Digital media, pricing and scarcity… the destruction of value and common sense

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By Dr Tafataona Mahoso

IN the last instalment I started to explain the difference between price and value and I pointed out that money-makers and money-changers use the pricing of money assets to destroy value or to misrepresent cash as the value, as an end in itself instead of a mere means to the end which should be value creation, value building and the defence of value.
This week, I want to start discussion of how capitalist pricing and the deliberate creation/perception of scarcity are used to destroy both value and commonsense. I start with the following objective observations:
– Since the onset of the Economic Structural Adjustment Programme (ESAP), the state has come to assess parastatals not anymore in terms of their potential as strategic tools for producing critical goods and livelihoods which private companies refuse to produce, but in terms merely of balancing books, paying monetary dividends or lack of these.
There was a time, for instance, when the Dairy Board used to process nearly enough milk for all of Zimbabwe and to deliver fresh milk to households in cities and towns every day. When the parastatal was privatised I pointed out through my column ‘African Focus’ that the money supposedly saved by such a sale was not worth the real relational value of the same Diary Board for the people of Zimbabwe which was destroyed through ESAP. Today our supermarkets boast mostly cartons of imported milk from South Africa. The new Dairiboard is an insignificant minority producer of milk for Madzimbahwe.
– The Governor of the Reserve Bank of Zimbabwe was reported on September 30 2017 as having told NGOs at a Crisis Coalition Zimbabwe gathering that SADC’s political mediation in Zimbabwe through South Africa should have included a financial package of say R5 billion and, even better, an arranged adoption of the rand as the currency for Zimbabwe!
In other words, the so-called Global Political Agreement — meant to shield Zimbabwe’s sovereignty from very eager aggression by the UK, US and EU — should have, at the very same time, included permanent foreign intervention by South Africa through its Reserve Bank and the rand. So, according to the report, this failure of the GNU to include adoption of the rand partly explains Zimbabwe’s on going monetary challenges. This RBZ view totally ignores the nature of South African society, South Africa’s history and South Africa’s finance capital in relation to that country’s Reserve Bank.
– Refusal by the Reserve Bank of Zimbabwe and the Ministry of Finance and Economic Development to lead the whole people in search of effective means to create and defend Zimbabwe’s own money has been accompanied or followed by increasingly intensified efforts at cash collection:
– Police collect cash at the roads in the form of spot fines;
– ZIMRA collects cash from companies and individuals to meet escalating targets and has often garnished them into bankruptcy;
– City and town councils unleash greedy debt collectors on residents and paid-parking officers on motorists all over Zimbabwe; and they expect the residents to have the cash which they themselves are failing to generate to pay their own workers;
– ZINARA collects cash at tollgates along our highways as well as monthly motor vehicle fees.
In other words, the general assumption seems to be that everyone out there, except myself or my institution, is sitting on piles and piles of cash.
In the meantime, those citizens who are still employed face unpaid salary arrears which in some cases go back more than 10 months. This is so in many town councils! The banks often send away the majority of their account holders empty-handed when they come to withdraw some cash. Mobile money and plastic money have been heavily compromised because they are perceived and publicised in the media as an escape route from the scarcity of cash and the absence of a national currency, instead of being received as a convenience which should be treated on an equal basis with cash (without interest or surcharge) as means of transacting business.
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, David 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 directly undermined the relational value of Bond notes as an instrument of universal internal liquidity for supporting and boosting production throughout the nation.
The Reserve Bank 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 1 to 1.
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 David 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, David Korten defined the problem very well:
– First, neo-liberal 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;
– to redefine finance and financial interests as drivers of economic policy rather than services for facilitating production by the productive sector and the people;
– to spread the doctrine of financialism as an all-encompassing ideology which blinds the nation and its policymakers 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.

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