SAFTU condemn’s Remgro’s strike of capital

The South African Federation of Trade Unions has noted remarks made by

Johann Rupert which confirm everything the federation has been saying about a “strike of capital” and the immorality of the way a monopoly capitalist system is run – to benefit a rich elite with no consideration for workers, consumers or the country.

Rupert, SA’s second-richest man, is the non-executive chairperson of Remgro, an investment holding company based in Stellenbosch and the 9th biggest publicly-listed company in South Africa. It has stakes in 21 South African companies, including Mediclinic, Rand Merchant Bank Holdings, FirstRand and Distell,.

It thus plays a dominant role in the economy, in which its investment decisions can have a big influence on whether the economy grows or shrinks, whether jobs are created or lost and whether people are richer or poorer.

Defenders of the capitalist status quo like to pretend that they are the only people who can make the right decisions in these areas and take us out of the current catastrophe of unemployment and inequality

But Rupert’s comments at Remgro’s AGM on 28 November 2018 showed the exact opposite – that these are the last things on capitalists’ mind when they make investment decisions.

After his annual report, two “shareholder activists” asked questions. One of them, Shane Watkins, chief investment officer of All Weather Capital, wanted to know what the group intended doing with the R15bn cash on its balance sheet.

This revealed clear proof of this company’s “strike of capital”. R15bn which could be used to launch new enterprises, create new jobs and uplift the lives the poorest South Africans is being invested in nothing, but just sitting in Remgro’s bank account earning interest.

But Rupert’s reply was even more revealing, and shocking.

In his report he had expressed concern over the economic outlook: ”What really concerns me is that I’m not sure people realise the trouble we’re in; by 2020 most people believe the US will be in recession. US President [Donald] Trump is hell-bent on causing trade wars, and with populism and fascism on the increase, the world is eerily like it was in the 1920s”.

His reply to Watkins’ question was that the board was looking for opportunities [to invest] but was reluctant to make acquisitions now, as “people are not scared enough yet”.

Right now, he said, there was still too much cheap capital which meant potential acquisitions would be overpriced. Rupert said he wanted to wait for the froth in the market to subside and for “a bit of panic”.

What could better reveal the warped priorities of the capitalist class than this blatant statement that investment decisions had nothing at all to do with the national interest, let alone creating jobs and providing better service to customers, but purely on how much profit can be made.

If a greater return on investments can be made after Rupert’s predicted financial collapse in 2020, when people get scared and panic, it will enable the company to buy shares more cheaply and make a bigger profit. Until then the R15bn just can sit in the bank!

This attitude exposes yet again the hypocrisy displayed at the Jobs Summit and Investment Conference when business moguls pretended to be concerned with creating jobs and driving economic growth, while around boardroom tables they are finding excuses to do nothing of the sort.

It exposes the futility of President Ramaphosa’s empty promises of a “new dawn” and 275 000 new jobs a year, which will be created from generous hand-outs from big businesses whose leaders all think along the same lines as Rupert.

They will only have enough “confidence” to invest in the market if the country continues to be run in their interests, through neoliberal, free-market policies, cutting wages and public spending, and fettering the trade unions – policies which the President is now implementing. And even then this will not guarantee that such investment will come if the rate of return on capital is too low.

SAFTU is more certain than ever that this capitalist class, whose wealth is created by the workers’ labour, will never use that wealth in the interests of their workers or of society, but purely to manipulate the market and invest only when they can make the biggest profits and make themselves even richer.

The nationalisation of these mega-monopolies, under democratic workers’ and community control is becoming more urgent. This is the only way the economy can be planned and investment decision made which will benefit the people of South Africa and not a cruel elite of exploiters.