Publications
Partners
Cape Town - No man is an island, entire of itself. So wrote the English poet John Donne.
Today, this is something that can be applied equally to a village, town, country or continent. Just as it can be to a trade union, business or employer organisation.
But while employer organisations, in their multinational and transnational corporate forms, have clearly understood what Donne meant, and therefore ignore borders, the labour movement, for the most part, is still stuck with a parochial mind-set, despite being theoretically committed to internationalism.
There were good examples of this contradiction this week when we had the annual break from our local concerns to indulge, for Africa Day, in outpourings of Pan-African solidarity.
Labour federation Cosatu was quick off the mark to associate, verbally at least, the island of South Africa with the continent of Africa as a whole.
But the call was for “all African states to re-prioritise development in Africa in the interest of the masses”, with the object of “African industrialisation”.
The problem here is that, as with many nationally based businesses, the unions ignore the fact that the ongoing economic crisis is a global phenomenon. It is one that US economist Richard Wolff warned six years ago would not be “temporary, fleeting or short”.
But Wolff’s voice, along with several others, was drowned out by the mainstream cacophony that included most mainstream economists and finance ministers, such as our own Trevor Manuel. Rather than seeing 2008 as the start of a slump that had been threatening for years, they saw the obvious start of the crisis as a mere “blip” on capitalism’s road to ever-growing riches and a better life for all.
But by 2011, despite muted murmurs of optimism, there was growing consensus across the board that the world economy faced perhaps the biggest crisis in history.
So it is a global problem. It affects not only Africa or South Africa in isolation. And it affects different regions and countries in different ways. A severe downturn began in Japan in 1989, a symptom of the wider crisis to come, and that country has still not recovered.
But even when the primary problem is pinpointed – as it was in investment banker Daniel Alpert’s book, The Age of Oversupply – the remedy proposed is merely the timeworn trade union demand of more regulations. At the opposite pole, there are calls to further liberalise the market.
But both liberalisation and regulation have failed; that they continue to be promoted indicates ignorance of economic history. Especially since both sides partially blame the problem on corruption.
Corruption, in fact, led the British government in 1720 to ban shareholder companies – one of the pillars of our present system – for 105 years. The ban was also supported by Adam Smith, the father of modern free market capitalism.
Given the time he was writing in, Smith could be forgiven for not foreseeing the advent of massive automation, the microchip, robotics and consequent oversupply.
But he knew how shareholder companies could fiddle his free market system. And it got worse after 1856, when corporations, freed to function again in 1825, developed limited liability.
For me, this was summed up in the verse: “Though a Rothschild you may be, in your own capacity. As a company you’ve come to utter sorrow. But the liquidators say, ‘Never mind, you needn’t pay.’ So you start another company tomorrow!”
It is a history to which trade unions, economists and businesses would do well to pay heed.
A bright note over the past week was the interest shown in the housing policy and energy papers I offered in this column. I was quite inundated – an indication that there is widespread interest in these important issues.
With the economic crisis apparently deepening, alternatives must be considered and I look forward to your responses, not only to the housing and energy issues, but also to the general economic malaise.
