When elites command us to “do as we say not as we do”. This is preposterous arrogance…..
Public discourse contaminated by preposterous arrogance
Social forces interpolate their members. This happens through people learning to mouth the views representing interests of these forces. In terms of underlying interests, I try understand differing, opposing views of ‘reality’. In the process I aim to clarify my own view. Because thought processes are important for understanding how one ‘sees’ reality. So this is an ongoing, never-ending, process for me.
First let’s note the clash of ideas between South African elites right now. There is a struggle between political and business elites currently. On the one side you have Jacob Zuma and his circle. they consist of connected ANC politicians and business people. Zuma and company also connect with the Gupta Family from India. On the other side is Pravin Gordhan. He is the cynosure for anti-Zuma protests. He attracts support from opposition parties, and civil society organisations. Even the new left union federation (SAFTU) and radical trade union NUMSA.
Jacob Zuma: egregious stealing under the cover of Radical Economic Transformation
The Zuma and Gordhan (ex-Finance Minister) social forces engage in intense conflict. This led me to this point. I read the verbal attacks and counter-attacks by the two antagonistic groupings. From this I realised that much public discourse is preposterous arrogance. But what do I mean by this term? And why should it be relevant to social and urban development? Furthermore, how do elites get away with preposterous arrogance?
Zuma and the ANC say that the US Embassy is organising ‘regime change’. But Gordhan and Zuma’s opponents say this is a myth. Zuma’s lieutenants say white monopoly capitalists are behind the anti-Zuma movement. However, the others see no proof of this.
Both parties accuse each other of manipulating the state. The public is more aware of this criticism directed against Zuma. Even so, there are similar criticisms made of Zuma’s detractors. Albeit not in the mainstream media. For example, there are reports of tens of billions of Rands leaving our shores illicitly. Which the Treasury under Gordhan appears helpless to stop…. And yet this is not mainstream news.
My search for the truth behind these statements is no academic exercise. I have worked on housing and development strategy for decades. Economic development is crucial in this regard. This is because enterprises and work opportunities provide money for people. With money people can improve their lot. Therefore, policies that enable or impede economic development are important. So it’s not economics alone that we should focus on. But also the politics.
Policies, theories and facts
By that I mean the state and its policies and strategies. Accordingly, our theories about economic development and the state are important. Thus we should pay attention to existing policies, and whether they work. And we should also listen to the contradictory discourses about these policies. Finally, we should ask whether we are hearing truth or preposterous arrogance.
We also need to assess the usefulness of theories in explaining the facts. But what are the facts? This is not a simple question. Because people construct facts. This means that we could have conflicting views about a ‘fact’. Still, let’s focus on ‘facts’ about which there is social consensus. Let’s use these to try and identify true from false statements. We’ll leave the theoretical debates for later. The storms of social crisis are gathering, here and abroad. There is a lot of noise from political leaders, the media and so-called experts. Let’s separate simple, factual truth from fiction as a starting point. But what is preposterous arrogance? How is this concept useful for uncovering truth?
Preposterous arrogance as an Elite state of Mind
The Chambers 20th Century Dictionary (new Edition 1983) defines preposterous. This word means “inverted, having or putting the last first, contrary to the order of nature or reason; utterly absurd”. This dictionary also defines arrogance. This word means “undue assumption of importance”. And ‘arrogant’ means “claiming too much, overbearing”. So preposterous arrogance means inverting reason as an act of great importance. Why do I use the term here? And why do I relate it to the language of elites? Because elites are want to invert the true meaning of things. And they want to give this falsehood a veneer of gravitas.
Decades ago I argued that South Africa’s development needs significant state subsidies. And public and community regulation of aspects of the residential land market. Then the established elites spoke the language of ‘free markets’. (Actually, they still do). At the time one of their policy wonks was Charles Simkins. Charles worked for the Urban Foundation, a think tank for Big Capital. He rubbished our viewpoint. He and others said our proposals were little more than ‘Marxist claptrap’. They warned that our proposals were dangerous for the economy.
Money is key to understanding the political economy of nation states
Attack personalities, don’t critique substance….
Noticeable was that they never critiqued our content. They inverted the discourse from a rational debate to an attack on ourselves. They projected themselves as responsible. And us as reckless ignoramuses. This is preposterous arrogance. I have learnt that preposterous arrogance is an elite state of mind. Regardless of whether it is a left, a centrist or a right wing elite. Elites are authoritarian. The message they give out is similar in its basic form. They are telling us, the ‘gullible public’, “do as we say not as we do”. This is preposterous arrogance. It intimidates and undermines civic responsibility to engage. To participate in discourse about social action. This has hollowed out our democracy. Therefore, we need to recognise it for what is. And not expect a rational debate from elites.
This is why I oppose elites. Yet many issues elites raise are substantive issues of development. So we need to still engage with the issues raised by elites. Without getting caught up in their preposterous arrogance. And thereby conserve our energy for an authentic developmental struggle. Let’s identify preposterous arrogance in current discourses about development. Let’s trace this trend in a major crisis facing our democracy now ….
Preposterous Arrogance over the Treasury Battleground
The struggle between Zuma and Gordhan drew me to this topic. It started a process. The process culminated in this blog. There has been open conflict between the two for the past eighteen months. A short while ago things came to a head. Zuma fired Gordhan as finance minister.
Zuma’s opposition argues this move is to capture the Treasury. Their argument is, with the government purse strings the Zuma faction will do corrupt deals. And in this scenario the Guptas will benefit. Stories abound about their influence over cabinet appointees. And the ways in which their companies benefit from Eskom contracts, etc… This adds to the scandal about Zuma using public funds for his Nkandla homestead.
Then Public Protector (Thuli Madonsela) published an extensive report on Nkandla. And on ‘state capture’. The other day an academic analysis of state capture emerged. Then the amaBhungane journalist project released a trove of e-mails. These are between the Guptas and state officials. You can follow these Wikileaks-type revelations on-line in the Daily Maverick.
Zuma’s sexism and authoritarianism
I hold no brief for Jacob Zuma. His sexism and tribalism are offensive. During his 2005 rape trial his supporters carried slogans “100% Zulu Boy”. They persecuted and drove his victim into exile. In this none other than Julius Malema egged him on. And this trauma drove her into an early grave. Undeterred Zuma became President of the ANC. and then of the Republic (State President). He further concentrated the power of the Presidency, a process started under Mbeki. He has further consolidated his power with traditional rural elites.
This is not good for rural people’s quality of life. And it is bad for democracy. You can read the details in the mainstream media. There is egregious theft of public money for private use at the Nkandla homestead. The ANC government has defended the Nkandla expenditures. They claim they are necessary for the President’s security. Their denial of the truth is a form of preposterous arrogance.
Goldman Sachs is a powerful investment bank that has significant influence over US Treasury decisions
Enter Goldman Sachs
But, methinks all this attention on Zuma has taken our eyes off other thieves. One of these is Goldman Sachs, the well-known US investment bank. Colin Coleman is chief of Goldman Sachs SA. Colin has been standing in Pravin Gordhan’s corner. Supporting him as South Africa’s Knight of Honour. A hero battling enormous odds. His facebook page is replete with posts and pictures. These extol his facilitating Gordhan’s presentations to US investors. He projects his and Gordhan’s functions as saving South Africa from economic disaster. And his facebook friends confirm this viewpoint. They congratulate Colin for what he is doing to save the country.
Criticism and positivism
Colin also authored a Goldman Sachs’ assessment of the South African economy in 2013. For this journalist Richard Poplak took him to task. Alan Hirsch (Director of Development Policy and Practice, UCT) criticised Poplak’s negativity. He commended Colin for seeing the South African glass as half-full. Rather than half-empty. Alan worked in the Presidency under Mbeki. He has a view formed from close involvement in the pre-Zuma ANC administrations. Poplak’s criticism was that the report was out of touch with the reality of ordinary people. That it got lost in a maze of graphs and statistical non-sense. I found that the report resembled the business news on e-TV. The statistics, graphs and trends overwhelm the reader. Without understanding the deeper meaning of it all. Poplak’s point is that there is no deeper meaning.
Poplak’s style is polemical. It paints a picture of Goldman Sachs as a criminal organisation. Without producing the evidence. After 2008 there is a generally unfavourable view of investment banks. And of Goldman Sachs for cooking the Greek government’s books to get them into debt. Yet I wanted to see the evidence about Goldman Sachs’ criminality. After all this is a serious charge to level. And they play a significant role in supporting one side of the SA elite conflict currently. I found evidence in a 2009 article by investigative journalist Matt Taibbi.
Goldman’s US state capture
Taibbi points to the following examples of how Goldman Sachs ‘captured’ key US posts. Goldman CEO Hank Paulson was George Bush’s last Treasury Secretary. He was architect of the bail out of trillions of dollars to Wall Street. Robert Rubin spent 26 years at Goldman. He was Bill Clinton’s former Treasury Secretary. He became CEO of Citi Group, which got a $300 billion bail out from Paulson. John Thain, former Goldman banker, received a multi-billion handout from Paulson. This was to save his company Merrill Lynch.
Paulson put Ed Liddy, former Goldman official, in charge of AIG. AIG had insured Goldman’s mortgage securities but faced insolvency when the market collapsed. AIG received a massive government bail out. It then paid $13 billion to Goldman. Goldman alums are heads of the Canadian and Italian National Banks. And of the World Bank, the NYSE (securities exchange), the last two heads of the Federal Reserve Bank of New York. This sounds very much like the modus operandi of the Guptas…… Goldman-trained bankers are running the US government’s financial policies…
But Goldman Sachs’ Colin Coleman is supporting Pravin Gordhan in his Shining White Knight role of defending South Afgrica’s democracy against Gupta-inspired state capture… So, to quote Donald Trump, “What the hell is going on?” The narrative about saving South Africa is preposterous arrogance…..
And there’s more… Taibbi identifies Goldman’s key role in inflating five financial bubbles. His article argues that Goldman’s strategy is as follows. It positions itself in the midst of a speculative bubble. In this process it sells investments it knows are subpar. It does this by using techniques to drive up the prices, all the while taking commissions on the sales. When the bubble bursts leaving devastation in is wake, Goldman are gone. They are on to creating the next investment bubble.
US citizens protesting outside Goldman Sachs headquarters in New York
Famous economist Keynes identified Goldman’s Investment Trust Game as leading to the 1929 Crash. In the late 1990s Goldman created inflated IPOs of tech companies. Most of these were not profitable. The dot com bubble then burst in 2000. Goldman manipulated initial IPO tech shares. They did this through an illegal process known as “laddering” . They engaged in an ethically questionable process called “spinning” . In this way Goldman was able to rake in enormous wealth as fees.
Taxpayer bail outs
The third bubble was when Goldman underwrote the securitised housing loans that drove sub-prime mortgage prices. In this case it also insured itself against these loans failing. In other words, it bet against what it was selling as sound investments. Thereby Goldman made twice on the deal. First by on-selling the securitised loans. Second by winning the bet that they would go sour. This resulted in taxpayer money bailing out companies like AIG insurance. $13 billion of which went to paying Goldman out as insurance.
A Goldman-owned subsidiary enabled a fourth bubble. This happened when it got regulations removed over speculating in commodities. This enabled the bubble in oil prices to spike at $147 per barrel in 2008. Taibbi wrote this in 2009. At the time he identified the fifth bubble as trading in carbon credits. For several of the felonies referred to above Goldman paid fines. But these were minute in proportion to its profits earned from the same activities.The above are indications of Goldman’s capture of the US state. Yet they are leading the charge of ethical anti-corruption in South Africa? Go figure…
Advert for Investec in London
None of South Africa’s mainstream media cottoned on to Goldman Sachs’ track record. This might reflect their bias in favour of established Anglo-American elites. Including business at the highest level in South Africa. One of these businesses is Investec, a ‘reputable’ private investment bank. Investec’s Chief Executive Officer, Steven Kosseff, was a director of the JSE in 2008. In financial 2016 he earned R87,2 million. The late investigative journalist Barry Sergeant showed how Investec ‘bagged’ our National Prosecuting Authority (NPA) 10 years before the Guptas arrived on the scene.
Sergeant presented evidence of Investec complicity in JCI’s theft of millions of Randgold shares. Koseff denied Sergeant’s allegations. Investec said there was no case against it. Still, Investec funded lawyers to ensure that the Randgold-JCI theft case did not get to court. This is similar to Zuma’s legally avoiding his own day in court. None of this airs in the mainstream media that are quick to pounce on Zuma’s illegal deeds. Why do they not expose the deeds of a reputable South African investment bank? Or, a not-so-reputable US investment bank leading the charge against the Guptas? Koseff said South Africa is a top “regulatory destination” for foreign investors. In the light of Sergeant’s study this is preposterous arrogance.
Preposterous Arrogance as Post-truth
I’m using “preposterous arrogance” to talk about “post truth”. Elite ideology functions to create meaning. It is the dominant ‘explanation’ of reality. It
Investec’s logo appears mostly on the sports and other events that it sponsors
‘explains’ what is true and what is false. The elite message remains “do as we say not as we do”. Mass consumerism is also like that. Advertisments tell us what to consume. But not what the companies are doing when they produce what we are consuming. What companies do is ‘irrelevant stuff’. The point about elite ideology is to get us to focus on consuming and improving our ‘quality of life’. Those of us who ask too many questions are people with an ‘attitude problem’. At worst ‘troublemakers’. We disrupt the normal functioning of society, by interrupting peoples’ freedom to consume.
Preposterous arrogance as a form of discourse goes back to the dawn of our democracy. In fact it preceded the end of apartheid. We need to be aware of this type of language. Because it insinuates itself into development strategy. It speaks about using weapons sales to grow the economy and create jobs. And it influences our thoughts about urban strategy within a broader developmental context. Urban scholars and strategists need to understand the history of this elite conflict. As well as the preposterous arrogance ideologies through which it is articulated…..