Friday, October 31, 2008

Why I prefer pizza to bankers

Whenever there is a disaster, jokes start doing the rounds pretty quickly. Recently, I heard this one: What’s the difference between a pizza and a banker? A pizza can feed a family of four. Of course, the economic collapse is no laughing matter. But why then are some people poking fun at it? The answer is easy: there is a popular sentiment that the wealthy in society are oblivious to the poor and deserve their comeuppance.

As it stands, it appears that it is those with massive investments in the stock exchange that are taking the initial hit. Since the beginning of 2008, holdings in the US stock exchange have dropped from $20-trillion to $12-trillion. According to the Wall Street Journal, the average loss in stock exchanges across the globe is 40%. In other words, those who are feeling the pinch are the wealthy, at least for now.

The word on the street is that greedy investors have got what they deserve for years of excess and self-indulgence. It was largely bankers and those selling mortgages who wooed in cash-strapped borrowers, making a cut for bringing the financial institution business and essentially tying the borrower into a form of debt bondage for life. Everyone was so busy making money that nobody stopped to think about the consequences.

But the direct economic impact is only one aspect of the disaster that capitalist gluttony has left in its wake; the other part is psychological. The financial feeding frenzy of the last two decades has instilled a set of distorted beliefs. CEs who earn six-figure bonuses believe they are worth it and think that the wealth they create will somehow trickle down to the poor. Workers at the bottom of the financial food chain have started to believe it is their fault they are destitute.

Polly Toynbee and David Walker in the book Unjust Rewards demonstrate that the exact opposite is the case. Firstly, they show that where you are born is the biggest predictor of financial success. Class largely determines your chances of succeeding, not hard work as so many like to think. Secondly, they show that many top earners have no idea about how the majority live. Toynbee and Walker held focus groups with bankers and lawyers in the UK whose earnings are in the top 0,1%. They found that interviewees struggled to understand how people in the UK can live on under £40 000 a year when in fact 90% do. One of the interviewees thought his salary was average. He earns £200 000 a year.

Taking pleasure in the banking sector’s humiliation is, of course, short sighted. There is more to come. According to, in recent times, the average economic decline has lasted for 14,4 months. Further, the process might start with high stake losses on the stock exchange, but will eventually translate into the loss of working-class jobs as the whole economy slows down.

That said, the philosophy that unbridled capitalism is the only option to grow an economy has taken a major knock. One can also only hope that the crisis has left the banking sector humbled and more in touch with its limitations. The so-called financial banking giants of this world, The Guardian estimates, have needed $2-trillion to $4-trillion from the public purse around the globe to bail them out. They should be ashamed, repentant and embarrassed. But have lessons been learned?

Toynbee and Walker point out that the total salary packages of CEOs of the 30 biggest UK companies rose by a staggering 33% in 2007/8 as the reality of the crisis was hitting home. What is more, I have not heard one banker that oversaw this catastrophe apologise or thank taxpayers for the money. So what is the difference between a pizza and a banker? At least a pizza knows it is nothing more than fast food.

This article by Brandon Hamber was published on Polity and in the Engineering News on 31 October 2008 as part of the column "Look South". Copyright Brandon Hamber.

Friday, October 17, 2008

South Africa needs some loving

I admit I feel sorry for former President Thabo Mbeki. I know there are many out there who think he got what he deserved, but his summary dismissal smacked of retribution rather than mature democracy in action.

As I sat thousands of miles away listening to the news on internet radio one image came to mind: a ship of revenge-filled and rum-laden pirates forcing their former captain to walk the plank to jeers and applause.

This is not to say I am a die-hard Mbeki fan. As regular readers of this column will know I have criticised him on several matters. Then again I doubt I will be asking Jacob Zuma over for a cup of tea soon either. The way scandal follows him worries me, as well as his polarising politics.

Since when did South Africa start embracing the "you are either with us or against us" mentality of George Bush? These days it appears as if any remarks about the presidential brawl results in one being placed in the Mbeki or Zuma camp. How did South Africa come to this?

At the risk of reducing complex political shenanigans to the absurd, I see the furore, at least in part, as being linked to the politics of emotion.

It is a well-known story that when Thabo Mbeki met his father, the political stalwart and Robben-islander Govan Mbeki, after not seeing him for 28 years, the pair first shook hands and then briefly hugged calling each other comrades. When Govan was asked about what it was like to see Thabo he said: "Not much finer than seeing others. You must remember that Thabo Mbeki is no longer my son. He is my comrade".

At the risk of psychoanalysing the Mbekis, and notwithstanding decades of hardship, exile and harassment from the apartheid police that saw Thabo Mbeki's son and brother disappear, this incident speaks volumes. Mbeki was not a man prone to sentimentality and emotion, and this came through in his presidency.

On one level, he failed to deliver sufficient material progress, which was inevitable given the apartheid backlog. However, I also believe he did not demonstrate enough understanding and empathy. His continual denialism - whether about HIV/AIDS, Zimbabwe, crime, or the importance of reparations to TRC victims - painted the populace as unable to deal with difficult problems, thus disempowering them. He seemed to feel that he could think his way out the problems rather than lead his way through them with the people.

I believe that his pragmatic and enigmatic persona, whether his true self or not, was an anathema to the South African psyche. We are an emotional people. This is captured in the Toyi-toyi dance used at celebrations and funerals. Emotions and politics are integrally linked, embodied in all the cuddly stereotypes projected on to President Mandela. Against this backdrop it was inevitable that at some point the emotional void created by Mbeki at the top of the political ladder would become unbearable. The result was mutiny.

But now what?

Emotionally speaking, Jacob Zuma is a much better fit for South Africa. He is said to be an amiable, charming and compassionate person. But the court cases and his ruthless ability to dispose of political opponents is hardly appealing making him a difficult person to warm to politically. I think he is, at best, a quick fix, emotionally speaking.

The new South African President, Kgalema Motlanthe, is said to be smart, likeable and exudes a quiet charisma. However, he has risen to power in the most inauspicious of circumstances.

So the emotional vacuum created by Mbeki is still gaping, filled momentarily by a cathartic rage and some bloodletting, and an affable caretaker President. But I fear that more needs to be done for a nation that is, at least at the leadership level, in desperate need of a damned good hug.

This article by Brandon Hamber was published on Polity and in the Engineering News on 17 October 2008 as part of the column "Look South". Copyright Brandon Hamber.

Friday, October 3, 2008

A war on terror or a war on reason

India defies description, especially after you spend only a week there and in one city, Delhi. Delhi is a great city of the world, embodying dozens of cultures, old and new. The city survives on teeming markets selling anything from bananas to electronics and a modern financial sector that is expanding rapidly.

The Indian economy has been growing at an annual rate of 8% to 9% recently, the second-fastest expanding economy in the world, behind China.

However, when I first arrived in Delhi, the signs of this new economic giant were hard to spot. The airport was underdeveloped – OR Tambo International Airport, in Johannesburg, makes it look like a small regional airport time-warped in the 1960s. At first glance, the city looks like it is more in decay than development. Crumbling buildings, beggars and poorly kept streets with children in gutters and thousands of people peddling cheap small items is the norm.

However, as I acclimatised to the bustling capital, I started to see development everywhere. In the middle of a row of rundown buildings and behind people, cars, animals and bicycles are upmarket clothes stores, software companies and international banks. Once you start to head out of the city, it becomes even more evident: new shopping malls, office blocks and modern apartments for sale. This is a country on the move, although still with a massive underclass.

Billboards advertise "the lifestyle you want", complete with pictures of compact apartments, swimming pools, fully equipped with 'German kitchens' and a photo of a smiling family, which invariably includes daddy, mommy, son and daughter. The influence of the West is pervasive and growing.

However, it is not only the Western lifestyles that is being imported. Ethnic strife, marked by what George W Bush would call the 'war on terror', is also notably present in India.

This was made all too real on the last night of my stay, when a series of five bombs exploded across Delhi, killing 25 people and injuring over 100. Two of the bombs went off fairly close to my hotel. I had eaten in the bombed district and driven through the area numerous times. The attacks were claimed by a group called the Indian Mujahideen, which is said to be linked to al-Qa'ida.

Immediately following the blasts, eerily familiar debates began playing themselves out on television. Was the government tough enough on radicals, asked the media. And the word 'terrorism' was thrown about by the Indian government in a way reminiscent of a US Republican convention or Sunday lunch on the Bush ranch.

Of course, the bombs in Delhi are acts of terror. Blowing up innocent people is immoral. But is it helpful to lump every act of terror in the same boat? Those setting off the bombs and world governments are equally guilty in that.

It is comfortable for governments to frame all extreme acts of violence as being about the war on terror. Such language justifies tough military action and tighter police control, while often diverting attention from other problems, such as poverty, structural discrimination and long histories of political tension. Governments seem to take perverse pleasure in being part of the global 'war on terror' club.

The alleged perpetrators also like to oversimplify matters. In an email from the Indian Mujahideen, the bombs are said to be a response to the "hostile hatred" of Islam and justified punishment for the "sins" of the people.

But when did global politics and political ideology become so simple?

Bush wants us to believe that there is only one war, and the bombers that there is only one justifiable struggle.

The rise of the totalising discourse is of great concern. Surely, it denies complex local politics, individual power struggles and massive cultural variations in how the so-called war on terror plays itself out. Painting everything with the same brush is not only lazy, anti-explanatory and culturally vacuous, but dangerous.

This article by Brandon Hamber was published on Polity and in the Engineering News on 3 October 2008 as part of the column "Look South". Copyright Brandon Hamber.