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The traditional Marxist view of the State under capitalism saw its role as protecting and furthering the interests of Capital as personified by the capitalist class, whether private owners or managers
of Capital on behalf of the shareholders of the joint stock companies. The rise of the labor movement and allied social movements represented a challenge to the capitalist state which was resolved less through revolution and more through an evolution of State policy.
The triumph of neo-liberalism in the 1980s was as much a return to a Capital-dominated State as it was a break with Keynesian economic policy. Indeed the two phenomena went hand in hand. It is no accident that during this period the world witnessed the decline of the Trade Unions movement, a shift in the share of national income from wages to profits, and the effective co-option to neo-liberalism of political forces which traditionally supported Keynesian economic policy, namely Trade Unions and other social movements, a restraint on profits and a fiscal policy that supported re-distribution and collective social welfare systems.
The accompanying rise of finance since the liberalizations of the ‘industry’ sector in the 1980s, especially in the US and UK, together with the resurgence of the military-industrial complex has led to what Peter Scott in his 2007 book entitled “The Road to 9/11, Wealth, Empire and the Future of America” has called the ‘petroleum-industrial financial complex’, dominated by a ‘military-financial’ complex’. These more sinister characterizations of the State, because of their very nature, are of course much harder to document, let alone control. But the sense of a power beyond the civil state is very strong and has for some time even been part of the political and crime thriller diet dramatized in the cinemas and on the televisions.
The web of connectivity between the coercive and security arm of the State and the commercial interests of companies connected with the military-financial industrial complex, and the critical mineral supply chain that feeds it, requires the shadier activity of the ‘deep state’ to prevent any disruption to this web. For African countries, this is a far cry from the expectations of the State at Independence. Then, the State was charged with the task of actively promoting economic and social development.
The absence of a classic bourgeoisie, accumulating capital and investing, especially in manufacturing, meant that the State would have to fill the gap using its power to tax to accumulate investible resources either on its own or in cooperation with foreign capital, which could bring advanced technologies with it. However, the new governments were ill-equipped to pursue this strategy.
So steep was Africa’s economic decline during the 1980s that it became known as he lost decade”. In one country after another, living standards plummeted. By the mid 1980s most African was as poor as or poorer than they had been at the time of independence. Crippled by debt, mismanagement and collapse in tax revenues, African governments could no longer afford to maintain proper public services.
Accountability in these circumstances was limited. Elections in what were mostly one-party states were not going to result in the overthrow of the government. Military coups with the ostensible purpose of getting rid of corrupt politicians simply replaced them with corrupt generals. The separations of powers which in theory made the executive arm of the State accountable to the legislature and both to the judiciary was seriously compromised by the connections through ethnic and other networks between these theoretically separate powers.
The mechanisms of accountability as they had evolved in the developed economies included an independent Trade Union movement, judiciary, press and usually broadcasting network. However in newly independent Africa, these were scarcely present. Not being able to hold politicians and state officials to account, taken together with the possibilities for rent-seeking by such individuals, led to the State becoming a vehicle for private accumulation, and not for the private investment that might have led to domestic capital accumulation and development.
Rather the ill-gotten gains of the elite flowed out of the country to private accumulation in Swiss banks and more recently in the myriad of tax havens popping up around the world, leading to levels of conspicuous consumption that became quite breath-taking. It didn’t take long for conspicuous consumption to become an issue in Kwame Nkrumah’s government, nor for General Mobutu to squirrel away $250 million a year from the revenues of the nationalized mining company in Katanga. President Kwame Nkrumah, the man who is still regarded by many as one of the founding fathers of united Africa, was in fact famous for mismanagement during his tenure as the first president of post independence Ghana.
In addition to his misguided economic policies, government funds were squandered in every direction. President Kwame Nkrumah didn’t know how much his government’s external debt soared because complete records of government contracts were not kept in government files. He was often awarded government contracts personally, without reference to the cabinet, the appropriate minister, or the cabinet’s contracts committee. Short of foreign funds, Nkrumah pressed ahead by resorting more and more to using suppliers’ credits. In effect, he was mortgaging Ghana’s revenues for years ahead.
In 1961, Nkrumah promised to tackle the problem of corruption. He denounced party members who combined business interests with a political career. To this effect, he was appointed a committee of inquiry to investigate the assets a property of party members – their houses, cars and mistresses. And he gave the guilty a stark alternative – either to resign or to surrender their loot. Despite all this, however, the report of the inquiry committee revealed that the “Guinea Press”, a company owned by President Nkrumah himself received more than £1.8 Million from government sources. In this respect, the former Nigerian dictator, General, Sani Abacha was extremely notorious. During his four years as military ruler of Nigeria, he expropriated $5 billion. In other words, he managed to loot $3, 424, 657, every day from the coffers of the Nigerian Treasury.
It became commonplace in some countries for poorly paid public servants at levels lower down the civil service to make ends meet by levying bribes on ordinary citizens wanting to get the services they required and to which they were in theory entitled. Corruption enquiries and anti-corruption measures quite often attacked these kind of activities occurring at the middle and lower levels of public service provision while avoiding confronting those of the more economically powerful, thus again emphasizing the importance of dealing with the issue of power and its control; rather than with corruption as one of the outcomes of such power.
In any event the idea of using State resources as a basis for private accumulation became well entrenched through its various organs. The adoption by most countries of democratic accountability through multi-party elections as part of the neo-liberal projects was based on the assumption that electoral competition would work in much the same way as economic competition was supposed to work in ‘free’ markets. But just as competition in markets has led to monopoly and oligopoly, so competition in the political sphere has more often than not simply affirmed the effective monopoly of power of a permanently dominant party or in cases where there are two parties with roughly equal strength, a duopoly which becomes a coalition.
While there have been some changes of governing party, and many countries limiting presidential terms, there are still many cases of dominant party monopolies, and even where power changes hands one section of the elite is substituted by another. Here, the Ethiopian People Revolutionary Democratic Front (EPRDF), Ethiopia’s ruling party formed by the coalition of four ethnically based political parties, can rightly be sited as the case in point. Since its advent of power in May 1991, the EPRDF is the most dominant and powerful economic power in the country.
Structures of political patronage and clientelism ensure that as long as resources are channeled to a significantly large proportion of the electorate, victory is guaranteed and old ethnic loyalties maintained. Struggles then follow inside the winning parties to gain control over State resources. The neo-liberal policies of privatization and public private partnerships have provided opportunities for the accumulation of wealth by private individuals, especially those who have held positions in government administration. Inequality has grown. Half the population of the African continent is living on less than US$1.25 a day. In 2012, the African Development Bank reported that the top 4.8% of the population, termed the ‘rich class’, receiving more than US$20 a day have 18.8% of the income, while an ‘upper middle class’ comprising the next 4.7% of the population receiving between US$10 and US$20 a day have 10.8% of total income.
Within the rich group there are the ‘super-rich’ with incomes in the hundreds of thousands to millions of dollars a year and with an accumulated individual wealth of over US$30 million. It has been reported in 2012 that, Africa had an increase of 5.1% in its super-rich to 2,535 people, who held a combined wealth of US$329 billion. Much of the growth in this wealth is derived from the mineral boom of the last few years, but some of it originates in a different kind of mining of the resources of the State.
The most recent reported example concerns Zimbabwe. At the end of January 2013 Zimbabwe Finance Minister Tendai Biti reported that there remained US$217 in Zimbabwe’s public account balance after paying its workers’ salaries. This despite Zimbabwe’s diamond wealth of which little is getting to the Treasury, it is alleged that US$ 2 billion has been diverted away from Treasury coffers and has instead enriched politicians, especially the Minister of Mines, and others connected with the management of the industry.11 Porsche has a sales centre in Luanda because, with Angola’s double digit growth rate based on its oil and other mineral wealth, there are many super rich customers for this prestige car, retailing at $170,000.