Excuses and Thoughts

Ole Spearpoint had been hoping to be a little more productive last month but certain things conspired against that intention.

The worst was a recurrence of malaria (originally picked up in Zambia some few years ago). This usually happens once a year and ordinarily involves a couple of days of sweating, shivering and general malaise.

Not this time. Holy cow! Over four weeks of bone-aching sweats, alternating with teeth-rattling and limb-quivering shivering attacks lasting for an hour or more, the worst nausea I have ever experienced, deep and bloody vomiting, and unpredictable ‘dire rear’ (read Terry Pratchett’s excellent, superb and unrivalled “Discworld” novels if you don’t understand the reference).

Poor Spearpoint really thought that he was about to cash in his chips at one point. You know the feeling – you start off worrying that you’re going to die, eventually worrying that you won’t die…

And although there has been the benefit of having lost at least five kilos (about 10 pounds to my American friends), thereby helping to partially alleviate my old man’s silhouette of distended gut, skinny shanks and drooping butt, there has been a major drawback in the old lifestyle department. The Spearpoint hepatic function suffered such punishment as to preclude, for the time being at least, the delights of dipsomania and the various benefits to be had from booze. My Colt .44 Magnum is, consequently, looking more attractive every day…

So, I was pretty crook, for a while.

But during this interesting period in my life (involving frequent conversations with God over the big white telephone), the rest of the world moved on without me.

Now I confess to being pretty pleased that Barack Obama won his Presidential campaign in America (congratulations, Sir), but I am equally pissed off that, once the more exciting elements of that campaign and its aftermath had died away, my buddies at Botswana Television (BTV) then decided to return to their more usual dull-as-ditchwater programming – the buggers have stopped (well, severely curtailed) their late night feed of MSNBC. Couple this with the end of American daylight savings time and the push back by one hour of those stimulating and addictive programmes and you can well imagine the negative effects on Spearpoint without his near daily doses of Olbermann, Matthews and Maddow.

Rx Colt beckons.

I have also been pleasantly surprised at some recent events on the political landscape here in South Africa.

Following on from some pretty disgusting behaviour on the part of the old ANC, some of its members and leading lights have jumped ship and formed a breakaway political party which, after some buggering around, seems to have settled on the name ‘Congress of the People’ (COPe).

The ANC has been, predictably, miffed and, whilst ostensibly appearing unfazed and tolerant of the new party, has been doing everything possible behind the scenes to disrupt, intimidate and ridicule the formation and function of the new boys on the block.

The formation of the new party can only be good for our democracy in South Africa. Personally, I wouldn’t vote for them since they are merely re-invented ANC cadres and whilst I am prepared to credit the ANC with much good that it has done since 1994 I cannot escape the sure knowledge that the ANC and its leadership has, overall, done more harm than not; if the leadership and new membership of COPe were so out of step with the ANC then why didn’t they decamp long ago?

However, Spearpoint wishes COPe well – if only to bring about a re-evaluation of the ANC and what it has achieved and, especially, if it results in a split of the previous ANC popular vote leading to the loss of the ANC’s two-thirds majority (permitting unilateral constitutional change) in parliament. Perhaps for the first time in South Africa’s history there is a real prospect of an Opposition strong enough to challenge the ruling party and to ensure accountability.

Have a look at the link below. The sentiments and reasoning are thought-provoking and valid.

http://www.iol.co.za/index.php?set_id=1&click_id=79&art_id=vn20081118053203503C766418&newslett=1&em=186722a6a20081201ah

The danger now, of course, is that the leadership of COPe, being ex-ANC and fellow gravy train travelers, will fall into their old ways of complacency and incompetence, thereby failing to offer anything new or radical enough to move this country forward – other than in splitting the ANC vote (in and of itself a substantial and sufficient step to the good).

We shall see.

Spearpoint.

1^st December 2008

African Statesmanship

The recent death of Zambia’s President Levy Mwanawasa is a tragedy for not only Zambia but also for the entire African continent.

My understanding is that Zambia has prematurely lost a leader of exceptional calibre who was striving to make a genuine difference to the lives of Zambians, particularly in his determined fight against corruption.

Almost uniquely amongst world leaders, Mwanawasa publicly confronted and then prosecuted his predecessor Frederick Chiluba for corruption and fraud. Mwanawasa’s decision to do so cannot have been easy. Chiluba had, after all, been the one to groom and present Mwanawasa as his successor and there must have been some considerable pressure from within the ruling party not to rock the boat (thereby spilling the cash) and to spare Chiluba public humiliation – to say nothing of Chiluba’s underlings, hangers-on, presumed beneficiaries and possible co-conspirators.

Instead, Levy Mwanawasa chose to be a statesman, deciding – as far as possible in a political environment – to honour his promises to the electorate by adhering to the principles (oft-repeated but rarely practiced by the power hungry) of his country’s Constitution. In so doing he appears to have honoured himself and his country, as well as having set a worthy example to his constituency.

Although Spearpoint never had the opportunity to meet and know Levy Mwanawasa personally, the hope is that Zambia will allow Spearpoint to join (albeit remotely) in their mourning as a fellow African.

For the demise of Zambia’s Mwanawasa is a loss not only for Zambia but is also a loss for the whole of Africa – especially southern Africa.

As at home, Mwanawasa displayed the courage to stand up and be counted in the face of the prevailing antipathy in the southern African region towards corruption, fraud and dictatorship in the form of Robert Mugabe’s tyrannical and outright criminal regime in Zimbabwe.

With the tacit support of Ian Khama, the President of Botswana, Mwanawasa alone named and shamed Mugabe for what he is, what he represents and what he perpetrates against his own country and people.

In so doing Mwanawasa also implicitly named and shamed all those other African leaders who, despite mounting and convincing evidence, have given Mugabe political support and sustenance either directly and openly or through their failure to criticise and isolate Zimbabwe for its current policies and situation.

Principal amongst these has been South Africa’s Thabo Mbeki and his ANC government.

Appointed by SADC to mediate in the Zimbabwe crisis, Mbeki has epitomized the approach of many other African leaders: don’t rock the boat; don’t embarrass Mugabe; don’t expose Mugabe; don’t fracture the façade of imagined African so-called solidarity; don’t further reinforce the global perception of Africa’s inability to identify, address and remedy its own problems, including those of poverty, corruption, crime, ignorance and indolence.

Notwithstanding recent critical comments from Jacob Zuma (as President of the ANC) regarding Zimbabwe, the fact remains that South Africa continues to pussyfoot around the person of Mugabe and the crisis in Zimbabwe and refuses – publicly, at least – to acknowledge that a problem exists. In Mbeki’s own words on the subject, “There is no crisis”. Sentiments echoed by the Minister and the Deputy Minister of Foreign Affairs.

The ANC must be living in gaga land.

It’s obviously not a crisis when a neighbour of South Africa destroys its economy (inflation admitted by the Zimbabwean government just this month to be running at not less than eleven million percent – that’s eleven followed by six zeroes, folks), and driving no less than four million of its own citizens into South Africa – mostly illegally – to escape starvation and political persecution (and who knows how many into other neighbouring countries).

And how can it be a crisis when even the great ANC, champion of the art of rule by smoke and mirrors, has been appointed (in the person of Thabo Mbeki) by SADC to mediate between Mugabe and the Zimbabwean Opposition.

Yet the appointment of a mediator implies conflict, dispute and actual or potential crisis. That much SADC has got right; where it went wrong was appointing Mbeki and his team as mediators. Not only do the mediators deny the existence of a situation which they have consciously agreed to fix, but they are unsuited and unqualified to carry out such a role since they have consistently and laughably maintained for many years now that within their own borders there are no crises in law enforcement, the judicial system, education, HIV, AIDS, TB and other health matters, housing, and so on.

SADC erred in appointing the ANC and Mbeki. It is patently clear that these guys couldn’t organise an orgy in a brothel, given their record of domestic service delivery and good governance.

The mediation between the parties in Zimbabwe has stalled. Naught has been achieved. Mugabe continues to do as he pleases – even to the extent of re-convening Zimbabwe’s parliament (which, according to Zimbabwe’s Constitution, should have occurred months ago) before there is any clarity and agreement on how power division and sharing will prevail in the new government.

Now, doesn’t that just speak volumes on the dedication and abilities of the so-called mediators?

Excepting Zambia and Botswana, no-one in SADC has had the courage to slap Mugabe silly and to tell him to stop behaving like a spoiled brat and to stop embarrassing all of Africa with his puerile behaviour. Mugabe’s arrogance and assumed impunity – watch his disjointed marionette-like swagger in public – has never been challenged by South Africa and its continental cronies.

Indeed, South Africa has shown great concern over Mugabe’s dignity and has been keen to protect that dubious quality. But at what price? Where is the dignity of those Zimbabweans, forever on the cusp of eviction, arrest and starvation, free-falling into the black hole of faster-than-light inflation who have had to separate from their families and homes in order to cross the borders of neighbours looking for some means of sustenance and to live in the additional and constant fear of deportation as illegal immigrants? Where, in South Africa, is the dignity for those South Africans already suffering under the laissez-faire incompetencies of the ANC dictatorship who now have to make room in already overcrowded cities, townships and squatter camps for swarms of desperate immigrants who also want a share of what is clearly an inadequate, mismanaged and ill-divided political and economic cake?

Does the ANC have no shame? Is it not ashamed that it continues its rhetoric and spin doctoring even though it clearly cannot do its job – either at home or around the table in Harare? Just what are the criteria against which it measures itself and which, obviously, allow it in its collective politburo mind to continue its rule?

Of course, shame and admission of error are not matters for easy admission by any politician even in the normal course of events, much less at any other time. Such is the nature of the beast. (Also, incidentally, such is the nature of those that look for and permit the politicians to rule; populations and electorates tend to be lazy in thinking for themselves and constantly seek the comfort of having someone else do their thinking for them. A contradiction of the human condition is that, of all the creatures on the planet, humans have the greatest ability to deal with change, challenge and chance yet are the most persistent in their – often unconscious and unspoken – drive for certainty and comfort.)

Admission of error in Africa is very difficult. Culturally the strong man must be seen to be strong, even if – especially if – wrong. The advent of colonial rule, with all the embarrassments that that brought, together with the displays of power and material goods by the colonial powers, then provided the need to display to the world that Africa and Africans could achieve the same themselves without outside intervention.

The loss of face when African nations screw things up is immense – far more so than the purported Oriental perceptions of face. This is why, for example, racism and colonialism are frequently used as catchphrases to divert attention away from the true reasons for African failure.

Mugabe blames the racism and imperialism of Britain and America for his devastation of the Zimbabwean economy and social structure. Mbeki and many of his colleagues blame racism in South Africa for the failure of many of the ANC’s policies and programmes. It is far less embarrassing and far easier to fix the blame rather than the problem – particularly where personal political careers and ambitions might be at stake. It’s an African pastime; it didn’t rain enough; it rained too much; we don’t have enough money; foreigners are taking our women and jobs; the Whites don’t share; the British conspire against our sovereignty; the Chinese steal our resources; the Indians are lazy and greedy; the Zulus cannot be trusted and steal everything not nailed down; the World Food Programme gave our starving people the wrong food; it goes on and on.

Spearpoint is not suggesting that there are not grains of truth and reality in some or all of the above excuses. But that is what they are – excuses. Fourteen years after shouldering aside the burdens of apartheid the ANC and its stalwarts still glibly trot out racism, colonialism and imperialism as reasons behind its failures in almost every arena of life in South Africa. They fail to see that history is history; it is past and passé. History is a guide for and to the future, not a Balkan-type motivation for perpetuating old horrors as justification for interminable inefficiencies and inadequacies.

Unfortunately, it is in the past that the ANC finds itself mired. Starting its existence as a protest and liberation movement the ANC has been unable to shrug off that mindset. Fourteen years into government the ANC is trapped in a time-warp, still slavishly employing the same slogans, gestures and thought patterns of its Communist Party origins and history dating back to the October Revolution and the Long March when those who were not for the movement were targetted as enemies and to be treated accordingly. Defunct ideology and the mindless mouthing of Cold War rhetoric serve little useful purpose when the living are here and now in a world that has moved on from what may or may not have happened centuries ago.

The ANC has failed to heed its own ideological teachings and raison d’etre which were to grow, improve and develop. The ANC has fallen at the first hurdle of metamorphosing from a liberation movement into a credible political party and sustainable government. The eyes and thoughts of the ANC remain firmly fixed on the perceived glories of its past where, by virtue of the then prevailing circumstances, it was easy to exhibit and enjoy disciplined solidarity since the goals of the organisation were simple to define and explain and the enemy was easily identified. Now in government the aims and objectives are far fuzzier in the face of the need to be a responsible and credible representative of an entire and diverse population; the temptation for which the ANC has fallen has been that of remaining a lobby group for a narrow and specific segment of the populace. The ANC continues to view everything non-ANC as being ‘the enemy’ and has behaved and responded accordingly.

Thus, for example, ANC officials will blame ‘white mentality’ and resistant racism for poor results on the rugby pitch or athletics field where points are not awarded for ideological or racial purity but for excellence in performance. Excellence cannot be legislated or enforced. It must be scouted, nurtured and developed organically. A fat runner cannot be expected to be able to produce satisfactory results in the marathon, regardless of any racial or socio-economic origins from which the individual may have come; the athlete must be made fit and then trained in his discipline before adequate results can be reasonably expected. Likewise, a school leaver, unable to add, subtract and so on cannot become a computer technician or electrician until he has had the time and resources granted him to master sufficient of the basics to enable him to then progress on to more specialised (and better paid) areas of competence.

Similarly with the Zimbabwe situation. The ANC remains locked in its perennial ‘circle-the-wagons’ mentality of giving greater weight to old loyalties than to recognition of getting the job done and removing those who fail to produce results. The support given the ANC by Mugabe and Zimbabwe during the ANC’s years of opposition to the then South African regime are viewed by the ANC to be perpetual bonds of debt that far outweigh any consideration of the abilities and rationale of the creditor in that relationship. That Mugabe is an egomaniacal despot who has so alienated the people of both his own country and others around the world that the economic and political fabric of Zimbabwe now lies tattered and fallen appears to matter less to the ANC than the perceived debt owed to Mugabe by the ANC. Worse still, the negative impact upon South Africa and other SADC countries stemming from Mugabe’s depredations is clearly considered by the ANC to be of little import; it could be argued that what happens in Zimbabwe is their own affair and they should be allowed to get on with it, but the argument fails if the actions of Zimbabwe directly impact on South Africa. Would the ANC retain its present stance if the Zimbabwean army were to invade South Africa in order to seize assets no longer available in Zimbabwe? Or would the ANC turn a blind eye, again, and insist that no crisis existed?

As the governing party of South Africa the ANC’s prime responsibility is to the country and all the people of South Africa. The ANC’s responsibility to Zimbabwe (or any other country, for that matter) is secondary, at best. Get your own house in order. Only then – not before – and if there is something to spare, can you turn your charitable efforts elsewhere.

Hubris can be a terrible thing. It blinds one to failings and shortcomings which, if pride be briefly set aside, could be corrected with a minimum of fuss and damage. There is no shame or loss of self-esteem in saying “I don’t know” or “I don’t have the skills right now to correct this situation” and then turning to others who possess the requisite knowledge. Knowledge and skills know no skin colours – but where they are claimed when, in fact, they are absent then there is a real and severe humiliation when the deficit is finally revealed.

Levy Mwanawasa’s legacy – in part, at least – will be of declaring to the world that just because fellow black Africans now largely control their own destinies it is still not right or acceptable when laws and principles are broken and cast aside – just as it is unacceptable when ordinary people suffer because their leaders are too proud or ideologically blinkered to acknowledge that they are relatively new to the business of running their own affairs and to bring in the required expertise.

Spearpoint.

26^th August 2008

Rampant Food and Fuel Prices.

 

 

 

The hiatus in this blog of the last couple of weeks resulted from me traveling a bit through southern Africa on business.

 

You should understand that, being a white South African male over the age of fifty, affirmative action and all the “-isms” of age, gender and race render me all but unemployable in this Rainbow Nation of critical skills shortages – notwithstanding my degrees and international experience in my field. So when work does periodically present itself I am compelled to grab it and to fiercely focus on the tasks that promise, for the time being, to maintain the temporal connection of body and soul. When money beckons I must then temporarily forego some of my other – more pleasurable and satisfying – pursuits such as blogging. And, much as I enjoy writing, it pays no bills and I have this expensive addiction to breathing which must be periodically slaked with cash – preferably lots of it – whenever possible. Hence my recent absence.

 

I am not so enamoured of driving as once used to be the case; my politically-incorrect car is an ageing brute that punishes its driver for forcing a few thousand extra kilometres out of its creaking carcass. But, in addition to providing a solid upper-body workout, such driving allows time to reflect on Life, the Universe and Everything and thereby provides some of the material which old Spearpoint then tries to convert into the approximations of pearls of wisdom that he seeks to muster in these posts.

 

During this journey I found myself mostly pondering on all the recent shocks of the astronomical price increases in food, fuel and other commodities around the world.

 

We’re all familiar with the price increases. Petrol and diesel prices threatening to push us back to the horse-and-buggy age; staple food escalations promising the prospect of global population decimation; real estate prices destined to shunt us all back into grass huts in a feudal economy; other commodities increasing to the point where the little baubles and the technologies which brighten up and buttress our otherwise drab lives are beyond reach; the threat of drastically higher electricity charges which promise a return not to the age of hurricane lanterns and candles – we won’t be able to afford to buy the oil – but to the age of rush lights and goose grease; the list goes on.

 

Trying to figure out why all of these events have come about in such an apparently short space of time has been an interesting exercise and has led me to some conclusions that are distinctly challenging.

 

We might as well face it: for a considerable period we have had it relatively easy. Ignoring, (for the sake of the point being made), the half or more of the world’s population that has always been too poor to afford to worry about the fibre in its diet (instead being more troubled with the grit, stones, twigs and other detritus in such food as may be available), the world has enjoyed a relatively benign time of late where the basics of life, plus a few luxuries, could be had whilst still having the prospect of putting some money aside for the odd rainy day or two.

 

Then, of course, (being human) we then proceeded to hurry, helter-skelter, to bugger up the nice little zone of comfort within which we found ourselves.

 

Finding the products of our technologies to be pleasant and convenient we then got greedy. We wanted more and, in that wanting, gave space to other greedy people who, for a price, were willing to provide us with more.

 

Let’s look at some of what we wanted in terms of food and fuels since these are the most immediate of our daily needs and desires.

 

• Better quality food – less grit, for a start – with brighter colours and more varied flavourings, artificial or not, which would enable us to differentiate our “lifestyle” from those less well off than ourselves (including our silly kid sister who was dumb enough to marry that throwback who digs ditches for a living).
• Greater quantities of food so that we could gorge ourselves three or four times a day rather than eating small amounts continually through the day as our bodies were designed to do when we were evolving as hunter/gatherers – thereby fostering the growth of global industries in slimming products and remedial medical healthcare.
• Faster food so that the tedious nature of the preparation and processing of cooked foods could be lessened.
• Ever greater supplies of power in the form of electricity because we didn’t want to wear lots of clothes around the house or work and also because the old wood-fired kitchen range was too dirty and too much hard work to clean every day.
• Even greater supplies of fossil fuels because we needed to power the electricity plants and to propel larger, faster vehicles of personal transportation which could give us a shirtsleeve environment in which to wait out the traffic jams on the way to and from work and the supermarket.

 

Lots of wants.

 

My point here is that we have ourselves to blame for many of the reasons behind high prices. Someone has to be paid to produce, package, store and deliver the objects of our desire. Our desires also open us to exploitation by those who would wish to manipulate and escalate those same desires in order to provide more so-called “choices” as a means of generating further sales and revenues by way of marketing and advertising.

 

But there are other ways in which we are subjected to ever increasing pricing which, when all is said and done, we have little control over.

 

Now, before I proceed any further, I need to stress a couple of things.

 

Firstly, I am not too different from the bulk of Western society in that I enjoy the products and services that have been created and made available to everyone who can afford them. I have even managed to be able to buy some of them. I also feel the occasional twinge of lust for the latest mobile phone or big hairy 4×4 – although one of the very few benefits of advancing age is the ability to exert some measure of control over those twinges and to refrain from impulsively either reaching into my hip pocket or signing some usurious agreement to hire the object of desire for a period way beyond the object’s value and practicality.

 

Secondly, within certain limits of taste and capability, I am just as capitalistic as the next man. I like to turn a profit – and the more the better. Admittedly, I am a small-time capitalist, never quite having managed to beat my conscience into the required degree of insensibility to be able to view my fellow humans merely as targets for plunder. I guess I must be a failure – although I do manage to get by. My sleepless nights are caused more by worrying about how I shall survive, sans pension etc., (don’t ask – it’s a long story, as the cricket said to the ant), rather than subconsciously stressing over the deep patina of tarnish building up on my soul.

 

My problem is not so much with the de-skilling of the past couple of hundred years or so – an inevitable consequence of the need to develop an increasingly complex society necessary to cater for the rank stupidity of humankind as it remorselessly breeds itself into global Ebola-like parasitical extinction.

 

My problem with the current situation regarding price increases in the very basic needs of life rests more with the fact that most of these increases are totally artificial and are motivated by the plain outright grasping greed of a relatively small number of individuals wishing to enrich themselves even more than they already are by further impoverishing the already poor and vulnerable.

 

There are a number of parties to this concerted “conspiracy” (don’t you just hate that word?):

1. Governments seeking to ensure their national interests;
2. Commodity and stock exchanges and their associated traders, speculators and brokers;
3. The large wholesale, retail and distributive chains (increasingly often integrated under single ownership);
4. Consumers – as both participants and victims.

 

Each of the above parties is motivated solely by greed and self-interest at the expense of others. Each is able to operate and gain by virtue of the fact that, whether we like it or not, the world is based upon the capitalistic models and theories developed and honed over the last few hundred years or so. Even former and current communist/socialist governments and ideologies have found themselves forced to modify their pretty theories in order to survive – in the case of mainland China to positively thrive – in the harsh world of capitalistic trade and business. Everybody wants to turn a buck.

 

However, capitalism – as with every other economic theory, I guess – contains within its corpus some fundamental flaws which, long-term, will probably render the entire edifice unworkable without some speedy rectification.

 

The main long-term problems with capitalism are, as I see it, the concepts of firstly, eternal economic growth and, secondly, charging prices based on what the market will bear at any given time.

 

These two fundamental underpinning ideas are, ultimately, unsustainable and will create the conditions under which capitalism will, sooner or later, fail unless modified.

• Untrammelled economic growth can only cause an eventual saturation of the marketplace – even allowing for provisions such as the inbuilt obsolescence of products and services (which, already, is a major feature of modern production and economic methodologies) and the enrichment of the entire population of the planet in order to provide sufficient markets for greater and greater production outputs (and which we are most certainly not seeing at present). There seems to be no inherent concept of reaching for and attaining a sustainable equilibrium.
• The idea of charging the very most that the end user of the products and services produced can afford can only result in the near- and long-term widening of the divide between the rich and the poor. Those at the lower end of the economic scale have little or no opportunity to accumulate anything from their labours since so much, if not all, of their incomes are utilised in acquiring just the basics of life – simple foods, rude shelter and public transport. Thus, the poor remain poor and, as such, are of little benefit to capitalism other than as a pool of cheap labour. Their poverty prevents their empowerment as producers and consumers of products and services and their value to the capitalist model is minimal. Even raising their wages accomplishes nothing due to the impact upon production costs and subsequent price rises.

 

Having said all that, let us now return to the “conspirators” in the current tidal wave of price hikes in fuel and energy.

 

The prime example of a government serving its own self-interests in recent times has been that of the United States creating (much as Nazi Germany did in the 1930’s) the conditions to explain and excuse their invasion of Iraq five years ago. In so doing they began the entire process of market uncertainty and price escalations in which we find ourselves today. Oil prices commenced their upward march towards the top of a hill of which no-one outside of the oil industry knows the height. In starting and maintaining an unwarranted war (“We’re prepared to fight for 100 years!”) the inevitable consequence was to shake the global oil market into pessimism and the resultant supply fears – even though, notwithstanding the predictions of the 1960’s and 70’s, there is, in fact, no shortage of oil in the world. Indeed, hardly a month goes by without some announcement of a major oil discovery somewhere on the planet.

 

The only real beneficiaries of the Iraq war have been the oil companies. Oh, yes – and the current oil industry-dominated US political administration.

 

Gee, what a coincidence.

 

De-stabilising the global oil market then gave others the chance to cash-in on the uncertainty.

 

Commodity exchanges, brokers and traders could then “legitimately” demand ever higher prices for the black gold on the pretext of supply uncertainties and the claimed natural balance between supply and demand based upon the old market maxim of charging whatever the market could bear.

 

This, of course, totally ignored the fact that, despite the best efforts of the OPEC oil cartel, oil supply then and now has never been under anything remotely approaching threat. Nor were oil production costs on the increase.

 

Traders and speculators were, in effect, given license to artificially generate and exacerbate a supposed crisis in oil for the sole purpose of increasing their turnovers, margins and personal commissions under the guise of serving the best interests of their stockholders.

 

Consider this:

• Several days ago a US Navy warship fired a few warning shots across the bows of a couple of (supposedly) Iranian speedboats.
• Immediately upon that news the price of a barrel of oil rocketed by $3!

 

Where was the threat to world oil supplies that merited a 2% increase in the oil price in the space of a couple of hours?

 

There was, of course, no justification – other than the traders and speculators grabbing a chance to further gouge the world for their own personal benefit.

 

We have seen similar situations recently when a refinery closes for a day or two because of bad weather. Or when a Nigerian pipeline gets looted or attacked by those who feel excluded from the national bonanza. As if a single locus of supply or transport is going to impact upon the needs of the entire world. In a time of plentiful supply and growing reserves known to be far greater than current production for the next fifty years.

 

Please. Don’t. Insult. Our. Intelligence.

 

The same applies to the traders of other commodities – particularly food. They have been only too pleased to hitch themselves to the coat tails of the oil traders and to take similar advantage.

 

Sure, the world’s population is growing and, yes, the new kids on the middle class block – the Chinese and the Indians – are, not surprisingly, wanting more and better food than they have had for the last couple of thousand years, as well as all the shiny toys that the West has been flaunting in their faces since the 1800’s. But, thanks to the Green Revolution of the past few decades, the world is not, in fact, short of food and we have the land and technology to feed many times the present global population. Properly set up and managed, just Zambia, Zimbabwe and Mozambique could, on their own, provide almost half the world with staple cereals.

 

On the pretence of a supposed food shortage, staples such as wheat and rice are traded and re-traded many times, each trade generating a profit for the traders until we have the crazy situation where, for example, rice has risen in price by at least 70% in the last three months and Thai rice farmers are having to put armed guards on their paddy fields.

 

Then there are the speculators who purchase large stocks of certain commodities (often in Third World countries) when prices are low – usually at harvest times when the market is glutted – and then hoard those stocks away from the marketplace until existing supplies diminish and prices rise in response. The use of foodstuffs and fuels as mechanisms of profiteering against the human right of access to affordable food is cynical and barbaric.

 

Contributing to the lunacy of the current price rises in commodities is the next group of “conspirators”, the large retail chains.

 

Without contributing one whit to the production of the foodstuffs or oil products they peddle, the retail chains can charge the consumer anything from 25% to 500% above cost for the doubtful privilege of distributing the goods to within reach of that consumer. (Real estate chains, for example, can’t do that but have been accused recently of deliberately and artificially inflating the asking prices of properties in order to increase the size of their commissions. The concept of charging whatever the salesman thinks the dumb schmuck in front of him might be stupid enough to commit himself to prevails everywhere). No wonder property prices now prevent first-time buyers from entering the market and forcing people away from their ancestral roots to seek survival in the global urban migration.

 

Perhaps it might not be so grotesque were these chains to pay their workers over the legal minimums; or to employ people on a basis other than casual and temporary; or to stop using their commercial volume purchasing advantages to coerce farmers and independent distributors through restrictive practices into accepting prices which then render those businesses marginal.

 

Matters are worsened when one considers the fact that these chains spend many millions (Rands, Dollars – it doesn’t matter) advertising in the print and electronic media with the constant and perennial claims of being the cheapest and offering the greatest savings to the consumer.

 

Such claims would only be justified if retail prices were not the result of price fixing and collusion between the wholesalers and retailers, as well as between the retailers themselves. Recent investigations in Australia, Britain and South Africa indicate that price fixing is rife and may, in fact, be prevalent – especially through the good old “recommended retail price” mechanism.

 

The final party to the “conspiracy” of artificial prices is the consumers themselves.

 

Consumers are their own worst enemies. Motivated by their own personal greed, stimulated by enticing advertising, too many consumers will willingly pay whatever is asked. Their desire to have whatever it is that they are desirous of feeds the concept of being allowed to charge whatever the market can bear. They have forgotten the old days of the village market where prices were negotiated to the satisfaction of both buyer and seller. If neither party was happy with what was being offered then that party could decline to trade and depart the scene.

 

A high street supermarket, for example, is nothing more than a village marketplace for the local community (many such supermarkets, in fact, claim such a heritage for purposes of brand identification). But because a supermarket has got pretty displays, clean floors, banks of glittering refrigerators and piped Muzak, people have been intimidated into thinking that they are no longer permitted to haggle. The price tag on a shelf is nothing more than an indication by the retailer of what sort of offer he is prepared to consider for that particular item. If the consumer accepts that tag then that is what he is offering and the retailer is only too happy to accept both the offer and the settlement.

 

So, although the consumer is all too often the victim of artificially high prices, he is also stupid not to realize the power at his command were he to challenge the exorbitant prices confronting him and to make an amended offer. If the retailer doesn’t like the offer he can ask you to leave his premises and thereby lose a sale. If sufficient consumers likewise challenge the retailer’s overly high margins that retailer would soon have to re-consider his position or face the prospect of going out of business.

 

The consumer as a group also fails to realize that, if push came to shove, he could forego one or two meals or delay by a few days or weeks the purchase of that washing machine/fridge/lounge suite/car as a way of demonstrating his power to the retailers. Aside from the health and moral benefits to be had, the temporary drop in sales for retail chains could create sweaty brows and an increased consumption of antacid tablets sufficient to bring about a re-consideration of extorting monstrous margins in favour of reasonable returns within a stable price environment.

 

I do not know the answers to solving the present crisis in food and fuel prices. But I do know that we need to do something to curtail and control the excesses of what is an otherwise workable system.

 

Capitalism needs – desperately – to find a path away from the boom and bust short-term maximum gratification of the profit motive. Sustainability and eventual equilibrium needs to be achieved so that the one can profit but not at the expense of the other.

 

Additionally – and equally desperately – the concept of pricing to what the market can (only just) bear needs to be adjusted to one where prices are directly related to fixed and fair margins over the cost of production.

 

Only once such equity is achieved can capitalism then be justifiably linked to democracy.

 

Money could still be made in large enough amounts to continue attracting the interest of the intrepid. But we must also find a way to enable the less intrepid to survive in relative comfort and security.

 

 

Spearpoint.

27 April 2008