By Dr Tafataona Mahoso

IF what is called the ‘business community’ has leaders, then those leaders may need to think about the meaning of the following events:
In September 2017 business in general launched a massive speculative spree and as illustrated by the following newspaper headlines:
– ‘Old Mutual rate exposes bond notes catastrophe’: The Standard Business, September 24 2017;
– ‘Zim now back to 2008 doom: as cash disappears, economy melts down’: Daily News on Sunday, September 24 2017;
– ‘Crisis! 2008 nightmare looms’: Daily News, September 25 2017;
– ‘We now have a meltdown crisis’, Daily News, September 25 2017;
– ‘Zim has no capacity’ to build forex reserves’: NewsDay Business, September 25 2017.
Following the 2018 harmonised elections, President Emmerson Mnangagwa was inaugurated in August 2018. The business sector responded by launching and orchestrating a far much bigger panic in which the excesses included rejection of Bond notes and all forms of money transfers.
Businesses, including pharmacies and service providers, demanded ‘hard cash’ in the form of US dollars.
The following sample of the 2018 post-inauguration newspaper headlines demonstrates the extent to which business really wanted a much bigger panic than that attempted exactly a year before:
– ‘ED can’t rig the economy’, NewsDay, September 5 2018;
– ‘Crisis: Fuel Shortages, long queues surface’, Daily News, October 6 2018;
– “‘Talk to Chamisa to spur economy,’ ED urged as economy continues to bleed”, Daily News, October 8 2018;
– ‘Companies close as Zimbabwe burns’, Daily News, October 9 2018;
– ‘Panic grips Zimbabwe’, The Standard, October 7 2018;
– ‘Bond notes disaster: Zimbabweans count costs after a week of madness,’ The Standard, October 14 2018.
– ‘Tax storm: Zimbabwe inflation hits 155 percent,’ Daily News, October 14 2018; and
– ‘Zimbabwe faces its worst economic crisis in a decade,’ Daily News, October 15 2018.
The situation which Zimbabwean businesses have precipitated, especially in October 2018, means that local manufacturers of consumer goods are now without a local market and without an export market.
They have destroyed the local market, either by hiking prices beyond the reach of the majority of their customers or by demanding payment in US dollars, which they themselves cannot pay to their own workers.
They have forfeited the export market by insisting on using the US dollar as if it was a local currency.
Zimbabwe has to pay a premium for imported US dollar notes, making the US dollar extremely expensive, even before it is put to use.
Local manufacturers, using the US dollar as if it was a local currency, have to start at a much higher cost threshold than their competitors abroad and in the region, who pay most of their costs in their own currency.
This means the bulk of local manufactured goods start out already priced out of the export market.
They cannot compete on the export market.
So, we end up with strange capitalists who have destroyed their local market and forfeited their potential export market through greed, speculation and short-sightedness.
These businesses have demonstrated that they are not willing to share costs or losses with their customers.
They have taken a winner-take-all approach to business which cannot sustain them without the customers they have abused and abandoned.
Their local consumer goods market has now reverted to importers of cheaper goods from outside with the lifting of the ban on imports via the amendment of Statutory Instrument 122.
So-called business leaders in Zimbabwe have made a fetish of the US dollar.
They therefore lack any pragmatic sense of the difference between cash and value.
They do not understand the proper purpose of money in relation to wealth creation.
As David Korten clearly stated in The Post-Corporate World: Life After Capitalism:
“Money serves a useful social function as a medium of exchange.
In the hands of speculators, however, it becomes an anti-democratic, anti-market instrument of instability and unjust extraction… Holding virtually any real asset involves a cost to the holder.
Forests, factories, farmland and buildings must be protected or maintained… Even holding gold involves costs for secure storage.
Only those who hold money as a future claim against the wealth that others are creating and maintaining expect a secure, cost-free effort on their part.
This feature of money encourages the conversion of real wealth to money to be held in inflating financial assets, though the interests of (real community and real) society are best served by encouraging the creation, stewardship and augmentation of real wealth.”
In other words, both money and goods are being perceived and treated solely in terms of the price of the US dollar against Bond notes, with the loss of sight of real value and the purpose of economic activity and economic organisation.
Every agency with the means is chasing after cash and investing the bulk of its means in going after cash rather than the production of goods and services of value, one of whose by-products might be cash.
A money-world mentality has gripped the entire nation, diverting us from productive activity.
In The Post-Corporate World: Life After Capitalism, Korten describes the global dimension of the problem which in Zimbabwe has reached extremes:
“It is striking that the two indicators our leaders rely on to assess their economic policies — stock market performance and the GDP – are both money-world indicators that tell us a good deal more about how fast the rich (using pricing and scarcity) are getting richer than about the real quality of our living.”
By defining Zimbabwe’s Bond notes in terms of export incentives to exporters to induce them to earn foreign currency and bring it home, the Reserve Bank of Zimbabwe (RBZ) directly undermined the relational value of Bond notes as an instrument of universal internal liquidity for supporting and boosting production throughout the nation.
The RBZ further decided to make the Bond notes woefully inadequate for universal liquidity when it first promised $1, $2, $5, $10, and $20 denominations but in effect stopped at $5.
Even more, the limited Bond notes were made to run parallel with the US Dollar as two currencies with an exchange rate of one-to-one.
These actions gave money-world speculators the great opportunity to fix, push and repeatedly cite their own speculators’ prices for the US dollar against the Bond note.
The result is the severe scarcity of both, forcing the entire nation to chase cash and to unleash the most unproductive money-world hysteria the world has ever seen!
Whether that scarcity is real or only perceived does not make much difference now.
It was allowed and encouraged by the RBZ’s own actions and statements which failed to foreground the needs and the role of 14 million MaDzimbahwe.
The result is a price war, not a value-building war and not a production war.
Back to Korten:
“Although money-world institutions profit from the mass production and distribution of goods and services and are leading proponents of growth in production and consumption, scarcity (shortage) plays a central role in their global quest for profit… Any economist will happily tell you that scarcity (even when contrived) creates value.”
But what the economist means is that scarcity enables the one hoarding the goods to raise prices and generate profits. Shortages do not produce value.
They are a means to raise and justify price hikes which generate super profits for the few.
Now, through media-orchestrated threats of a repeat of the economic and financial terror of 2008-2009, MaDzimbahwe are being forced to reduce and restrict their discussions of the economy and development to a pre-occupation and obsession with the interests and demands of finance capital.
This is the escape route being promoted, using the obvious deprivations and scarcities created through sanctions and through efforts to revive the 2007-2009 cash craze and hysteria.
The counterfeit escape route being offered is called ‘financialisation’ of the economy or simply ‘financialism’.
In all the media justifications of financialisation and financialism at the expense of the people’s economy, the events of 2008-2009 are blown out of size until they overshadow the entire history of free Zimbabwe from 1980 to-date.
In her book The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein paraphrases Jean Baudrillard’s The Power Inferno in order to underline the purpose of terror: to induce escape, the acceptance of a counterfeit route as a way out.
The usual media jargon is roadmap.
According to Klein:
“Any strategy based on exploiting the window of opportunity opened by a traumatic shock relies heavily on the element of surprise.
A state of shock by definition is a moment when there is a gap between fast-moving events and the information that exists to explain them. (This is often called excess reality)… Pure event, raw reality unprocessed by story, narrative or anything that could bridge the gap between reality and understanding.
Without a story we are … intensely vulnerable to those who are ready to take advantage of the chaos for their own ends.
As soon as we have a new narrative (our own story, our own explanation) that offers a perspective on the shocking (2007-2009) events, we become reoriented and the world (Zimbabwe) begins to make sense (our sense) once again.”
But before we can make that home-grown sense of what has happened as a result of the 2007-2009 financial terror, we must define the counterfeit ‘way out’ which has been offered: ‘Financialisation’ and ‘financialism’.
In The Post-Corporate World: Life After Capitalism, Korten defined the problem very well:
First: “Neoliberal capitalism hides behind the ideology of the market, but the last thing it can do is to tolerate real market forces, to obey market rules and subject itself to fair competition at market prices. In the case of Zimbabwe, illegal sanctions are one of the grossest forms of violation of market rules.
Second:“The most advanced of neo-liberal capitalism’s pathology is known as finance capital or finance capitalism. At this stage, the ownership of capital becomes increasingly separated from its application to production as power shifts from entrepreneurs, inventors and industrialists who are engaged in actual productive activity to financiers and rentiers who live solely from the income generated from the ownership of financial assets…”
In other words, the counterfeit escape route offered from the effects of illegal sanctions and from the financial terror of 2007-2008 is for us to accept without question the drive by global and local financial interests:
– to redefine and conflate the Zimbabwe economy as synonymous with finance and financial interests;
– and to redefine finance and financial interests as drivers of economic policy rather than services for facilitating production by the productive sector and the people;
ants; and
– to spread the doctrine of financialism as an all-encompassing ideology which blinds the nation and its policy makers to the risks of financialisation;
– to justify the establishment of an IMF-inspired financial dictatorship centralising financial power and commandeering national resources in the name of ‘necessary’ financial austerity.
– to develop and refine dubious measurements and valuation strategies which misrepresent more and more of the total value of the economy and of economic activity in terms of speculative finance and financial services so that the finance sector emerges as the biggest, best paying and most important sector;
– to confuse accountancy and mere book-keeping with economics and to force economists to speak like accountants; and
– deliberately to hide and confuse the difference between productive investment which produces rooted wealth and extractive investment which makes money through speculation solely meant to establish claims on the real rooted wealth of the tangible economy.
This is how the true national interest of 14 million MaDzimbahwe has become a mere appendage of minority financial interests bent on speculation.
The so-called Old Mutual rate is a weapon in the hands of those minority interests.