Poverty and Progressive Politics
By Thabo Mbeki
10 July, 2003
people throughout the world recognise the fact that global poverty constitutes
the deepest and most dangerous structural fault in the contemporary
world economy and global human society. Recognition of this fact is
not an exclusive preserve of progressive politics. All thinking people
throughout the world agree that the elimination of this structural fault
requires sustained economic growth and development in the areas of the
world defined by poverty.
These thinking people agree that various macro-conditions have to be
met to create the possibility for such sustained and adequate economic
growth and development to take place.
to such matters as democracy, good governance, rule of law, property
rights, contract law, etc. They also relate to macro-economic policy
and practice, including such matters as fiscal and monetary policies,
the labour market, international trade policies, policy predictability,
and so on.
There would also be general
agreement that the first driver of the growth and development process
is capital investment. Without new capital formation, there can be no
growth and development. Further, all these thinking people would agree
that in contemporary society, the capital needed for this growth and
development is privately owned, and that the publicly owned fraction
of capital is but a tiny proportion of the stupendous volumes of capital
in the global economy.
The general agreement about
the necessary macro-conditions therefore relates to the agreed specific
requirement that the appropriate climate should be created to encourage
the private owners of capital to put this capital into the areas where
such macro-conditions exist, especially the poor countries.
Immanent within this, is
the recognition and acceptance of the fact that in its functioning and
reproduction, capital, as distinct from capitalists, is not informed
by any sense of social responsibility. It has no soul. Money and its
multiplication constitute its motive power.
No thinking person would
therefore contest the view advanced by political economy from its foundation,
that profit maximisation is a necessary condition for the existence
of capital. Without this, capital dies and humanity perishes.
The universally accepted
proposition that the necessary macro-conditions should exist, to ensure
that new capital formation takes place, is therefore an admission that
the possibility has to be created everywhere, for capital to make such
profits as it would consider acceptable to itself.
Again, none of the foregoing
is a peculiar feature of progressive politics. What has happened is
that market economics has acquired the character of a universal
and self-evident truth. The objective reason for this is the recognition
by the human universe that capital, the first driver of the process
of economic growth, development, and the generation of the means to
ensure human survival, is privately owned. In this condition, capital,
the market, has its own innate logic, its own objective
process of development, which is independent of human consciousness.
In this sense, capital dictates
the rules that human society sets itself, to ensure that capital is
able to reproduce itself. This is the reason for the universal victory
of the neo- liberal/conservative economic paradigm.
Human beings have consciously observed, studied and theorised about
the regularities of the functioning of capital for more than two centuries.
This gave birth to the academic discipline of the political economy
or, more narrowly, economics. In essence, the practitioners within this
discipline have sought to interpret and predict the behaviour of capital
as an objective, material factor in the evolution of human society,
as opposed to those factors that are subjective and spiritual. In the
process, they have elaborated a body of knowledge ,two of
whose features are assertions about the predictability of the behaviour
of capital, and its tendency towards equilibrium . According
to the theoretical construct that asserts this tendency, it is possible
to determine what capital would do given specified conditions. Further,
this capacity to predict is based on the philosophically correct proposition
that to arrive at the unknown, logic demands that one must start from
the known. In this instance, the known is that the life
imperative of capital is profit maximisation.
The rest of the architecture
of the equilibrium thesis consists essentially of an attempt to predict
the behaviour of capital in any situation of a changing balance in the
variables that dictate its decisions. Theoretically, such predictions
would be right or wrong depending on whether political economy/economics
has properly captured all the relevant variables, and correctly interpreted
the outcome of their dynamic action and interaction. Because, in principle,
sufficiently complete knowledge of the variables is achievable,
it becomes possible to elaborate sets of rules/predictions about the
behaviour of capital, which are, in reality, rules about how human society
should respond to the dictates of capital.
This brings us back to the
first proposition we made that global poverty constitutes the
most challenging structural fault in the contemporary world economy
and global human society. Logically, this means that the correction
of this fault has to be at the centre of the politics, policies and
programmes of progressive politics.
Progressive politics must
therefore answer the question what is to be done?
It is in the provision of
answers to this question that progressive politics would break ranks
with the neo- liberal/conservative paradigm, and thus determine what
is unique about itself.
This paradigm represents
the political (subjective)expression of the rules and regularities of
the market . Consistent with the logic of the market, it
correctly emphasises the private ,as opposed to the public
,the individual, as opposed to the collective, the individual
versus the state. Thus society becomes an agglomeration of atomised
individuals, connected to one another only by the reality that to achieve
their individual and competing objectives, they have to interact with
one another as such competing individuals. Necessarily and perfectly
understandably, it accepts the reality of private ownership of capital
and the private acquisition of the gain from the reproduction of capital,
by its owners, understanding that each owner succeeds only to the extent
that he or she is not overwhelmed by his or her competitors. Even countries
have the responsibility to aim for and achieve international competitiveness.
It then transposes this into a proposition about the imperative for
society as a whole to organise itself such that each individual lives
only for personal gain and fulfilment, on the basis of the principle
inherent in the operation of capital and the market , of
each for himself or herself, and the devil take the hindmost. Thus the
market becomes the great leveller, the cold, dispassionate and
undiscriminating instrument for the achievement of the goal of human
equality, giving an equal possibility to all to succeed or fail. The
neo -liberal/conservative political ideology therefore proposes, logically,
that to achieve this democratic goal of egalité , the market
must be given free reign to operate as it will.
This endows capital, free enterprise, with the imminent
capacity to produce the greatest good, both in politics and in the economy,
creating the optimal, humanly possible result, with regard both to the
political rights and the economic welfare of the individual. And so
it becomes possible to proclaim the edict woe unto all those
who oppose and act in contradiction of this eternal truth!
To be itself, and have any
real meaning, progressive politics has to make the determination that
it disagrees with these propositions. It must disagree with the assertion
both about a market tendency towards equilibrium, as a beneficial quantum,
and the objective regularity within this market to deliver the greatest
Fortunately, there is sufficient
empirical information to substantiate these conclusions. The neo-liberals
and conservatives would contest, fiercely and vigorously, any statement
of these conclusions by prominent representatives of progressive politics.
They would respond in this manner because they consider any proposal
to intervene in the market, against its natural rules, as
a punishable act of heresy.
Capital would join them in
this war, through the involvement in this struggle of the individual
owners of capital, who are the earthly personification of capital, as
Christ was of the Creator.
In his novel Hard Times ,Charles
Dickens warned about the dangers of interfering with the market
.He wrote: Surely there never was such fragile china-ware
as that of which the millers of Coketown were made. Handle them never
so lightly, and they fell to pieces with such ease that you might suspect
them of having been flawed before. They were ruined, when they were
required to send labouring children to school; they were ruined when
inspectors were appointed to look into their works; they were ruined,when
such inspectors considered itdoubtful whether they were justified in
chopping up their people with their machinery; they were utterly undone,
when it was hinted that perhaps they need not always make quite so much
Whenever a Coketowner felt he was ill-used that is
to say, whenever he was not entirely left alone, and it was proposed
to hold him accountable for the consequences of any of his acts
he was sure to come out with the awful menace, that he would sooner
pitch his property into the Atlantic .This had terrified the Home
Secretary within an inch of his life, on several occasions.
A century-and-a-half after
the publication of Hard Times ,the whole world, and especially the poor,
is as petrified out of its native wits, for fear of losing the favors
and residence of the property of the millers ,as were the
British Home Secretaries.
To ensure that nobody does
this, the injunction is issued that all and sundry must abide by the
rules of liberalisation, deregulation, privatisation, absolute protection
of private property rights, and all else that would not give cause to
the owners of productive property to issue and carry out the threat
to pitch their property into the Atlantic, or, in the globalization
era, move it to another, less intrusive and threatening location.
If progressive politics decides
to challenge this injunction, it has to be made of much sterner stuff
than the British Home Secretaries of Charles Dickens days. Do
the progressive politicians have the necessary courage?
They need it because they
have to present the reality, boldly and frankly, that it is impossible
to solve the problem of global poverty solely through reliance on the
Simply put, the poor do not
present themselves as an appropriate object of attention by capital,
whose inner logic is the maximisation of profit.
Billions across the world,
including Africa, are too poor and underdeveloped to achieve full and
beneficial integration into the global market, even if they succeed
in creating the macro-conditions supposedly attractive to capital.
These are billions of people
who, in other circumstances, are described as unbankable
.Something else, in addition to self-beautification, and outside the
possibilities of the market ,must happen, to make these
poor multitudes bankable .
Happily for progressive politics,
the European Union (EU)has found the practical answer to this challenge.
And the EU response makes the direct statement that, with regard to
poor areas, it is irrational and unreasonable to expect the market
to prepare the material, market conditions it needs, that would
enable it to come to such areas, as attractive investment target areas.
To ensure the very cohesion
and survival of the Union, the EU had to ensure the advancement of the
most underdeveloped and poorest areas within the Union. Accordingly
it set up a comprehensive system of structural funds .These
are for the specific purpose of transforming regions among the EU member
states that, because of their levels of poverty, cannot easily come
into the market system ,ensuring access to private capital.
The necessary programmes
are being implemented, based on the correct proposition that some regions
within the EU are too poor to be expected to depend on private capital
for their development. What has to be done is that public capital has
first to be invested in these regions, to prepare them for the possibility
of being attractive to private capital. This has led to the establishment
and use of EU public sector structural funds .
Reporting on an interview
it conducted with the Portuguese Foreign Minister, Antonio Martins da
Cruz, the Financial Times of 21st October 2002,wrote: Portugal
s most difficult political and diplomatic battle of the decade
will begin in earnest in 2004,says António Martins da Cruz
is when formal negotiations start on the next six-year package of European
Union funds. The principle of economic and social cohesion between
member states must be upheld as the community expands from 15 to 25
countries, he says.(Despite this),the EU has to do everything
possible to maintain the flow of funds to Portugal. They are essential
for our development. EU structural funds, amounting
to more than EUR3bn a year, have played a crucial role in the modernisation
of Portugal. They have helped lift GDP per capita from 53 per cent of
the EU average to 74 per cent since Portugal joined the community in
Africa is much less developed
than Portugal. She has greater need of the official, non-private sector
capital that the Minister correctly assessed as being essential for
the development of Portugal.
However, Africa s development
partners tell her that for her own development, she must depend almost
exclusively on private sector capital. Little else is being done to
assist the process of her beautification, with significant inflows of
public capital from the partner countries that have unimaginable volumes
of capital, both public and private.
To add insult to injury,
she is also expected to service the debt she owes to these countries,
exporting capital she does not have, compete with their heavily subsidised
agricultural products, absorb continuously adverse terms of trade, finance
the achievement of standards of behaviour set by capital,
with money she does not have, negotiate with these countries complex
agreements without any capacity to negotiate, and so on.
What Africa and the poor
of the world say to their development partners is do with and
for us, what you do with and for yourselves. If Portugal and other regions
within the EU need structural funds ,as they do, how shall
the similar and far greater need of Africa and other countries of the
South be met?
If this question is not answered
honestly and practically, the structural fault in the world economy
and human society will grow ever wider, with incalculable consequences
for all humanity. Only, and only, a vigorous, sustained and successful
intervention by the school of progressive politics will save humanity
from the impending catastrophe. This is the central challenge confronting
the global progressive movement today.
The progressive politicians
of our time will have to demonstrate whether they have the courage practically
to define themselves as progressive, recovering their historic character
as true champions of the poor, and break the icy ideological grip of
the skinny hand of rightwing politics, in the interests of the poor
of the world.
The billions of African and
world masses are watching and waiting, including those in the developed
world, hoping and praying that a progressive agenda will emerge as the
defining feature of the process of globalisation. Nobody knows how long
they will watch and wait.
Thabo Mbeki is the President
of the Republic of South Africa.