Experts on the study of corruption distinguish between political corruption and bureaucratic corruption. Political corruption involves vote-rigging, registration of unqualified voters, falsification of voter registers and election results, selling and buying of votes, and wiretapping the phones of political opponents. All this is aimed at helping politicians capture and/or maintain political power. With particular reference to Kenya, political corruption also involves instigation of “ethnic” violence in opposition regions by incumbent political parties in order to scatter voters and minimise their turnout on election day.
Bureaucratic corruption, on the other hand, is used by political leaders and civil servants – the bureaucrats – to extract extralegal incomes for themselves, their relatives, and associates. This involves extraction of bribes and rents in the distribution of public goods and services, theft of public resources, embezzlement of funds from state coffers, nepotism, and the granting of patronage to cronies and relatives, illegal taxation by bureaucrats with benefits accruing to them and their associates, capricious and selective enforcement of state laws and statutes in order to generate benefits for the bureaucrat, and differential treatment of private enterprises with the expectation of kickbacks from the favourably treated enterprises.
There are four categories of bureaucratic corruption in the literature on the subject, according to John Mukum Mbaku, an expert on the subject. The first is cost-reducing corruption, which involves actions by civil servants to reduce the regulation-induced costs of an enterprise below their normal rates. An example here is the illegal reduction of a private firm’s tax obligations to the government and exemption of a business from compliance with certain rules and regulations. In this way, a firm’s transaction costs are reduced and the finances thus saved are shared out between the bureaucrat and the firm owner.
The second type of corruption is cost-enhancing corruption. This occurs in situations where governments place controls on the prices of foodstuffs, which normally leads to hoarding and severe food shortages. Herein, civil servants who control government food stocks extract rents from potential consumers by charging them prices that approximate free market prices. Another way is the extraction of bribes by civil servants from entrepreneurs seeking for licences, including import/export, and investment licences. Yet another is where civil servants simply use the state’s coercive power at their disposal to appropriate private property for their own use, for instance through illegal taxation. In Kenya, the public procurement domain is the arena in which cost-enhancing corruption has been most pervasive. This is the situation in which public officials extract rents from their control of the public procurement process. They do so by demanding kickbacks from tender awardees and by inflating the same and skimming off the excess.
The third type of corruption is benefit-enhancing corruption. Herein civil servants may permit more public benefits such as bursary funds to public schools, or development resources to a particular region, to accrue to an individual or group than is legally permitted. Recipients of such benefits then share them with the bureaucrat on the basis of a prearranged formula. This type of corruption is quite pervasive in Africa and many other developing societies because it is relatively easy to execute and not so easy to detect.
The fourth and final type of corruption is benefit-reducing corruption. This is where bureaucrats simply appropriate for their own private use public benefits that are intended for other private citizens. One example of this is a civil servant manager of a pension fund who can delay the transmission of retirement benefits to pensioners, deposit such funds in a high interest-earning bank account, and subsequently skim off the accrued earnings. This type of corruption is also very easy to undertake because of information asymmetries in much of Africa and elsewhere, with bureaucrats having more information about public benefits programmes than the ordinary citizens. In Kenya, the problem of employers, especially in the private sector and within state corporations, making statutory deductions from employees, such as pensions, health insurance, and income tax, which never reach their legitimate destinations is a perennial one.
The evolution of corruption in Kenya
The fact that corruption in Kenya has reached epidemic proportions is beyond question. In the 1960s and 1970s, bureaucratic corruption manifested itself in bureaucrats’ demands for kickbacks valued at around 10 per cent of the total cost of a public tender, development project, or whatever goods or services were under procurement. By the 1980s and 1990s, the rates had escalated to around 40 per cent. In the current dispensation in Kenya, the rates have maxed out to 100 per cent! This is the situation where, for instance, a development project is conjured up, it is costed, awarded, and paid for, but nothing is done. The exemplification of this is the Kimwarer and Arror dams project scandal in which billions were paid out for nothing. Alternatively, public funds are simply withdrawn from bank accounts and directly pocketed by public officers, a most brazen form of corruption that was amplified by the investigative report on the financial shenanigans at Maasai Mara University.
In view of the pandemic levels corruption has reached in Kenya, a national conference on corruption was convened in January 2019 at the Bomas of Kenya. At the conference, President Uhuru Kenyatta asserted that the government would relentlessly pursue high profile cases already in the courts and launch a crackdown to ensure all corrupt persons are held accountable.
“For the first time,” the President reiterated, “no person is beyond the reach of the long arm of the law no matter how powerful or influential they may perceive themselves to be.” He further revealed that all branches of government were working collaboratively to eliminate the vice. Since then, a big show has been made of demolishing properties constructed on road reserves, on riparian land, and on illegally-acquired public land. Finance Cabinet Secretary Henry Rotich and his Principal Secretary, Kamau Thugge, among others, were arrested and charged with eight counts of financial fraud. Additionally, four high county governors were arrested and charged with corruption. These include Samburu governor Moses Kasaine Lenolkulal, Busia governor Sospeter Odeke Ojaamong, Kiambu governor Ferdinand Ndung’u Waititu, and Nairobi Governor Mike Mbuvi Sonko.
In the 1960s and 1970s, bureaucratic corruption manifested itself in bureaucrats’ demands for kickbacks valued at around 10 per cent of the total cost of a public tender, development project, or whatever goods or services were under procurement. By the 1980s and 1990s, the rates had escalated to around 40 per cent. In the current dispensation in Kenya, the rates have maxed out to 100 per cent!
A lot of fuss has been made before about fighting corruption, right from the 1960s, yet the problem has only gotten worse over time. The question is, given the manner in which the war on corruption has been conducted in Kenya, can it be successful? What chance is there that the current war on corruption will be successful? What will it take to seriously reduce and eventually stamp out corruption in Kenya? Where did Kenya go wrong on matters corruption?
When the rain started beating Kenyans
To understand how Kenya went wrong on the corruption issue, one has to juxtapose it with Singapore. Both Kenya and Singapore were British colonies. Singapore gained independence in 1959 while Kenya gained independence in 1963. Both had the same bureaucratic institutional legacy from colonialism.
For four decades, Kenya’s politics was dominated by one party, the Kenya African National Union (KANU); similarly, the People’s Action Party has remained the ruling party in Singapore since independence. Yet whereas Singapore is consistently ranked the most corruption-free country in Asia and among the top ten cleanest in the world, Kenya is rated among the top corrupt countries in Africa and the world. What accounts for these two realities is squarely the difference between adherence to leadership integrity and good governance principles, and lack of adherence to the same.
When Jomo Kenyatta became Prime Minister of Kenya in 1963, delegations of goodwill trooped to his Gatundu home bearing gifts for him, which he enthusiastically accepted. The gift bearers sought to ensure favourable consideration of their future requests. Even before he was released from prison, efforts were made to make Kenyatta’s post-prison life comfortable: a house was constructed for him; and, as the late Jackson Angaine stated in an interview with The Nation, “I mobilised the Ameru to contribute towards buying a Mercedes Benz car for Mzee Kenyatta shortly before his release in 1961.” This laid the foundation for favouritism, nepotism, and misuse of public office to serve private interests. The foundation for the appropriation of public office for self-enrichment was thus laid by Kenya’s founding president, Jomo Kenyatta, and it has gotten worse with each successive president.
A couple of years after Kenya’s independence, when Bildad Kaggia teamed up with Oginga Odinga and a few other truly nationalist leaders to fight for the rights of the landless for social justice and equity, and for restructuring Kenya’s colonial economy to work for the ordinary citizens, President Jomo Kenyatta publicly ridiculed him for failing to amass the kind of wealth that his former fellow political prisoners at Kapenguria had amassed for themselves: “We were together with Paul Ngei in prison. If you go to Ngei’s home, he has planted a lot of coffee and other crops. What have you done for yourself? If you go to Kubai’s home, he has a big house and has a nice shamba. Kaggia, what have you done for yourself? We were together with Kung’u Karumba in jail now he is running his own buses. What have you done for yourself?” Jomo Kenyatta boomed at Kaggia in disgust for refusing to use his position and ethnicity to accumulate wealth instead of teaming up with Odinga to oppose the acquisitive behavior of the new elite.
A couple of years after Kenya’s independence, when Bildad Kaggia teamed up with Oginga Odinga and a few other truly nationalist leaders to fight for the rights of the landless for social justice and equity…President Jomo Kenyatta publicly ridiculed him for failing to amass the kind of wealth that his former fellow political prisoners at Kapenguria had amassed for themselves.
Kaggia’s response to this rebuke was emblematic of a true servant-leader with the highest sense of integrity and commitment to the general good. He calmly responded: “I was not elected to Parliament to acquire a large farm, a big house or a transport business. My constituents sleep in mud houses. They have no shambas and have no businesses. So, I am not ashamed to be associated with them. By the time they have these things, I will also be able to have them for myself.”
Unfortunately for Kenya, as elsewhere in Africa and even beyond, such leaders of integrity have been rare. Indeed, the few extant ones were, at best, systematically marginalised from the centres of power and, at worst, silenced through assassination. For instance, when Josiah Mwangi Kariuki (popularly known as JM) incisively critiqued the government and declared that the manner in which the state was being used in Kenya would lead to a Kenya of ten millionaires and ten million beggars, he was assassinated and his body dumped in Ngong forest.
What Singapore did right
Just like Kenya’s Kenyatta, when Lee Kuan Yew became the first Prime Minister of Singapore in June 1959, he received many gifts from well-wishers who, like their Kenyan counterparts, wanted to ensure favourable consideration for their future requests. However, Lee declined to accept these gifts in order to set an example for his political colleagues and all civil servants.
A former senior civil servant, Eddie Teo, revealed that public servants watched and followed the example of Lee and his colleagues and “were incorruptible because they were incorruptible”. Eddie Teo and his colleagues were “motivated by the exemplary conduct set by our bosses” because “they lived simple, frugal and unostentatious lives” and the anti-corruption law was applied to everyone, regardless of position, by Singapore’s Corrupt Practices Investigation Bureau (CPIB).
The country relies on two key laws to fight corruption: The Prevention of Corruption Act (PCA), and the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). The PCA applies both to persons who give and those who receive bribes in both the public and private sectors. When applied, the CDSA confiscates ill-gotten gains from corrupt offenders, including direct benefits as well as profits made by individuals or companies from contracts awarded due to bribery. The two laws combine to make corruption a high-risk, low-reward activity in Singapore.
Furthermore, the Singapore Public Service is guided by a Code of Conduct, which sets out the high standards of behaviour expected of public officers based on principles of integrity, incorruptibility, and transparency. The Code of Conduct is enshrined in the Government Instruction Manual for public officers and provides that a public officer (a) cannot borrow money from any person who has official dealings with him; (b) cannot at any time have unsecured debts and liabilities that are more than three times his/her monthly salary; (c) cannot use any official information to further his/her private interest; (d) is required to declare his/her assets at his/her first appointment and do so annually thereafter; (e) cannot engage in trade or business or undertake any part-time employment without approval; and (f) cannot receive entertainment or presents in any form from members of the public.
In a nutshell, unlike Kenya, Singapore resolved from the very beginning to fight corruption as a matter of strategic imperative to ensure the rule of law, sustain a healthy state of governance, and facilitate economic and social development. Right from independence, the founding political leaders saw it as their onerous task to set good examples for public officers. They created, by personal example, a climate of honesty and integrity, and made it patently clear to public officers that corruption in any form would not be tolerated.
Perhaps the best exemplification of Singapore’s zero tolerance of corruption is the fact that the anti-corruption law is applied to everyone equally, including top government and ruling party officials. Among top political leaders that have been prosecuted include the Minister for National Development, Tan Kia Gan, in 1966; the Minister of State, Wee Toon Boon, in 1975; the Member of Parliament and trade union leader, Phey Yew Kok, in 1979; and the Minister for National Development, Teh Cheang Wan, in 1986. The case of MP and trade union leader Phey Yew Kok is particularly illustrative of Singapore’s unrelenting commitment to zero tolerance of corruption. Kok was charged with misappropriating $100,000 trade union funds in 1979. He, however, fled to exile. When, at age 81, he returned to Singapore in 2015 after 35 years abroad, his case was re-opened by the CPIB and he was prosecuted on 34 charges involving more than $450,000, almost five times the original $100,000 he was accused of stealing from trade union funds in 1979. Kok pleaded guilty and was sentenced to five years in jail.
In a nutshell, unlike Kenya, Singapore resolved from the very beginning to fight corruption as a matter of strategic imperative to ensure the rule of law, sustain a healthy state of governance, and facilitate economic and social development. Right from independence, the founding political leaders saw it as their onerous task to set good examples for public officers.
Available evidence strongly indicates that the most important difference between a corrupt and corrupt-free state is the quality of their governance. A country’s incidence of corruption is related to its quality of governance. Multiple studies conclude that countries with high corruption have a low quality of governance, those with medium corruption have fair governance, and those with low corruption have good governance.
Singapore has minimised corruption because of the People’s Action Party (PAP) government’s strong political will and the provision of adequate personnel, budget and operational independence to enable the CPIB to enforce the Prevention of Corruption Act (PCA) impartially, regardless of an offender’s status, position, or political affiliation. Corruption offenders in Singapore are punished according to the law, without their jail sentences being suspended, or without being pardoned by the president. Consequently, corruption is perceived as a high risk, low reward activity in Singapore today because those persons convicted of corruption offences are punished according to the law.
As early as 1996, Singapore was ranked first among the 12 Asian countries in the Hong Kong-based Political and Economic Risk Consultancy’s (PERC) corruption survey. The PERC attributed Singapore’s top ranking to its strict and consistent enforcement of anti-corruption laws as corrupt officials, particularly high-ranking ones, are dealt with in Singapore with a severity rarely seen elsewhere. The country consistently ranks among the least corrupt in Transparency International’s annual Corruption Perception Indices.
Lessons from Singapore
A number of lessons can be extracted from the Singaporean experience. The first, and perhaps the most critical one, is the importance of political will in the fight against corruption. For the war to succeed, a country’s political leadership must be sincerely committed to the eradication of corruption. They must demonstrate exemplary conduct, adopt a modest lifestyle, and eschew indulging in corruption themselves. Anyone found guilty of corruption must be punished, regardless of his or her position or status in society. If the big fish are protected from being prosecuted for corruption, and only the small fish are caught or prosecuted, as is the case in Kenya, the anti-corruption strategy will lack credibility and is unlikely to make any difference.
The second lesson from Singapore is that to effectively combat corruption, incremental measures won’t suffice. Instead, comprehensive anti-corruption measures must be employed. These include comprehensive anti-corruption laws and a non-corrupt and autonomous anti-corruption agency. The anti-corruption legislation must be comprehensive enough to prevent loopholes and must be periodically reviewed to introduce relevant amendments whenever required.
The third lesson is that the anti-corruption agency must itself be incorruptible. To ensure this, it must be controlled or supervised by an incorruptible leader. The agency must be staffed by honest and competent personnel. Overstaffing should be avoided and any staff member found guilty of corruption must be punished and dismissed from the civil service.
The fourth lesson from the Singaporean experience is that to reduce the opportunities for corruption in those government departments that are vulnerable to corrupt activities, such as customs, immigration, internal revenue, and traffic police, such departments should review their procedures periodically in order to reduce the opportunities for corruption.
The fifth lesson that the Singaporean experience teaches us is that the incentive for corruption among civil servants and political leaders can be reduced by ensuring that their salaries and fringe benefits are competitive with the private sector. The long-term consequences of low civil service salaries are unfavourable as talented civil servants will leave to join private companies for higher pay, while the less capable will remain and succumb to corruption to supplement their low salaries. However, governments might not be able to increase salaries unless there is economic growth and adequate financial resources. The basis for making civil service salaries competitive with the private sector is thus good governance and effective economic management that ensure sustained economic growth and development.
In short, Singapore’s success in minimising corruption can be attributed to its dual strategy of reducing both the opportunities and incentives for corruption. Indeed, Singapore’s experience in curbing corruption demonstrates that it is possible to minimise corruption if there is strong political will. Needless to say, the situation becomes hopeless if such political will is lacking, when political leaders and senior civil servants pay only lip service to implementing anti-corruption strategies in their countries. Unfortunately, this has been the case in Kenya where the anti-corruption war has been waged half-heartedly, where low-level corrupt individuals are prosecuted while those who perpetrate grand corruption are celebrated and cleared to run for top political offices, and where even the half-hearted war is politically weaponised and applied selectively. It is thus no wonder that the scourge of corruption continues to grow in Kenya and constitutes perhaps the single most lethal threat to the future of the state.
Other successful strategies
Beyond the momentous experience of Singapore, evidence from elsewhere, such as the Doing Business Indicators, demonstrates that there is a high correlation between the incidence of corruption and the extent of bureaucratic red tape. This suggests the imperative need for cutting bureaucratic red tape by eliminating needless regulations while safeguarding the essential regulatory functions of the state. Some of the regulations on the books of many countries, such as those related to starting a new business, registering property, engaging in international trade, and a myriad other certifications and licences, are sometimes not only extremely burdensome but governments hardly ever pause to examine whether the purposes for which they were introduced are still relevant to the needs of the present. Such are the regulations that induce corruption and most simply need to be done away with.
Second, experience from elsewhere indicates that creating transparency and openness in government spending is another great strategy for minimising corruption. Subsidies, tax exemptions, public procurement of goods and services, soft credits, and extrabudgetary funds under the control of politicians constitute the various ways in which a government manages public resources. Governments collect taxes, tap the capital markets to raise money, receive foreign aid and develop mechanisms to allocate these resources to satisfy multiple needs. Some countries do this in ways that are relatively transparent and make efforts to ensure that resources will be used in the public interest. The more open and transparent the process, the less the opportunities for malfeasance and abuse. This calls for high levels of citizen literacy, and an active civil society with a culture of participation. A good example here is New Zealand, which remains consistently one of the top performers in Transparency International’s Corruption Perception Index. New Zealand is a pioneer in creating transparent budget processes, having approved in 1994 the Fiscal Responsibility Act that provides a legal framework for transparent management of public resources.
Beyond the momentous experience of Singapore, evidence from elsewhere…demonstrates that there is a high correlation between the incidence of corruption and the extent of bureaucratic red tape. This suggests the imperative need for cutting bureaucratic red tape by eliminating needless regulations while safeguarding the essential regulatory functions of the state.
A third strategy recommended by experts, and which is based on the Singapore experience, involves deploying smart technology. As already noted above, one of the most fertile sources of corruption in the world is the purchasing activities of the state. Purchases of goods and services by the state can be sizeable in most countries – somewhere between 5 and 10 per cent of gross domestic product. Since the awarding of contracts involves a measure of bureaucratic discretion, and given that most countries have long histories of graft, kickbacks, and collusion in public procurement, an increasing number of countries have opted for procedures that guarantee adequate levels of openness, competition, a level playing field for suppliers, and fairly clear bidding procedures.
Singapore has achieved this by streamlining cumbersome administrative procedures and slashing red tape to provide an efficient and transparent civil service so that no one needs to bribe civil servants to get things done. A national ICT masterplan was set up in the 1980s, which is updated regularly to enable the government to exploit technology to benefit the country and to spur economic growth. Through this, the government implemented e-services to enhance the accessibility and convenience of government services. Now thousands of government services are transacted online by Singaporeans in the comfort of their homes. With regard to public procurement, Singapore installed GeBIZ, an online procurement portal because of which, today, all government procurement is done online. The procurement specifications are posted online and are available to all prospective contractors, both national and international. Transparency and efficiency are enhanced, and opportunities for abuse and corruption are drastically reduced.
A third strategy recommended by experts, and which is based on the Singapore experience, involves deploying smart technology. As already noted above, one of the most fertile sources of corruption in the world is the purchasing activities of the state.
Chile is another country that has deployed the latest technologies to create one of the world’s most transparent public procurement systems in the world. ChileCompra was launched in 2003, and is a public electronic system for purchasing and hiring based on an Internet platform. It has earned a worldwide reputation for excellence, transparency, and efficiency. It serves companies, public organisations as well as individual citizens, and is by far the largest business-to-business site in the country, involving 850 purchasing organisations. In 2012 users completed 2.1 million purchases issuing invoices totaling US$9.1 billion. It has also been a catalyst for the use of the Internet throughout the country.
In many of the measures discussed above, the underlying philosophy is one of eliminating the opportunity for corruption by changing incentives, by closing loopholes and eliminating misconceived rules that encourage corrupt behaviour.
But an approach that focuses solely on changing the rules and the incentives, accompanied by appropriately harsh punishment for violation of the rules, is likely to be far more effective if it is also supported by efforts to buttress the moral and ethical foundation of human behaviour. For the anti-corruption war to succeed, the Singapore example illustrates that it requires unrelenting political will on the part of the top political leadership and it must be waged comprehensively and without fear or favour. Otherwise, the manner in which the war against corruption has been conducted in Kenya amounts to mere window dressing; it is emblematic of the proverbial preaching of water while simultaneously partaking of wine.
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John Magufuli: The Death of a Denier-in-Chief
Late president John Magafuli never was the anti-corruption saviour international media claimed.
Tanzania, a country that produced Julius Nyerere, is a country tottering on the precipice of a pandemic catastrophe. The philosopher-president ruled for 23 years and put the nation on the international map as a frontline state that stood up to Apartheid South Africa and helped liberate modern Uganda by ridding it of Idi Amin.
With the abrupt death of its populist president John Magufuli on March 17, 2021, ostensibly from a COVID-19 related ailment, Tanzania finds itself at a crossroads, insofar as tackling the devasting disease is concerned. Magufuli who was the commander-in-chief of the armed forces, became the denier-in-chief of COVID-19. The disease has decimated scores of Tanzanians, including top government officials.
Magufuli was hailed as a tough anti-corruption crusader, as he entered state house in 2015. Ordinary Tanzanians initially saw him as their saviour in the fight against institutionalised state corruption. The international media also saw him as a man keen on tackling state corruption, “but Magufuli was all about optics,” said a Tanzanian journalist. “He wasn’t fighting state corruption pers se, what he was doing was to get rid of Jakaya Kikwete’s (immediate former president) networks in the government and replace with his own. So, it was just a matter of time before Tanzanians and the world realised Magufuli was just interested in musical chairs.”
Magufuli was re-elected on October 28, 2020 in one of the most controversial post-Nyerere’s Tanzania elections with a whopping 84 percent. His “true colours” revealed themselves after Benjamin Mkapa’s death in July 2020. After mourning the ex-president, Magufuli turned his attention to the business of crippling the opposition.
Magufuli was a protégé of Mkapa who served as president between 1995–2005. It was Mkapa, who in 2015, prevailed on the ruling Chama Cha Mapinduzi (CCM, ‘Party of the Revolution’) national executive council (NEC) to pick newcomer Magufuli as its flagbearer for what was to be a hotly contested general election in October 2015. Magufuli was then primed to run against Edward Lowassa, a CCM stalwart, who had bolted to Chama Cha Democrasia na Maendeleo (CHADEMA), after not clinching the CCM ticket, in which he was touted as one of the hot favourites.
The “true colours” was the ruthlessness with which Magufuli pursued the opposition in the lead-up to the presidential elections. That massive victory came in the backdrop of President Magufuli’s continuous campaigns since being inaugurated as the fifth president in 2015. “Magufuli never stopped campaigning,” said a Tanzanian journalist: “He rode on the wave of populism – dishing out money and favours to select supporters and well-choreographed individuals wherever he went.”
The 2020 Magufuli campaigns were a mirror-image of his mentor’s similar campaigns in 2000. Just like Mkapa’s mission was to presumably pulverize the nascent opposition, Magufuli’s mission 20 years later was similarly to ensure that the “irritating” opposition is no more and is, literary ran out of town. Mkapa in the October 2000 elections unleashed so much violence on the opposition that many of its supporters sought exile in neighbouring Kenya, after the elections.
Mkapa’s use of unmitigated force by Jeshi la Polisi (Tanzania has a police force, as opposed to a police service) and Field Force Unit (FFU), a paramilitary outfit much like Kenya’s dreaded General Service Unit (GSU) was unprecedented in Tanzanian politics. Just like Magufuli, it seems Mkapa’s “true colours” were revealed only after his mentor’s death the previous year on October 14, 1999. Mkapa was a protégé of the founding father Julius Kambarage Nyerere.
It was Nyerere who held Mkapa’s hand in 1995, after influencing his nomination by CCM, and single-handedly campaigned for him throughout the country. Tanzania held its first multiparty general elections in 1995, pitting CCM against a disparate opposition for the first time since its formation in 1977.
He dished out money and favours to select supporters.
Revisiting this unparalleled violence orchestrated on fellow Tanzanians, Mkapa, the former journalist-turned-diplomat-turned-president in his memoirs: My Life, My Purpose – A Tanzanian President Remembers published in January 2019, regretted the 2000 election ordeal. To some Tanzanian journalists and political analysts, Mkapa and Magufuli are today referred to as the chief advocates and perpetrators of state violence in post-independent Tanzania.
Both the presidential elections of 2000 and 2020 happened under a cloud of America’s own election problems: In 2000, it was the “Florida fiasco.” Florida was then governed by the Republican’s presidential candidate, George Bush’s brother, Jeb Bush. Bush was running against the Democratic Party’s Al Gore. Jeb was allegedly accused of rigging on behalf of his elder brother.
Like the Americans say, the electoral college vote was too close to call: the vote was not only going to determine who was going to be the winner of the states’s 25 votes, but the next president after Bill Clinton. A recount was called by the Democrats and for a brief moment, the democrats believed they had taken it, only for the Republicans to also ask for their own recount. Bush won with a razor thin win vote. The democrats were not persuaded. To cut a long story short, the sunshine state’s case found itself in the supreme court, where the republican-led court declared George Bush the eventual winner.
In 2020, with both the Tanzania and US elections being held days apart, America once again came under the world spotlight after the “Pennsylvania problem”, in which President Donald Trump claimed his votes had been tampered with and paid for a recount. The MAGA Republican Party candidate was defending his seat against “sleepy Joe” a derogatory tag given by Trump to Joe Biden.
The citing of both examples here is to emphasise that America in 2000 and 2020 could not claim a moral compass to the Tanzania government’s excesses in its elections. Covering the 2000 elections, I remember in Dar es Salaam, a CCM top official telling us journalists that America could not lecture Tanzania on matters election – “they should first deal with their own election rigging in Florida, before accusing us of unleashing violence and rigging the islands’ results.”
Nyerere had always been opposed to the twin islands of Pemba and Zanzibar’s divorce with the mainland Tanganyika – a sticking sore thump between the mainland and the islands, since the republic turned to plural politics. But he never advocated state violence, instead, he sued for dialogue and persuasion.
Magufuli was determined to put the opposition in its place this time round: In a parliament of 261 members, the opposition only won seven. “By the time I’m through with Tanzania, there’ll be no opposition in the country,” said the deceased in one of his campaign rallies.
There is not a doubt that he loathed the opposition, so much so that he warned the regional commissioners and election officials, “I don’t pay you so that you can allow opposition to win.” Tume la Uchaguzi (National Election Commission) flatly refused any presidential debates and told the opposition it could debate among itself if it so wished.
“In Tanzania, CCM ni tasisi,” a local journalist reiterated to me. Literary it means the ruling party CCM is an institution. Figuratively it means, CCM is Tanzania and Tanzania is CCM. Anybody going against the “wishes of the party” would be crushed. The CCM’s propaganda machinery against the leading opposition figure Tundu Lissu of CHADEMA was geared to pulverize all his efforts of running a successful campaign. “He was being hunted down like a wild animal,” said the journalist.
Magufuli claimed Lissu was a supporter of LGBTQ and that he was a tool of the West being used to campaign for mashoga, homosexuals’ rights. Several African presidents during their re-election campaigns have turned the hot-button issue of LGBTQ, their favourite bogeyman: In the terribly conservative African societies, nothing evokes emotions of antipathy like suggesting gay-ism could be mainstreamed. Yoweri Museveni has done it, John Magufuli did it, just like Robert Mugabe did it before him.
CCM being Tanzania and Tanzania being CCM, not even the bravest of private media would dare report on the opposition or against Magufuli and CCM. “There was total blackout on the opposition by the media. All what Tanzanians could read and listen to, on politics, was on the ‘indefatigable Magu’ and his infrastructural developments,” said my Tanzanian journalist friend. Hence, Tanzania media did not report on politics – it reported on Magufuli, the person.
By the time I’m through with Tanzania, there’ll be no opposition in the country
Being heavy users of social media, Tanzanians turned to VPN – virtual private network. Found as an app in many smart phones, it protects one’s communication from snoopers like government agencies and hackers. What VPN does when activated is to bypass the conventional internet service providers (ISP) when connecting to the internet. In the case of Tanzania’s government shutting down its ISP, tech savvy Tanzanians resorted to VPN to access facebook and especially Twitter, to fend off the states’s eavesdropping.
This is the reason why Magufuli ordered all social media outlets shut, said the journalist. All what the Tanzania Communication Authority needed was a nod from Magufuli. A consumer of foreign news outlets, Tanzanians also resorted to BBC, Deutsche Welle (Sauti ya Ujerumani) and VOA, to stay informed on their country’s politics. “This is how many of them were informed and kept tabs on Lissu’s campaigns,” said the journalist.
Even after being sworn-in for the second term, President Magufuli pursued the browbeaten opposition. Chief opposition figure Lissu had to escape the country a second time. “Run or be run over, these people are not joking,” Lissu was ostensibly warned by his intelligence team. In September 2017, Lissu had survived an assassination attempt in Dodoma, that saw his vehicle sprayed with bullets by “unknown” assailants, as he left parliament for his house for lunch. On November 7, 10 days after the elections were over, he hid at the German embassy, then onwards to Brussels, where he had been recuperating for three years after treatment in Nairobi.
The former MP for Arusha Urban Godbless Lema also skipped the country and sought refuge in Kenya after claiming government people were after him. Lema, with his family was granted asylum in Canada.
Nyerere’s CCM may have operated in the one-party era during the cold war, but many Tanzanians of the post-independent generation remember those days with nostalgia. “The party was more democratic and free, unlike today,” said a former CCM mkereketwa (party diehard).
Magufuli’s populism was laced with autocratic tendencies. He told fellow Tanzanians msinijaribu mimi ni jiwe (don’t try me, I’m as tough as a rock), meaning he prided himself in being tough-headed.
“Magufuli’s CCM in the era of multiparty brooks no dissent, is dictatorial and dangerous, while Nyerere’s CCM preferred a palaver type of democracy where party issues were discussed until it arrived at a consensus,” said a University of Dar es Salaam don.
South Africa: A New Politics From the Left?
Assuming today’s socioeconomic crisis benefits the Left is folly. That will only happen if we have the political vision to make class the fault line of social polarisation, and for that we need to face the challenge of constructing a new party.
Over the last decade, the Left in a number of Western countries has undergone a historic transition from “protest to politics,” to borrow the words of the late Canadian Marxist Leo Panitch and his frequent co-author Sam Gindin. From Podemos in Spain to Sanders in the United States, a new wave of parties and electoral coalitions have emerged and made rapid gains. Despite setbacks and defeats, Panitch and Gindin’s indispensable analysis of these events in The Socialist Challenge Today, casts them in an unambiguously positive light. None of the examples they study offer formulas for resolving the vexing dilemmas facing the socialist movement in our globalised present.
But in their determination to take state power seriously they constitute an unmistakable step forward, after decades in which the Left’s confinement to episodic instances of mobilisation left the electoral field wide open to the parties of business. Part of this “new new” Left’s success stems from a willingness to shake free of its own past. Building a viable socialism of the 21st century, they argue, requires dispensing with the outmoded parts of the Leninist model, like its wager on insurrection, while retaining that which still holds value, like its internationalist spirit.
These developments hold important lessons for us on the South African Left. Just under a decade ago it seemed that we were on the verge of effecting a similar transition “from protest to politics.” During the first decade and a half of democracy, a socialist opposition had found a locus in the so-called “new” social movements—like the Anti-Privatisation Forum—which grew in reaction to various parts of the ruling African National Congress’ neoliberal agenda.
These waged a number of important defensive struggles and scored a few key victories but fundamentally did nothing to loosen capital’s grip on policymaking. By the end of the 2000s most were a spent force. It became clear to a growing segment of the Left that lasting gains would not be achieved unless social agitation were more effectively linked with efforts to seise governing power. The ability to think these more ambitious terms received a major boost when the National Union of Metalworkers South Africa (NUMSA), the nation’s largest manufacturing union, appeared to redraw the political map of the country by breaking from the ANC, amidst a wave of working class militancy.
Of course for the “official” left which NUMSA represented there had never been any turn away from politics as such. But decades of compromise had bred a form of politics that had become completely unmoored from the guiding thread of class antagonism. NUMSA’s move thus constituted a kind of mirror image transition—from a back-room corporatism to a politics more grounded in the methods and spirit of “protest”. This is what imbued the “NUMSA moment” with such hope—it promised to re-connect the two sides of South Africa’s bifurcated Left, and supply the strategic elements that had been missing from each. By matching the militancy and class-independence of the social movement Left with structural and organisational might of the “official” Left, it seemed possible that a mass socialist movement could be rapidly brought into being.
That was not to be. From today’s vantage it’s impossible to regard the NUMSA moment as anything but an abject failure. The political party which eventually issued from it is the farthest cry from the unifying force that so many had hoped for. While the international left has been able to advance by breaking with its shibboleths, the Socialist Revolutionary Workers Party (SRWP) has fallen back on a slavish appropriation of Bolshevik ideology, almost comical in its extremes.
Despite enormous resources, a large part supplied by a US-based billionaire, the party ran a dismal general election campaign in 2019 where it failed to get even a tenth of NUMSA’s own membership to vote for it (it ultimately only amassed 25 000 votes nationally, below the threshold to obtain one seat in Parliament). It’s since never recovered, joining a host of other failed socialist parties on the margins of political life. Marginality seems in turn to have degraded the internal culture of the party, which now resembles closely the Stalinism of the ANC-aligned South African Communist Party in all its worst aspects.
The floundering of the NUMSA moment is a terrible blow. But the setback inflicted on us will far greater if we fail to draw the correct lessons from it. Perhaps the most worrying outcome is that it precipitates a slide back into movementism, and shuts the window that we’ve had to execute the transition from “protest to politics.” Party politics acquired a bad name during the era of “protest” in South Africa, and many on the Left already feel that the SRWP’s example vindicated their worst suspicions.
But what the SRWP actually reveals to us is are not flaws inherent in the party-form as such, so much as the limits of a certain kind of party, one founded on a hidebound Leninism. If the Left were to abandon party building altogether there would, quite simply, be no socialist future. All visions of radical change that eschew parties and an active takeover of the state suffer from a principal defect in that they misconceive the nature of class formation—the process by which individuals become aware of their class position and begin to articulate their politics through it. This is presented as a quasi-automatic effect of the capitalist class structure.
But history offers no support for such a view. Class is impactful because it frames the options we have over so many major decisions in our lives—but not so narrowly as to make resistance to one’s employer, or the system behind him, inevitable. Indeed, the extreme vulnerability of workers under capitalism means that individualised modes of coping tend to be more commonplace than collective action. That’s why socialist consciousness has been the exception rather than the norm in the global history of capitalism, and exceedingly rare in the absence of a well-organised party. As Panitch argued with the force of a life’s work—parties make classes as much as they are made by them.
Thankfully, an outright repudiation of the party-form is not really where we are at in South Africa. The variant of movementism which took hold here, and which has revived in the aftermath of the NUMSA moment, was not really this more extreme kind, which denies the ultimate need for a party. Rather what it advocates is a downgrading of the role of party building or its deferral to some indefinite future.
What seems to be the common premise for this position is that party building can only succeed when perfectly timed to the right “objective conditions” —conditions which are only likely to form in the wake of a rupture moment defined by intensified street-level mobilisation. Only the transformation of mass consciousness brought about by such an episode of struggle can furnish the base for a party. Moreover, efforts to “impose” a party on the working class before this are liable to be rejected by its most conscious and active layers. Cut off from nourishing energy of grassroots movements, they are likely to grow in authoritarian directions. The task of socialists in the present, therefore, is devote ourselves to strengthening movements, and hope that a party may gestate from within them in some future context.
Related but distinguishable from this, is an ingrained hostility on the South African Left towards electoral politics. This view tends to draw a sharp line between the electoral arena and movements. While movements unlock popular power by sensitising their participants to their potential for collective action, elections offer no such platform for consciousness-raising. Instead, they tend to reproduce the atomisation of liberal democracy, and to fortify the myth that progress is possible within it. Moreover, movements which take the electoral road subject themselves to debilitating pressures. The logic of getting the vote tends to conflict with the logic of grassroot mobilisation, and all too often to overwhelm it.
Movementist positions contain many insights. It is wise, for example, to be attuned to the importance of ruptural breaks—the likelihood that we will ever get to a mass party simply through a molecular accretion of our ranks is slim. But the contention that movement building alone is the best way to prepare for such a rupture fails to take seriously the inherent weaknesses of social movements.
Of the numerous movements which sustained the first era of “protest” in post-Apartheid South Africa virtually none remain (barring one major exception). New ones have of course cropped up, and a tide of less organised community protests has continued unabated across the country. But these show equally little likelihood of autonomously cohering into anything bigger or more resilient.
It’s now very hard to avoid the conclusion that their failures resulted from internal rather than external factors. The model underpinning them rested on localised mobilisation around immediate demands, while actively eschewing efforts to politicise a leadership layer. Some of their more excitable proponents portrayed them as crucibles of anti-capitalism, in which the mere experience of collective decision making offered a form of political education beyond what traditional forms of Left organisation could hope to match.
But in doing so they exhibited the same fallacious thinking about class formation that informs all ventures aimed at “changing the world without taking power.” Much less a break with capitalism, it’s not clear that social movements even succeeded in getting most of their members to question their loyalty to the ANC. That left them prone to demobilisation and disorganisation when circumstances changed, when defeats where incurred or when key individuals drifted off or were co-opted.
One strategic upshot of this critique is that the trade-off between movement and party building posited by movementists is a false one. It’s likely that there is no winning formula for transforming single issue mobilisations into lasting, mass organisations without NGOifying them. But what we can do is to ensure that the small advances made by movements each time they arise are not dissipated. After all—the notion that struggle develops consciousness is not a false, what movementists get wrong is overstating the extent to which it does so organically. Virtually every movement throws up militant leaders, who stand to become tribunes for socialist politics if they can be identified, recruited and supported appropriately. This is work that a party is best suited to undertake.
But facing up to the limits of social movements should lead us to even stronger conclusions than this. It should lead us to question the overwhelming strategic significance that they have been accorded in the politics of the “independent left.” If movements are tough to sustain and to politicise, they may not be the vehicles best suited to bringing about a political rupture or ensuring that it outcome favors the Left.
Of course this was a strategic orientation that was largely foisted on us by circumstance. The stranglehold that the Tripartite Alliance (whose third member is the Congress of South African Trade Unions) exercised on organised labour and mass politics generally left little room for an alternative. But the situation has changed. The factionalisation of the ANC, the split in COSATU and the emergence of its rival, the South African Federation of Trade Unions, have created an opening for a more militant socialism to regain a foothold in organised labour. This ought to be the clear priority of socialists.
For all its infirmities, the union movement still presents a much more promising site for grounding socialist politics in a mass base. Although this may not hold for much longer, unions remain mass membership organisations with considerable resources. Most importantly, and most differently from social movements, they have access to structural power (i.e, the power to withdraw labour and shut down the economy). Here is one insight of Leninism which time has not invalidated– that our project will most likely fail unless that structural power is at its center.
If organised labour is once again to become our strategic focal point, this strengthens the case for not consigning the party to an intangible future. The synergies between party-building and organisation building are arguably stronger in the case of unions than social movements. At a fairly abstract level, one reason for this is that union building (or revitalisation) typically relies on a few individuals being prepared to take bold action out of moral conviction. Marxists have often argued something very different—that shopfloors collectivise as soon as workers wake up to their material interests. But narrow self-interest is unlikely to ever motivate someone to take the first steps towards organising their co-workers, since doing so incurs enormous risks but yields no extra benefit—the essence of the “free-rider” problem.
Thus, it’s not a coincidence that so often in history, socialists of various stripes have been significantly overrepresented among the “militant minority.” The values that draw people to the banner of socialism are often the same as those that move them to action against workplace injustices. It’s also not a coincidence that a militant minority is more likely to take shape when socialist ideas are more prominent in the public realm.
Arresting the decline of South African unions, and returning them to their proud history of worker control and grassroots democracy will require a herculean organising effort. At the simplest level this is why we need an organisational vehicle that at least broadly resembles a party. Without one we have no real means of translating strategic debates into action—of coordinating our energies towards the tasks most likely to yield long-term gains.
There’s therefore a case for not delaying in building a fighting organisation, that tries to cohere leading militants from workplace and community struggles around a socialist program. But such an organisation should do more. As soon as it has the numbers needed, it should seek to involve itself in elections. In all likelihood it would have to start at the local level, and logic would dictate that it seeks out community and social movement partners in doing so. But as quickly as possible is should seek to graduate to the national stage. South Africa’s unusually proportional representation electoral system (which was in fact designed to provide space for smaller parties), makes this a reasonable short-term goal.
Arresting the decline of South African unions, and returning them to their proud history of worker control and grassroots democracy will require a herculean organising effort. At the simplest level this is why we need an organisational vehicle that at least broadly resembles a party.
The first thing that sceptics of this strategy tend to get wrong is that they overstate, or misunderstand, the legitimacy problem facing formal political institutions. The SRWP seems to think that any worker with lingering attachments to electoral politics is suffering from “false consciousness.” But in our current circumstances, there is nothing the least bit irrational about remaining invested in the electoral arena, even while recognising the severity of its class bias. The simple reason for that, is that there is no existing social force capable of challenging state power while remaining entirely outside its institutions, nor does one show any prospect of coming into being in any foreseeable horison. Worker organisations in SA are locked a desperate defensive struggle—not preparing to set up a parallel state.
It’s not a failure of dialectical imagination that causes people to conflate politics with elections, but an appraisal of our situation that is more accurate than the one provided by the apostles of imminent revolution.
It’s thus not surprising that despite the tremendous alienation produced by decades of neoliberalism, electoral movements in the West have been able to engineer a political realignment that was much deeper than what post-2008 movements were able to achieve on their own. Their location within the domain of mainstream politics provided both visibility but also a kind of credibility—they promised to take over the institutions in front of us, rather than replace them with ones we can’t see and can’t yet imagine. Several of these examples stood the movementist model on its head. Rather than an electoral breakthrough growing out of a period of intensified movement activity, it was the electoral arena itself that has delivered the rupture moment, the energy from which can then be filtered down to social and labour struggles.
In the process they challenged another fallacy of movementism—that the electoral arena is entirely inimical to a politics of struggle. Sanders, Corbyn, and others imbued their campaigns with a spirit of insurgency that succeeded in appealing to many otherwise turned off by politics, particularly among younger generations. Rather than sucking energy from the streets, these examples provided a renewed model of “class struggle elections” —not their own invention but one that had faded from the Left’s repertoire during the era of movementism.
Class struggle elections seek to deliberately leverage electoral campaigns, and political office itself, to bolster movements. They use every platform available to raise awareness of, and encourage solidarity with, labour and social struggles. In doing so they try to inculcate the understanding that radical policies can only be won with an inside-outside strategy, in which legislators are supported and pushed forward by powerful movements. At the same time they use campaigns as tools of organisation building.
They recruit and deploy a mass of activist to spread a socialist message, and simultaneously try to develop those activists by building political education into their activities. Done properly, this can bridge the gaps that supposedly separate movement from electoral organising, infusing the latter with a powerful sense of collectivity. That’s why so many thousands of young Americans (to pick a recent example), were politically activated through their involvement in the Sanders campaign, which became a gateway to organising in their workplaces, campuses and communities.
Note that this is completely different to the SRWP’s narrowly propagandistic approach to elections which didn’t promote social struggles so much as fantasies of revolution, whilst denouncing ‘bourgeois democracy’ as a sham and doing nothing to actually win. After a predictably disastrous outcome, the party chose to compound the embarrassment, and feed into a profoundly dangerous trend by denouncing South Africa’s independent election management body and claiming the result was rigged.
It’s not a failure of dialectical imagination that causes people to conflate politics with elections, but an appraisal of our situation that is more accurate than the one provided by the apostles of imminent revolution.
Contrast its subsequent marginalisation with the early trajectory with the Economic Freedom Fighters (now South Africa’s third-largest party), which leveraged the electoral know-how of its ex-ANCYL cadre and Malema’s media savvy to run an enormously successful first campaign. It then built on the success, steadily expanding its vote share each cycle, while using parliamentary office to bolster its national profile. Sadly it drifted off the orbit of the Left along the way. But the two diverging cases provide an obvious lesson: if elections are to be useful to us, we have to show that we are capable of succeeding in them. If we can’t, how on earth will we convince anyone that we’re capable of transforming society from its roots up?
None of this is to suggest that the concerns movementists raise about electoral politics are meritless. Its unquestionably true that electoral competition imposes its own logic, which can be ruinous if it totally subsumes the party’s strategic purview. We can trace the decline of many a worker’s party, at least proximately, to misguided efforts to capture middle-class votes by abandoning a politics of class antagonism. But all socialist strategising in our dismal conjuncture is the consideration of perilous alternatives. Far better for us to confront the dangers of succumbing to a narrow electoralism than the near certitude of permanent marginalisation should we choose to abstain from mainstream politics altogether.
The NUMSA moment may have come and gone. But the many elements of the broader conjuncture which produced it, and which seemed to augur a new direction for socialist politics, persist. The Alliance coalition is in the doldrums. Expecting its inevitable demise is of course a pastime of which we “independent leftists” should now be wary. But the material facts this time really are different. The state faces a fiscal crisis that President Cyril Ramaphosa has neither the wherewithal nor the institutional tools to escape from. His factional opponents preach a “radical economic transformation” that offers nothing whatsoever to workers.
Social strains look set to keep accumulating. But assuming that any crisis they produce will automatically redound to the Left’s benefit would be folly. That will only happen if we have the political vision and the organisational capacity to ensure that class becomes the fault line of social polarisation. And for that we need to face up to the challenge of constructing a new party.
Is a Plutocratic America in Terminal Decline?
We may not be aware of it yet, because of the hold the nation has on global media, but America’s decline appears to be terminal.
As President Joe Biden begins to get comfortable in the White House, there are those who might say that America, under a democratic system of government, has once again allowed the voice of her people to be heard, and that they have elected a new leader into office. Some might go so far as to say that the world’s most affluent democracy has once again proved that government of the people, by the people, for the people is alive and well.
But just below the surface, there are questions deserving of a deeper examination. One is how narrow the margins of victory were. For while it is true that President Biden won the highest number of votes in American electoral history, it is also true that President Trump won the second-highest number of votes in American electoral history; 10 million more people voted for President Trump in 2020 than did so in 2016. Mr Biden’s margin of victory in Georgia was 0.48 per cent, while that in Arizona was 0.63 per cent. Further, even as the Democrats belatedly won a majority in the Senate, again by the finest of margins, the Democratic majority in the House of Representatives actually narrowed. Why, if the choice was so clear, were margins so narrow?
The regrettable truth is that the US is not a democracy – not merely because true democracy has never existed, but because even that imperfect form of democracy that characterises modern politics long perished in America. The United States today is in fact a corporatocracy; mega-corporations rule the country, a polite way of saying that that nation is now a plutocracy. This development is not really new – wealth has always, eventually, determined leadership, in America and elsewhere.
This article attempts – colossally log-in-eye, and at a distance of thousands of miles, admittedly – to furnish proof of the existence of this plutocracy; to demonstrate the effects of this plutocracy on American life and politics; and to establish whether there is any way out of the present morass.
That America is a plutocracy
A total of US$14 billion (KSh1.4 trillion) was spent on campaigns in the US this year, twice as much as in 2016. Where is this money coming from?
In 2010, the US Supreme Court handed down a decision called Citizens United that allowed unions, corporations and associations to spend unlimited amounts in elections provided they would not coordinate their efforts with a candidate. As a result, political action committees (or PACs – private organisations established to raise money in support of a candidate or an issue) morphed into Super PACs that could receive unlimited amounts of money for campaign purposes. The effect was immediate: in 2012 non-party outside spending tripled 2008’s total and topped US$1 billion for the first time. Of that amount, Super PACs spent more than US$840 million.
The regrettable truth is that the US is not a democracy.
Yet the amounts spent in 2012 pale in comparison with spending during the 2020 campaign; in October 2020 alone, outside spending by super PACs and other big-money groups totalled nearly US$1.2 billion. President Joe Biden alone raised US$1.6 billion. President Trump raised US$596 million, itself a significant haul. Given the closely fought nature of the presidential election, it would not be wrong to conclude that money helped tip the scales in favour of the new president. Nor was this true only of the presidential race; it was true across the ballot. Eighty-nine per cent of House races and 71 per cent of Senate races were won by the better financed candidate. The conclusion is clear: money – corporate money – wins American elections.
The effects of the plutocracy on American life
It is all very well and good to conclude that corporate money runs and wins American elections. The issue is what the effect of all this money is on American life. If corporate hegemony is harmless – even beneficial – arguments can be made that it should be left alone. If it is not, however, then that fact should be exposed, and reform commenced.
The American mega-corporation has achieved a number of victories (from a corporate standpoint) that have constituted assaults on the wellbeing of the American people and populace. For example, these corporations have been allowed to outsource American manufacturing jobs to China and other nations. The iPhone, signature product of America’s second largest company by market valuation (Apple), is assembled in Shenzhen. Nike began outsourcing manufacturing in the 1970s; today it has plants in Vietnam and South Korea as well as China. IBM now has more workers in India than in the US. As of April 2012, Walmart’s supply chain included some 30,000 Chinese factories, producing an estimated 70 per cent of all of the goods it sells. This trend has gone on so long that there now exists a portion of the northeastern US, formerly known as the Manufacturing/Steel/Factory Belt, that is now known as the Rust Belt, owing to industrial and economic decline occasioned by outsourcing and the automation of jobs.
Meanwhile, for those jobs that have escaped being shipped overseas, the average wage has been stagnant for 40 years. A generation has now arisen in America that will be the first in modern American history to end up poorer than their parents. To make up for stagnant incomes, American citizens are drowning in private debt (US$14 trillion worth) including mortgages (US$9.44 trillion) and student loans (US$1.5 trillion). Indeed, absolute US household debt was higher in November 2019 than prior to/during the great recession, although the debt-to-income levels during the great recession were higher than the 2019 levels (83 per cent to 73 per cent). High house prices, supported as they are by mortgage lending, coupled with student loans, together mean that new graduates are experiencing “failure to launch”, i.e. the inability to leave one’s parents’ home and start one’s own family.
(We should pause here to note, parenthetically, that the level of any nation’s private debt, and America’s in particular, is a very important metric. The level of private debt was the key indicator that enabled Professor Steve Keen, one of the Bezemer 12, to predict the North Atlantic financial crisis of 2007-8, a prediction mainstream/neoclassical economics, quite criminally, failed to make.)
The US$14 trillion of private debt that American citizens owe is owed to the very same mega-corporation class whose wage stagnation has necessitated the need for lending (since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2 per cent per year). Most unfortunately, this wage stagnation is not uniform: the ratio of CEO-to-worker earnings has soared from 21-to-1 in 1965 to 320-to-1 in 2019.
A generation has now arisen in America that will be the first in modern American history to end up poorer than their parents.
Has the American mega-corporation been censured by the political class for these excesses? Hardly. In fact, the large American corporation, while using American infrastructure, using some degree of American labour and selling to Americans, is allowed to pretend that it operates outside America, by invoicing from nations with low tax rates, such as Ireland, thereby avoiding paying federal taxes on its income. From 2009-2018, for example, Amazon paid an effective federal tax rate of 3 per cent on profits totalling US$26.5 billion. In 2018 alone, the company received a tax relief of US$129 million dollars on profits of US$11.2 billion. Such is the scale of tax avoidance by American corporations that by 2016 a staggering US$2 trillion in untaxed corporate profits was stashed outside the US, according to the New York Times. (What makes this doubly lamentable is that the Internal Revenue Service tells the American citizen in unambiguous terms that “Your worldwide income is subject to U.S. income tax, regardless of where you reside.”)
Corporations, therefore, enjoy egregious advantages. It is in order to keep them that they are so willing to fund political campaigns. In other words, corporations will do everything to avoid paying the taxes that would improve American infrastructure and healthcare (to their own benefit) but spend billions on political campaigns to inoculate themselves from losing the unfair advantages they have carved out for themselves.
The effect of the plutocracy on American politics
The shock election of President Donald Trump in 2016 can be seen as a response to the deleterious effects of corporate hegemony on the American political and economic life. Candidate Trump campaigned as an outsider, promising to “drain the swamp”, even though, ironically, he was himself a self-styled billionaire who shipped jobs to China and paid very little in taxes. America was suffering economically. He claimed that the blame for this could be placed squarely on the shoulders of China and immigrants. In an illuminating two-part, three-and-a-half hour 2019 interview with PBS, key Trump campaign advisor Steve Bannon (who was arrested for fraud and then pardoned by President Trump on his last full day in office) stated that the cost of the 2008-09 bailout was loaded onto the American middle class, and that American gig economy millennials are nothing but 19th-century Russian serfs. Many may disagree with Mr Bannon’s political views, but his statement had its finger on the pulse of post-bank-bailout America. The genius of the Trump campaign was its ability to identify these pain points; to incorrectly but convincingly blame foreigners – locally (immigrants) and abroad (China) – for what were and continue to be the excesses of the plutocracy; to identify the existence of a swamp in Washington and characterise Hillary Clinton as the personification of these ills; and to ride that wave all the way to the White House. The lesson – a lesson seemingly yet unlearned by mainstream politics – is that it actually worked.
Candidates however, campaign in poetry; rulers, on the other hand, govern in prose. During Trump’s presidency Faustian bargains, in Steve Bannon’s words, were made; here again the power of the corporatocracy made itself felt. One of the early indicators of the direction and tenor a presidency will take is a president’s cabinet picks; Steven Mnuchin, yet another ex-Wall Street executive, was placed in charge of the Treasury. While President Trump did not drag the US into another war – in spite of the assassination of Iranian Major-General Qassim Soleimani – his presidency did not up-end Washington in ways meaningful to the nation’s citizenry. Readers may recall the US$2 trillion of untaxed corporate profits mentioned earlier; President Trump’s signature legislative achievement was to open new windows for tax rebates for major corporations, reducing taxes on the wealthy. This legislation resulted in the repatriation of US$777 billion in 2018, but the Federal Reserve noted that “the strongest effect of repatriation was on share buybacks” by corporate America. This particular episode is a textbook example of the plutocracy at work.
Trump does not greatly differ in this way from the way in which Candidate Obama contrasts with President Obama. Candidate Obama campaigned on Change We Can Believe In. Yet, once elected, he bailed out the banks (the abiding question on this, some wonder, is why citizens did not retain their houses if the banks’ losses were made good). Obamacare, a very significant advance in the fight for decent healthcare for Americans, did not include a public option although it could have. Nor did President Obama succeed in extricating himself from American warmongering abroad: in a particularly sad and tragic episode he helped end the Libya Gaddaffi had created. Libya under Gaddaffi was a nation that had free university education, free healthcare, no external debt and reserves of US$150 billion – all ideals that America, ironically, declares it wants but has yet to achieve despite its claim to being the richest nation in history. Allied “intervention” replaced that Libya with today’s bombed-out nation, in which incessant internecine strife went on for a decade. This in Africa, the land of Obama’s fathers. Only two years previously, at a location just two hours from Benghazi by air, the new President had given his “A New Beginning” speech in Cairo, which speech contributed to his winning the Nobel Peace Prize later that year.
In these two presidencies, we see, microcosmically, the effects of the plutocracy at work: the lofty ideals of the campaigning candidate and the searing needs of the masses, once office is assumed, are replaced by a kind of neutered, ineffective pragmatism, as far as the wellbeing of American citizens is concerned, and a sly and insidious effectiveness where corporate welfare is concerned.
The 2020 campaign
Perhaps the defining characteristic of the 2020 campaign is that it took place against the backdrop of a global pandemic. The cost of this pandemic – in the gruesome currency of American lives – has been more than 500,000 dead Americans and counting, nearly 10 times the number of US soldiers who died in the Vietnam War, and more than the number of American lives lost in World War II.
Uniquely among developed nations, the structure of America’s healthcare system is such that very often one only has healthcare if one is employed. So that when 44 million Americans filed for unemployment during the pandemic, they lost their medical cover at precisely the time they most needed it. The pandemic therefore threw into sharp focus the critical importance of having a healthcare system that is not based upon employment.
(Nor is the state of health insurance all that is wrong with American healthcare – in several tragic articles it has been reported that American diabetics have been driving to Canada in caravans to buy insulin – some driving up to 5 hours one way. Price-gouging by pharmaceutical companies means that the drug is ten times cheaper in Canada than it is in America.)
The bipartisan response to the pandemic was to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act that – while it gave individuals with less than US$99,000 a year annual income a check of US$1,200 a month – also gave further tax cuts to the wealthy. According to the nonpartisan Joint Committee on Taxation, just 43,000 individual tax filers covered by one of the Act’s provisions would see their tax liability fall by a combined US$70.3 billion in 2020 (or about US$1.7 million each). This is the America that corporatism has created.
And yet, mid-pandemic, was healthcare on the national ballot? How, when pharmaceutical and health product industries have spent a total of US$4.7 billion on lobbying the federal government, US$877 million on state candidates and committees, and US$414 million in the 20 years to 2018? Indeed, by the time he won the nomination, Joe Biden had already said he would veto a Medicare for All bill if it landed on his desk (a colossal if, it must be said), proposing a public option instead.
So what was on the ballot? Democrats, choosing to characterise Trump’s presidency as the problem, instead of seeing it as the natural consequence of the decades of wage stagnation, high healthcare costs, inordinately high levels of private debt, etc., campaigned on the platform of “restoring the soul of America”. The president’s narrow margins of victory perhaps find an explanation here: the problems Americans face were not really on the ballot. And they were not on the ballot because the corporations that stump up the money to fund electoral campaigns benefit from providing privatised solutions to the problems Americans face.
Is there hope?
There is an American constituency that is in broad agreement on the issues raised above: a Fox News exit poll, for example, showed that 72 per cent of Americans were at least somewhat in favour of changing to a government-run healthcare plan. Florida, a state President Trump won, voted to increase the state’s minimum wage to US$15 an hour.
However, it is unlikely that this broad constituency will be allowed to unite under the current political system. The reality is that the US is a de facto one-party state. If that party were to be honestly named, it might be named the Megacorp Party, or, slightly more genteelly, the Corporatist/Establishment Party. It has two wings: a supposedly left-leaning Democratic wing and a supposedly conservative Republican wing. Under the framework of Citizens United these two wings will continue to swap power ad infinitum. Yet, even as the presidency bounces from party to party, a president from one party will bomb Iraq; the next president, from the other party, will campaign on the platform that he never voted to go to war in Iraq, only to subsequently bomb Libya. These tragic contradictions find their resolution in the fact that this war activity happens at the behest of the military-industrial complex.
Political consultants will keep finding new, misleading ways of “framing the political argument,” creating false choices and developing narratives such as restoring the soul of the nation. Meanwhile, the money that pays them will continue to fortify itself against the needs of the people; the rich will get richer, the poor will get poorer and power will remain with the wealthy.
As long as this continues, we can expect two outcomes. The first is that the issues that Americans need solved will not be solved. (We are now reading, for example, that the US$15 dollars/hour minimum wage President Biden promised (during a presidential debate), is unlikely be included in the US$1.9 trillion-dollar stimulus package President Biden intends to bring to Congress.) The second is that, as a result of the failure to resolve these issues, America will, in the words of Robert Reich, continue to produce candidatures like Donald Trump’s as far as the eye can see. The American political system does not contain within itself the mechanism to correct the current malaise. As a result, money will continue to win out: it will continue to select which issues are on the ballot, and it will continue to choose which candidates win. America’s long decline, therefore, is likely to continue.
The corporations that stump up the money to fund electoral campaigns benefit from providing privatised solutions to the problems Americans face.
We may not be aware of it yet, because of the hold the nation has on global media (the concentration of media ownership in America is yet another triumph of the plutocracy), but America’s decline appears to be terminal.
I return to the beginning – this article is written colossally log-in-eye. As a Kenyan I know we have major, pressing domestic issues to resolve. If or as we make a detour to examine the American political situation, let our contemplation resemble our use of a mirror, and let our aims be those of helping us to avoid the problems others have experienced, in order to more wisely and speedily resolve our own.
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