Business Day column: State capture not only criminal, but can be lawful and transparent

STATE capture is the flavour of the month. It reminds me of my T-shirt slogan: "Don’t steal, governments hate competition".

I experienced debate capture in a high-level media (New Age-SABC) debate on state capture. The debate was captured by apologists for state capture, whether by "the Guptas" or anyone else.

State capture is a global norm. It is, says the International Monetary Fund (IMF), "the most pernicious and intractable problem" in many countries. A typical definition is "political corruption in which private interests ... influence ... decision-making ... through unobvious channels". It might be lawful or criminal. It works through "the legislature, executive, ministries and judiciary".

The IMF researched capture by companies. Had it added organs of state, civil society, bureaucrats, trade unions, academics and others, there would not be much legitimate government left.

In my debate virtually everyone in the room, including me, was without admitting it engaged in state capture. Capture occurs when people get governments to do things. The difference between getting municipalities to mow sidewalks and multi-billion subsidies is not substance but degree.

State capture may be lawful and transparent, or criminal and clandestine. It ranges from petty to gargantuan. Labour lobbying for minimum wages at the expense of the unemployed is transparent capture. Our most catastrophic capture of state power is Eskom, a grotesque apartheid dinosaur. Our worst "unobvious" capture is the Financial Services Board (FSB), a cabal of unknown, unaccountable characters who have captured all government functions regarding finance.

Our most successful capture dwarfs Nkandla and real or suspected allocation of ministries by the Guptas. It remains unnoticed despite being in plain sight. It is the capture of roughly half of all key positions in the government by the governing party’s unelected alliance partners, the SA Communist Party (SACP) and the Congress of South African Trade Unions (Cosatu). Apart from state capture, they achieved alliance capture by infiltrating the African National Congress (ANC) to the point where it is unclear if "the ANC" means the alliance or one of its members.

All that aside, the sophistry of my debate was that the real culprits are Jan van Riebeeck, Cecil Rhodes, apartheid, the Ruperts, and "white monopoly capital (WMC)", as well as a Tshwane University of Technology conference on the subject, and much else. I am not joking.

The cover-up for government failure has become the vacuous WMC mantra.

Lamentable though modern state capture might be, there may be less of it than before. Apartheid entailed Broederbond state capture. Contrary to racist WMC rhetoric, the Broederbond never represented WMC. It represented mainly lower and middle class white Afrikaners and was rejected by the Ruperts, along with apartheid. Although Rhodes epitomised colonial state capture and Van Riebeeck created rather than captured a colonial state, neither can be blamed for current government failure.

However much liberty-lovers lament modern state capture, it is historically trivial. Most countries were monarchies or colonies. A few escaped the ravages of state capture by adopting free market polices and becoming the world’s most prosperous countries. It is hard to comprehend the implications of state capture elsewhere.

Having captured the state completely, rulers were ruthless. Peter the Great executed corrupt officials, yet he could not stop state capture. Roman Emperor Diocletian executed traders when consumers paid more than he thought they should. Despots like Genghis Khan, Shaka Zulu, Joseph Stalin and Adolph Hitler routinely tortured, murdered and plundered to preserve state capture. Museums display diabolical contraptions for torturing state capture rivals.

Virtually everyone wants to capture government power. Since governments cannot be trusted to resist state capture patronage, they must be shackled by such elaborate checks and balances as rigorously enforced separation of powers, transparency, objective criteria for administrative action, equality at law, and investigative and prosecutorial independence.

• Louw is executive director of the Free Market Foundation.
This article was first published in Business Day on 20 April 2016
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