THE IRONY OF CAPITALIST LOGIC
Neo-colonial governments in Africa are always trying to satisfy the needs and wants of the so called investors. There are two important constituencies in the minds of these puppets governments, namely tourists and investors. All institutional development viability is justified on the basis of these two pillars of economic mirage.
The recent jitters in international equity markets are evidence of crazy logic of international capitalist system. Why should Stock Market Index have a free fall in Africa or Brazil when America Companies have failed to manage the granting of loans? Why is it that when American corporation’s management steals from investors locally, the Stock Market in so called developing markets plunges? Why is it that when evidence of corrupt practices which caused the collapse of Asian Tigers a decade ago do not have the same effect on American accounting scandal? There are many examples of such inconsistencies and double standards.
Investors desire to reach bigger and more lucrative markets but fascinatingly they do not want the majority to hold wealth. They also do not want to pay labour for what is worth. Investors are limiting their own market potential by squeezing wealth that falls in the hands of the working class, which is the productive majority, in collaboration with neo-colonial government in so-called developing nations.
It is not surprising that in countries like ours, monetary policies are not managed by government but by private companies such as the Reserve Bank. In West Africa, France has a veto power in monetary policies in a number of countries. South African Reserve Bank (SARB) was listed on Johannesburg Stock Exchange until few years ago but its shares are mainly held by private interests of financial institutions. The monetary policy of South Africa displays the greatest madness of capitalism. The policy thrust in South Africa is to maintain inflation within the range of 3% to 6%.
Every year when organized labour negotiates salaries above 6% then the SARB increases interest rate thus further making doing business expensive as all business maintains some loan therefore pushing inflation up. Whenever the price of oil on the international markets increases thus contributing to operational cost pressures the interest rates are also increased. Surely the tool used to control inflation is the very source of inflation that brings along side effects like un-affordability of home loans thus insolvency, stress among workers leading to low productivity and a host of other hardships.
Experience has shown that Capitalism is a very short-sighted system that is hindering progress in human civilization and Socialism which empowers majority in society remains the hope for development of humanity. African workers have the responsibility to take power and change this madness and illogical distribution of wealth created by capitalism.
By Sbusiso Xaba
It still defeats any logic how one would resolve to use interest rates to curb inflation. The process is simple, when the reserve bank raises interst rates to the banks, they just transfer it to its customers who are curently holding loans.
This includes individuals and businesses.As with business they will transfer it to consumers in the form of higher prices.As with individuals it goes to your bond, car installment & any personal loans.
Unfortunately individuals are also consumers, eventually it all biols down to the average harding working men/women on the street.Now, how does that curb inflation?
a senior employee of a bank in the united states – i think he was the manager of city bank or citicorps – once boasted that there were about 200,000 speculators globally (he was/is one of them) who manipulated financial markets. they use hedge funds on behalf of investors to achieve what they want. he said if they didn’t like a country’s policies they took one look at its policies and take out all the money to cripple that country’s economy. he said they did that to french president francois mitterand in 1981 when he introduced socialist policies. the exact information is contained in my article which was published in the New Nation of 16 august 1996. another useful information on the pitfalls of foreign direct investment is in a seatini booklet authored by yash tendon.
Splendid take and use of contemporary/recent events. Continue to inform and educate. We continue to spread these important writings and to share with others. Thank you.
A lot of friends are worried about the advent of Chinese people on our continent. While as I am keen to believe that this is not capitalism but socialism – out there to work rather than to exploit,; it would be interesting to hear what Mayiholme’s take on this issue is.
Capitalism is just about frailing for breath now, but which way forward is the question that continues to haunt most conscious brothers and sisters…
@Mbarika there was once an editorial on Mayihlome dealing with the issue of China. Please Find the link below:
http://mayihlome.wordpress.com/current-affairs/embrace-the-dragon/
Also refer to:
http://mayihlome.wordpress.com/2009/11/10/building-the-new-type-of-china-africa-strategic-partnership/
However i am also of the view that the issue of China demands a more detailed study in this publication.
Izwe Lethu!
Good article which draws on current events. Have shared as usually. What is Mayiholme’s take on the advent of Chinese in Africa. Social or capitalising workers? Capitalism is frailing for its last breath – but which way forward.