Rereading Atlas Shrugged as South Africa becomes a dictatorship

atlas-shruggedKarl Marx was a brilliant diagnostician. His analysis of the way in which unregulated capitalism can drive inequality was incisive, especially considering the lack of data available to him to prove his point. His solution, on the other hand, was appallingly destructive.

That seems to happen fairly often. People notice a social or economic problem, assess and diagnose its cause with astonishing aplomb, and then suggest a solution of startling naiveté based on cartoonish assumptions about the way people behave.

Sometimes the cartoon solution reflects the cartoon in real life.

There are different buttons for different people that cause you to sit bolt upright and start frothing at the mouth. For me it is policy that forces mass poverty through illness, joblessness or illiteracy.

There is an appropriate time to read Atlas Shrugged

In 2006, the electricity infrastructure in South Africa started to fail.

I was running a fresh-food concept store in Cape Town. Every day for three weeks we suffered eight-hour outages. Every evening then Minister of Public Enterprises, Alec Erwin, came on television and personally assured everyone that the power would be on the next day.

I was throwing away almost my entire stock each day. Each afternoon I would face a choice: buy new stock so I’d have something to sell the next day, or save my cash in the assumption that the minister was lying.

He did lie, daily. And I lost everything.

Alec Erwin’s response to the billions of rand lost to business owners, like myself, was to tell us to fuck off. In those words. The government denied it had any culpability.

Except … except that the entire electricity infrastructure is state owned. 100%. Its senior management and board are all appointed and run directly out of the Ministry. The government decided both not to build additional generating capacity even as they wired up millions of homes, and to deliberately neglect maintenance to save costs. And, ever since the ANC came to power, they have had a declared policy of what they call “cadre deployment” in which loyal and senior ANC members are placed directly in senior positions in state-owned businesses irrespective of their qualifications for the role.

The net result was a few good years in which profits soared, followed by collapse as infrastructure failed.

It isn’t as if South Africa is without problems.

HIV was neglected as President Thabo Mbeki joined the popular “denier” movement and declared the disease affecting millions of South Africans a fictitious conspiracy led by big pharma. Contradictory labour legislation drove up costs and maintains a stable 40% unemployment. Various political working groups would announce that the economy needed to be protected from foreigners (stopping them from owning land) and minorities (land and jobs and businesses). All of this in the name of “fairness” and “level playing fields”.

As one pundit remarked, “Soon our playing fields will be so level you can roll a bowling ball from Johannesburg to Cape Town.”

By 2007 I had been increasingly alarmed and frustrated for five years. I walked away from my non-profit organisation after repeated racist remarks by senior figures in the political elite. After my food business failed I ended up taking my first-ever job just to get back on my feet.

In December 2007 the ANC, the party in overwhelming power, met for their 52nd national conference. It was in Polokwane, Limpopo province.

The ANC is an alliance of competing and conflicting organisations. They jostle for power endlessly and none of them have any understanding of how wealth is made. For them, wealth exists as a solid and fixed thing. Those in power can extract more of the rent, but there is no way for anyone to create more.

In a world like that, the only way to get rich is to get to the top of the party.

Despite this, the ANC has been led by educated and erudite intellectuals. People of profound moral standing, like Oliver Tambo, Albert Luthuli, and Nelson Mandela. They have a weight of scholarship and gravitas available throughout their leadership structure.

They decided to elect a man with a vast criminal investigation hanging over him; from corrupt arms deals, to rape allegations. A man who relishes his ignorance, who barely made it into high-school, and whose defence – when confronted with corruption – is that he is too stupid even to balance his own cheque-book.

This man – Jacob Zuma – they elected to run the country.

It was the week of 16 December 2007. The week I also happened to be reading Atlas Shrugged for the first time.

The cartoonish reality reflects a cartoonish analysis

My heart pounded as I read Atlas Shrugged.

Of course her solution is mad. Of course it does not work. But her observations. I was reading those exact justifications from politicians every single day. It felt like I had always been reading them.

As a throw-away digression. Atlas Shrugged cannot work for a number of reasons.

No company of sufficient size to have a major economic role is likely to be owned and managed by a single person. If the CEOs of Apple, WalMart or the like walked out there are boards, deputies and legal frameworks to ensure continuity. It’s no different than when nutcases assume that killing the president will cause the collapse of the US as a nation. Of course not.

The gold standard is another fallacy. It’s wonderful for owners of capital, since it preserves their control of the economy but it is fabulously undemocratic. If money is merely a store of value it requires that its supply be restricted. That favours the already wealthy. If money is a means of exchange, then its supply must be flexible. That favours a more liquid economy. Redenominating gold causes severe episodic short-term pain for the working class. No democracy can sustain this and so the gold standard was abandoned as the world became more democratic.

Rand’s idea that a small number of rich and powerful industrialists can, through simply walking out of their offices, stop the motor of the world is laughable. Her obsession that a fixed supply of gold can be a means of exchange in a complex and democratic global economy is pure fantasy.

Fight, fright or flight

I was grappling with three choices for my future in South Africa: keep fighting for the promised “better life for all”, accept the status quo, or leave.

If was obvious to me that, even if I spent a lifetime fighting, I wasn’t going to convince anyone. The majority had decided and, even if I believed that decision was wrong, I couldn’t stand against it. Accepting it was impossible.

One conversation that kept coming back to me: I was at a dinner and sitting next to the head of the Western Cape Black Management Forum (yes, there is such a thing because it promotes “fairness” – a “White” management forum would, of course, be a completely unacceptable racist organisation).

He was telling me, “Of course we know you and your ideas. But we will not listen. You are white. And you are not rich.”

I responded, “You understand the poverty in the townships is not my problem? I did not create it. I do not benefit from it. I gain nothing from fixing it. I do so because it is a tragedy and I know how to end the suffering. I want to do this. I can change my mind and stop trying.”

He didn’t care.

South Africa’s future under Jacob Zuma was clear to me. Things would get much, much worse.

I moved to the UK in April 2008.

In 2008, genocidal attacks against African foreigners erupted. 62 people were butchered, including Ernesto Nhamuave, a 35-year-old Mozambiquan who was set on fire and burned alive in front of journalists and police. Thousands of people lost their homes and livelihoods as their businesses and belongings were looted.

No-one was arrested or charged.

The electricity infrastructure began its slow-motion collapse. Acid minewater started bubbling out of century-old works and into drinking water around Johannesburg. The ANC began wholesale looting of the state. And Jacob Zuma began work on his $20 million personal estate all financed through taxes.

The corruption is painfully obvious. I walked into Johannesburg International Airport past a 10-metre-long sign that advertised the Department of Correctional Services. That’s right, the ministry that owns and controls the state’s prisons. They’re advertising.

Why? Because an advertising contract doesn’t need a measurable return or outcome. Millions can be spent on the contract to some ANC stalwart. The person doesn’t give a bribe. Nothing that uncouth. What they do is, out of their annual profits (derived entirely from pointless contracts of this nature), give the ruling party a donation.

An entire newspaper was set up, The New Age, to receive and print adverts from the state. The Gupta family, which owns the paper, funds lavish parties for the elite and donates vast sums to the ANC. In exchange, they get wonderfully idiotic state contracts.

Over the past few months, as South Africa becomes a defacto kleptocracy and infrastructure fails, the tiny opposition parties have been – on two occasions – dragged out of parliament by police while parliament has been in session for demanding to know when the president will “pay back the money”. During the opening of parliament, the ANC blocked telephone signals to prevent journalists covering police attacks on the opposition.

Parliamentary protected speech is no longer any such thing.

I am now only a spectator to the happenings in South Africa but, after seven years abroad, I decided over December to reread Atlas Shrugged.

The complexity of the UK and the benefit of context

The UK has its own problems. The great turbulence of the world economy since (maybe) 2008 has seen growing wealth and productivity in Asia outcompete inefficiency amongst mature industry workers in the US and Europe. Instability in global finance has created a liquidity crisis as struggling countries battle to access new cash even as they drown under existing debt.

Politically, there has been flight to the fringes.

The old hark back to a wondrous time of plenty when there were no foreigners and people couldn’t simply flit about, and the poor knew their place. They vote for the increasingly militant fascist parties like Marie le Pen’s National Front in France, or Nigel Farage’s drunk neo-fascist UKIP in the UK.

The young and working-class have fallen once more into the arms of Communism and the idea that all will be well if we just abolish materialism and capitalism.

Russia is fighting a proxy war in Ukraine, ISIS is exploding in the Middle East, and European leaders are having meetings increasingly detached from reality.

You’d think this would be a good time to reread Atlas Shrugged?

I abandoned it after only a few chapters.

South Africa is a nation of 60 million people, but only a handful of large companies and a mere few thousand people pay all the tax that supports the entire economy. The political discourse, and regulatory environment, is dominated by the anti-democratic will of a single party which does not answer to parliament. The justifications for state failure, and the prescriptions for fixing it, are nonsense.

South Africa is a good place to read Atlas Shrugged because the gross and cartoonish simplifications in the book are reflected almost exactly back to you.

The UK and Europe aren’t like that. It’s a vast and raucous market of ideas and competing interests.

Certainly, both super-powerful Capitalist and disenfranchised socialist mass-movements like to claim that a secret cabal control the economy, but they’re both wrong. If enough people make stupid decisions then free-markets do end up looking like this.

It’s like becoming obese, having four heart-attacks and then thinking that, because you stopped eating burgers, the path back to good health will be easy. It won’t.

And Ayn Rand’s increasingly detached pontificating oversimplifies the nature of inequality, belittles the real concerns of those left behind by consolidating wealth, and offers no meaningful solution.

“Starting again” isn’t a solution. Pol Pot tried it. Boko Haram and ISIS are trying it.

Life isn’t a video game. When you completely fuck up you don’t get to shoot yourself in the head and go back to the beginning to try again. You have to keep going from where you are with all the legacy and misery on your shoulders.

More importantly, because governments and nations can invest for the long term it really is possible for economic growth and increasing wealth to overcome the problems caused by economic growth and increasing wealth.

Leaving Rand behind

There are a few places in the world that are still run by cabals of the elite whose detached decisions create cartoon-like misery for their people. Venezuela, Russia, Ethiopia, Zimbabwe, North Korea and – increasingly – South Africa.

China is certainly not a democracy, but the dictatorship is distributed and complex. The cartoon is blurry and pixelated.

Cartoonlike countries run exclusively by rent-seeking elites are in the eye of the beholder. Many Americans claim the US looks like that, but they really do need to try living in a country that actually is like that to make a meaningful comparison.

I imagine, if I were still living in South Africa, Rand would still be meaningful for me. Just as I would rejoice in Marx if I were recently graduated from high-school, unemployed and realising that the education I had no choice in receiving was entirely useless for me to get a nice job and buy the nice things that I see others have. It would definitely make sense that the only way to get rich is to redistribute everything.

I certainly wouldn’t trust political leaders to do anything for me when they seem so powerless.

And they are. Everyone is.

The more complex and intermingled the world gets the less power any group has in influencing it to any great degree.

Hell, if companies were so smart and all-powerful they wouldn’t make so many shit movies and lose so much money in making them. They’d only produce a handful of movies a year and each of them would be hits.

Fact is Rand, like Marx, is only right when the world is a cartoon. When one person really does have that much influence. Both Marx and Rand believe that one person has the power to dictate to the economy.

Rand would have them go on strike. Marx would have them work for the majority.

In the battle between Greece and Germany, it isn’t one or two rich industrialists refusing to write-off Greek debts. It’s the German people refusing to subsidise loans to the Greek people.

Despite suggestions to the contrary, fewer of us are subject to the stupidity of powerful individuals in klepto-dictatorships. The nations of the democratic “West” are certainly struggling, but that’s a crisis of complexity. One we have to figure out, not run away from.

And, quite frankly, Ayn Rand has nothing to say about that.

I say farewell to Rand, much as I have put aside my Casio calculator watch. As something that was enjoyable and meaningful and important in its day but is now outclassed and silent before the opportunity, innovation, complexity and challenge of this day.

4 replies »

  1. When you read fiction, don’t forget it is fiction. Freedom and protection of property rights is a valid way to run a country and if you look at the actual historical facts of the USA between 1865-1890, as opposed to the historians conclusions, you will see a wonderful country based on those ideas.

    • Jack, you’ll also see a country with much greater historical inequality and much greater financial instability. We may not have avoided financial disasters in recent history but, at least since the New Deal, the US has been much better at reducing the pain from financial collapse. I’d recommend reading You’ll see the US suffered horrific financial disasters in 1857, 1873, 1907 and 1929. If you read Piketty, you’ll also see that the last time the US had this much accumulation of wealth at the top, and as much inequality, was from the 1870s to the 1890s during the first “Gilded Age”.