Journal Comment for some
suggestions. R.E. Robinson Jan 2007
- Written by R.E. Robinson
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