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Dr Tafataona Mahoso
DUE to limited space, my March 16, 2014 instalment in The Sunday Mail, called Strategic Dimensions of a Working Currency, cut off where I was beginning to develop the critical conclusion. In recent years, US monetary policy has revolved around massive bail-outs to multinational corporations, quantitative easing (which means printing massive amount of US dollars to meet the bail-outs) and tapering (which means cutting back on quantitative easing).

Now, because of the residual global status of the US dollar dating back to the end of the Hitler wars, these initiatives in US monetary policy have had enormous impact on economies such as South Africa, which has its own national currency, the Rand; and Zimbabwe, which has abolished its own national currency and is using the US dollar unmediated and unmitigated.

Our media in Zimbabwe have reported several times that the US monetary policy of tapering explains to a great extent the decline in the exchange value of the South African Rand, which decline is expected to continue for five years or so.

So the first critical point of the conclusion is that most countries keep and defend their own currencies even when foreign monetary policies of global powers such as tapering may cause such currencies to devalue significantly.

The second point of the conclusion is that the people and the economy of South Africa or any other country in a similar position are cushioned by their national currency against what would be the raw, unmediated and unmitigated force of US monetary policy if they did not have their own currency.

The third point of that conclusion is what Samuel Bowles and Herbert Gintis stated in Schooling in Capitalist America:
“The economy [including the use of money] produces people. The production of commodities may be considered of quite minor importance except as a necessary input into people production. Our critique of the capitalist economy is simple enough: the people production process — in the workplace and in schools — is dominated by the imperatives of profit rather than by human need . . .”

So, where our politicians, technocrats and businessmen are singing about the three P’s — public-private partnerships — I am thinking of four P’s which are quite insidious and which explain the people production functions of money and the economy, resulting in an often unexplained and unnoticed chain linking principle to practice, to perception and to posture.

For instance, in the March 16, 2014, Sunday Mail instalment, I referred to the embassy as a metaphor and symbol of autonomy and sovereignty. The sovereign political power of the US or UK in Zimbabwe must be mediated and mitigated through the embassy system and regulated by the Ministry of Foreign Affairs in terms of the Vienna Conventions. Likewise the global monetary power of the US or any other major power must be mediated and mitigated though Zimbabwe’s fiscal and monetary policy system expressed via a national currency and regulated by Treasury and the Reserve Bank of Zimbabwe. Local money is a regulating and mediating instrument in relation to foreign money, just as the Ministry of Foreign Affairs is also a regulating and mediating instrument in relation to foreign political power.

The demonisation of the Zimbabwe Dollar and the constitutional relegation of the Reserve Bank of Zimbabwe destroyed this fundamental principle, meaning that Zimbabwe has a foreign affairs ministry which hangs in thin air because it is not anchored in the economic power of local money. The missing anchorage would be provided by a treasury and a central bank fully exercising their fiscal and monetary powers whose species expression is the national currency.

But what exactly is the chain linking the four P’s?
The first P (for principle) means that there is a destabilising imbalance at the level of fundamental principle because the embassy system regulated by the Ministry of Foreign Affairs is not matched by a treasury and a central bank with their own national currency as an expression of the full principle of autonomy and sovereignty.

The second P (for practice) means that in daily practice the people of Zimbabwe experience the raw, unmitigated and unmediated monetary power of the US whose species expression is the US dollar which has replaced their demonetized national currency. This is like drinking gin or whisky straight from the bottle. To appreciate the impact of this daily practice, the reader has to imagine the abolition of the Geneva Conventions and the abolition of the Ministry of Foreign Affairs; so that the whole of Zimbabwe becomes a US embassy or UK embassy compound; so that as a daily routine the people experience US political and sovereign power raw and unmitigated on their own doorsteps.

The third P (for perceptions) means that the direct daily exposure to the unmitigated and unmediated species presence of the US dollar begins to alter the daily perceptions of the people from the reference point of US money: Perceptions of US power; perceptions of success and failure; perceptions of viability and bankruptcy; perceptions of Zimbabwe in relation to the US; perceptions of poverty and wealth; perceptions of who is “hardworking” and who is “lazy.” The persistent use of the Shona term murungu wangu for “my employer” today is a direct residue of the perceived power of the white settler and his deployment of Rhodesian money as wealth.

The fourth P (for posture) means that the people so exposed to the raw experience of US money, especially the young people, begin to assume an economic, political and ideological posture consistent with their daily experience of the imbalances I have outlined here, just as millions of Africans also changed their posture toward the Rhodesian settler regime through their daily exposure to Rhodesian currency in daily use; through their daily exposure to white native commissioners, white magistrates, white missionaries, white managers and white policemen- — all earning more Rhodesian money than themselves. The children begin to notice the glaring gap between our revolutionary rhetoric and our daily financial, commercial and productive or unproductive practices being driven mainly by the pursuit of US money.

The fourth point of my conclusion concerned the logical implications of the principle of mediation and mitigation. South Africa mediates and mitigates the raw power of US monetary decisions such as tapering through decisions of its own treasury and central bank who have their own currency, the rand, to deploy. Yet South Africans are complaining about how US tapering has negatively affected the value of their rand and the performance of their economy. The Zimbabwe economy is much smaller than that of South Africa.

This means the negative effects of the same US monetary decisions have been and are going to be far worse on the Zimbabwe economy than they have been on the South African economy. The reason is that Zimbabweans are directly exposed to the US currency which they have used as if it were their own for much longer than was tactically necessary. One of the negative effects is that the US dollars obtained in Zimbabwe are far too expensive to yield the benefits which our technocrats and businessmen claim that we are getting.

The fifth point of the conclusion is that the same capacity of the South African state to mitigate and mediate the impact of US monetary policies through the rand has also helped South Africa to take advantage of the absence of a Zimbabwean national currency; to take advantage of Zimbabwe’s use of an expensive US dollar in the place of a Zimbabwean currency.

To be continued…..