Date: 23/09/2009
Source: University of the Witwatersrand
Title: Wits: Mbeki: Speech by the former South African President at the Association of Black Securities and Investments Professionals student chapter, Johannesburg

Director of Ceremonies,
Vice Chancellor,
Ladies and gentlemen;
Friends:

First of all I would like to thank ABSIP, the Association of Black
Securities and Investments Professionals, for inviting me to address
the important issue of Challenges faced by Young Emerging Leaders. I
am indeed very pleased that ABSIP focuses on this issue because in
good measure what will happen to our country, our Continent and the
rest of the world will be determined by the quality of the leadership
we develop today.

That having been said, I must confess that it is quite unlikely that I
will say anything today which you do not know already. It would seem
to me that with the challenges having been identified, which I am
certain you have, the critical issue becomes taking action on a
sustained basis to address the challenges.

I am afraid the burden for this falls on the shoulders of the Young
Emerging Leaders referred to in the subject of our discussion this
afternoon. It also falls on the shoulders of such institutions as this
important centre of learning, the University of Witwatersrand, which
must play a central role in developing the kind of leaders we need.

To develop these leaders requires conscious and purposive
interventions to empower individuals with the necessary capacity so
that, depending on how they conduct themselves, they do indeed emerge
as leaders.

There will be no certificate issued by anybody, saying "qualified to
lead", which will thus guarantee that the individuals concerned in
fact become leaders. Nevertheless, given that this is a centre of
learning, I will do what I can to respect this reality, understanding
that you did not invite me to address a mass rally.

It is self-evident that as society develops, it becomes an ever-more
complex organism. The traditional village, with no organic links even
to the next village, is a relatively simple social formation that is
similarly relatively easy to study and understand.

On the other hand, a large city like Johannesburg is internally a much
more complex social formation, made even more complex by the fact that
it has many links both with the rest of the country as well as the
rest of the world.
At the same time, the traditional village to which we have referred
will be sustained by a system of social relations which will favour
social cohesion, and therefore a value system that encourages a
greater sense of human solidarity.

On the other hand, social relations in a city like Johannesburg would
be characterised by competition among individuals, emphasising a value
system based on the success of the individual rather than society as
an integrated and cohesive social formation.

I have mentioned these two areas - the traditional village and the
modern city - to make two observations I believe must constitute an
important part of the development of the young emerging leaders.

One of these is that these leaders must be empowered to understand the
complex phenomenon of modern human society. This understanding of
objective reality is a vitally necessary part of the exercise of
leadership.

The second of these observations is that despite its atomisation
because of competitive social relations, society must nevertheless
also maintain a certain level of social cohesion precisely because the
individual cannot succeed and thrive outside the framework of social
interaction with other individuals.

While this is objectively true, it leaves unanswered the question of
what should be done so to mediate the competitive relations that they
do not effectively destroy the expression of human solidarity which we
must protect and develop as a public good.

Accordingly, I am convinced that the leaders we must seek to build
should, in addition to having the capacity to understand objective
reality, be inspired by a value system driven by a world outlook of
humanism, as represented, for instance, by what all of us understand
as ubuntu.

Before we return to a more detailed discussion of these two matters,
namely, the ability to understand objective reality and to act on the
basis of a humanist value system, allow me to cite some observations
made by the African-American academic, Professor Walter Earl Fluker,
in his book, "Ethical Leadership" (2009).

Professor Fluker (p 40) writes:

"In order for a just civil society to exist, persons in responsible
leadership roles must make decisions based on ethical guides. For
historically marginalised people, the relationship of spirituality,
ethics, and leadership is most urgent. With the long-range economic,
political, and social costs of war, a troubled world economy, and
rapid advances (crusades) in technology, science, and globalisation,
we now have the makings of a social anarchy that threatens the very
foundations of our social purpose. The impending catastrophic fallout
of the present situation will have far-reaching negative consequences
for the least of these, those whom the late Samuel DeWitt Proctor
called "the lost, the left out and left behind". At a deeper level,
however, there is a spiritual malaise, a nihilistic threat promoted by
the predominance of a utilitarian individualism that appeals endlessly
to therapeutic remedies that begin and end with self. Who will lead in
the twenty-first century? Better yet, how shall they lead? Who will go
for us, and whom shall we send? For answers to these questions, it is
instructive to inquire regarding fundamental assumptions of ethical
theory and how these inhere in our construction of spirituality and
leadership."

I believe that Professor Fluker is correct in much of what he says
especially when he draws attention to "a nihilistic threat promoted by
the predominance of a utilitarian individualism that appeals endlessly
to therapeutic remedies that begin and end with self", rather than the
community.

If indeed Professor Fluker is correct, this should alert the Young
Emerging Leaders to the difficult challenge they face to respond to
the observation he makes that, "In order for a just civil society to
exist, persons in responsible leadership roles must make decisions
based on ethical guides."

I will revert to this important matter later. For now I would like to
return to the point I made earlier concerning the need for the Young
Emerging Leaders to understand what I referred to as the need to
empower these leaders "to understand the complex phenomenon of modern
human society".

To discuss this matter, with your permission, I would like to reflect
briefly on a matter that has been hotly debated by philosophers for a
very long time. This is the matter referred to as ‘freedom and
necessity'.

Put simply, this is a debate about how history is made - whether it
results from the exercise of their "free will" by individuals or its
causality derives from forces outside of and independent of human
consciousness.

Reflecting on this, the Oxford English Dictionary defines freedom as
"The quality of being free from the control of fate or necessity; the
power of self-determination attributed to the will."

For his part, in a discussion entitled "Freedom and Necessity", the
20th century English philosopher, A.J. Ayer wrote:

"If the postulate of determinism is valid, then the future can be
explained in terms of the past: and this means that if one knew enough
about the past one would be able to predict the future. But in that
case, what will happen in the future is already decided. And how then
can I be said to be free? What is going to happen is going to happen
and nothing I do can prevent it. If the determinist is right, I am the
helpless prisoner of fate."

The 19th century German philosopher, Georg Hegel, had also addressed
this issue and come to a conclusion which I believe provides a better
guide as to how we should approach the issue of freedom and necessity.

In this regard, Frederick Engels said: "Hegel was the first to state
correctly the relation between freedom and necessity. To him, freedom
is the appreciation of necessity. ‘Necessity is blind only in so far
as it is not understood.' Freedom does not consist in the dream of
independence from natural laws, but in the knowledge of these laws,
and in the possibility this gives of systematically making them work
towards definite ends...Freedom of the will therefore means nothing but
the capacity to make decisions with knowledge of the subject.
Therefore the freer a man's judgement is in relation to a definite
question, the greater is the necessity with which the content of this
judgement will be determined...Freedom therefore consists in the control
over ourselves and over external nature, a control founded on
knowledge of natural necessity."

More popularly, the views expressed by Hegel have been stated as -
"Freedom is the recognition of necessity." Simply put, this asserts
that the more we know about the regularities that govern nature and
the development of human society, the better able will we be to use
our will to determine our future.

I would like to suggest that this makes eminent good sense and is an
approach which our Young Emerging Leaders should take to heart and
integrate within their response to the challenge of leadership. This
means that the effective exercise of leadership must, in part, be
based on as thorough an understanding as possible of objective
reality.

The correctness of this view is confirmed by what happened which led
to the current global economic recession and the various questions
this has thrown up.

If nothing else, these developments should communicate the message
forcefully certainly to the members of ABSIP present here as well as
the trainee economists, that indeed, as Young Emerging Leaders, one of
their tasks is properly to understand the contemporary global economy.

On September 6, 2009, the New York Times published an article by the
Noble Laureate in Economics, Paul Krugman, entitled: How Did
Economists Get It So Wrong? Among other things, Professor Krugman
said:

"It's hard to believe now, but not long ago economists were
congratulating themselves over the success of their field. Those
successes - or so they believed - were both theoretical and practical,
leading to a golden era for the profession...

"Few economists saw our current crisis coming, but this predictive
failure was the least of the field's problems. More important was the
profession's blindness to the very possibility of catastrophic
failures in a market economy...And in the wake of the crisis, the fault
lines in the economics profession have yawned wider than ever...

"As I see it, the economics profession went astray because economists,
as a group, mistook beauty, clad in impressive-looking mathematics,
for truth...Unfortunately, this romanticized and sanitized vision of the
economy led most economists to ignore all the things that can go
wrong...

"When it comes to the all-too-human problem of recessions and
depressions, economists need to abandon the neat but wrong solution of
assuming that everyone is rational and markets work perfectly. The
vision that emerges as the profession rethinks its foundations may not
be all that clear; it certainly won't be neat; but we can hope that it
will have the virtue of being at least partly right."

Professor Krugman had made the charge that because they failed to
understand objective reality, the world's economists failed to see the
then impending global financial and economic crisis. Accordingly, they
failed to provide the leadership which could have resulted in various
interventions being made, which would have saved the world from a
crisis that has resulted in the impoverishment of hundreds of millions
and an alarming growth in levels of unemployment.

So extensive was this failure to understand objective reality that
there was even massive trade in financial products which even the
professional traders did not understand, with many proving to be
nothing more than a worthless scraps of paper.

Speaking on April 14, 2009, the Chairperson of the US Federal Reserve,
Ben Bernanke, said:

"The financial industry designed securities that combined many
individual loans in complex, hard-to-understand ways. These new
securities later proved to involve substantial risks - risks that
neither the investors nor the firms that designed the securities
adequately understood at the outset."

In this regard, on 13 March 2009, the outgoing Governor of the South
African Reserve Bank, Tito Mboweni, went further to say:

"The global financial system is a finite entity, and although risk can
be passed around, it does not disappear. We had probably
underestimated the inter-linkages of financial systems across the
globe, and the extent to which globalisation had created a complicated
network of circuits for the contagion of financial risk...

"The current crisis resulted from a specific combination of a number
of causes. For years, liquidity in global financial markets was
mispriced, and therefore generally taken for granted. Interest rates
were low, and huge profits were locked in through carry trades where
funding could be obtained at a minimal cost in overnight markets, and
invested in high-yielding longer-term assets..."

These statements by two central bank governors emphasise precisely the
point that even they failed to understand what was happening in the
global financial markets and therefore did not provide the leadership
that was necessary to avert the financial crisis which led to the
current global recession.

In the aftermath of this recession, other important questions have
arisen. These include:

• what should be done about companies that are "too big to fail", and
therefore the consequent challenge of what is called "moral hazard"?
• in a capitalist economy, is it possible so to limit the
concentration and centralisation of capital to avoid the emergence of
monopolies and oligopolies made up of companies that are "too big to
fail"?
• is it possible to avoid the "socialisation of risk" such as would be
assumed by private corporations: if not, what benefits should society
derive from such "socialisation of private risk"? and,
• more generally, what role should the state play in the economy, with
regard both to the ownership of companies and the regulation of the
market?

I pose these questions without providing any answers, once again to
underline the point that our Young Emerging Leaders will have to
participate in the effort to answer them. For them to be helpful to
society, those answers will have to be based on a profound
understanding of the process of contemporary social development.

I have insisted on the critical necessity for our Young Emerging
Leaders to be empowered to understand objective reality in part
because it is self-evident that countries that have to undergo a
process of fundamental social transformation, such as ours, need such
empowered leaders.

In addition, our experience over the last fifteen years has said to me
that in many instances many in our country have not fully understood
the scale of the challenge contained in the words we have used very
often - namely, the eradication of the legacy of colonialism and
apartheid.

Precisely to ensure the achievement of this objective, in its Founding
Provisions, our Constitution enjoins all of us to work so that our
country achieves such objectives as:

• equality;
• non-racialism; and,
• non-sexism.

I am certain that there are very few South Africans, if any, who today
would, for instance, question the need for us to transform ours into a
non-racial country.

The reality however, is that because this objective, like the others
mentioned in our Constitution, cannot be realised in a short time, the
Young Emerging Leaders will still be faced with the task to lead the
country as it continues to strive to implement the Constitutional
prescription to build a non-racial society.

In this regard the Young Emerging Leaders will have to answer various
questions for themselves, such as:

• what exactly do we mean by a non-racial society?
• what benchmarks should we set to measure the progress we are making
in this regard?
• to the extent that the creation of such a non-racial society entails
radical socio-economic change, as it must, what should this change be?
• what resources should and can our economy generate to finance this
change? and,
• what should be done to nurture a sense of common patriotism, a
shared national identity that would give meaning to the vision of
non-racialism?

Unless we answer these and other questions, and similar ones about the
equally important issues of equality and non-sexism, and communicate
them to our people as a whole, so long will many among us entertain
and express expectations that cannot be met.

As all of us know, sometimes this can lead to social instability.

I trust that what I have said is sufficient to underline the
importance of the need for our Young Emerging Leaders fully to respect
the need for them to gain detailed mastery of the objective reality
which they will be called upon to help transform.

As I said earlier, I would now like to return to the observation that
Professor Fluker made about "a nihilistic threat promoted by the
predominance of a utilitarian individualism that appeals endlessly to
therapeutic remedies that begin and end with self", rather than the
community.

I am certain that, given the attention this has received from many
intellectuals for at least two centuries, there is no need here to
make a presentation about the connection between capitalism and the
individualism to which Professor Fluker refers.

In this regard for instance, Ronald Takaki said in his book, "Iron
Cages: Race and Culture in Nineteenth Century America":

"The fusion of Protestant asceticism and republican theory provided
the ideology for bourgeois acquisitiveness and modern capitalism in
the United States...Eighteenth century republicanism accelerated this
thrust toward commodity accumulation and the primacy of the
marketplace, as it disintegrated the feudal order and freed men as
individuals to prove their virtue in the pursuit of possessions."

Members in this audience will recall that on previous occasions, in
this context, I have cited what the financier George Soros had written
in his article, "The Capitalist Threat", published in the February
1997 edition of Atlantic Monthly. I beg your indulgence once more to
cite what Soros said, as follows:

"Insofar as there is a dominant belief in our society today, it is a
belief in the magic of the marketplace. The doctrine of laissez-faire
capitalism holds that the common good is best served by the
uninhibited pursuit of self-interest. Unless it is tempered by the
recognition of a common interest that ought to take precedence over
particular interests, our present system -- which, however imperfect,
qualifies as an open society -- is liable to break down...

"There has been an ongoing conflict between market values and other,
more traditional value systems, which has aroused strong passions and
antagonisms. As the market mechanism has extended its sway, the
fiction that people act on the basis of a given set of non-market
values has become progressively more difficult to maintain.
Advertising, marketing, even packaging, aim at shaping people's
preferences rather than, as laissez-faire theory holds, merely
responding to them. Unsure of what they stand for, people increasingly
rely on money as the criterion of value. What is more expensive is
considered better. The value of a work of art can be judged by the
price it fetches. People deserve respect and admiration because they
are rich. What used to be a medium of exchange has usurped the place
of fundamental values, reversing the relationship postulated by
economic theory. What used to be professions have turned into
businesses. The cult of success has replaced a belief in principles.
Society has lost its anchor."

The fact of the matter is that ours is a capitalist society.
Accordingly, it cannot be insulated from the processes described by
Ronald Takaki and George Soros, which necessarily, seriously militate
against the achievement of the important objective of social cohesion.

It was because he recognised this challenge in his own country, the
United States, that Professor Fluker said that, "In order for a just
civil society to exist, persons in responsible leadership roles must
make decisions based on ethical guides."
Clearly, we will fail to build "a just civil society" if we allow the
view to dominate that, as Soros said, "The doctrine of laissez-faire
capitalism holds that the common good is best served by the
uninhibited pursuit of self-interest", and therefore that "People
deserve respect and admiration because they are rich...(because) What
used to be a medium of exchange, (money), has usurped the place of
fundamental values..."

As he said, in these circumstances, society would lose its anchor.

The point we are making is that the Young Emerging Leaders will also
have to take on the difficult task of mediating the processes immanent
to the capitalist system which Takaki and Soros described, exactly
because it must be the central task of these Leaders to help build the
"just civil society" to which Fulker referred.

To create this "just civil society", Soros argued that the
"uninhibited pursuit of self-interest" should be "tempered by the
recognition of a common interest that ought to take precedence over
particular interests."
Unfortunately, this result cannot be achieved by decree, in much the
same way that fundamental social change cannot be brought by decree.
Among others, it will entail both the judicious use of the social wage
and a sustained political and ideological struggle to mobilise society
not to fall victim precisely to the faulty reasoning which manifested
itself among economists, which Professor Krugman repudiated, of a
virtually theological belief in infallible markets.

The challenge of the renewal of our Continent, Africa, must continue
to occupy a prominent place on our national agenda. I am certain there
is no need to convince you of this. Our country is an inseparable part
of our Continent. Its future cannot be decided outside the context of
the destiny of Africa.

I remain convinced that the renaissance of Africa can and must be
achieved. By its nature this is a long-term project requiring our
sustained attention, side-by-side with all other Africans. You, our
Young Emerging Leaders must therefore understand this that the task to
achieve Africa's renewal will inevitably be an important part of the
agenda you will have to address.

In this regard it is critically important that our Young Emerging
Leaders should familiarise themselves with such important policy
documents of the African Union as the Constitutive Act, NEPAD and the
various Conventions and Protocols that have been adopted by our
Parliaments. Similarly, we have to make a serious effort to gain a
better understanding of our Continent as a whole, going beyond such
information as might be provided by the media.

In addition we must also act vigorously to build the necessary
networks with other Young Emerging Leaders elsewhere on our Continent
as part of the process of building the popular movement we need to
promote the African renaissance.

As you know, during the advance towards the achievement of this
objective, we will experience many defeats and reversals. However I
would to urge you that you should never despair, and assure you that
your peers throughout Africa remain inspired to engage in struggle to
achieve the re-birth of their Continent.

With regard to everything we have said, and needless to say, you, our
Young Emerging Leaders must understand that you are not mere
technicians but leaders of people.

Thus to lead, means to engage the people in an honest and sustained
manner to mobilise them so that they too play an active and conscious
role in the process of fundamental social transformation rather than
remain as immobilised spectators who expect government to "deliver".
It means learning the habit always to tell the truth and thus
cultivate the confidence of the people in you who will be their
leaders.

Let me conclude by quoting yet another passage from the book, Ethical
Leadership by Walter Fluker:

"In a world threatened by the onslaught of disease, poverty, and war,
we need more than ever a new generation of leaders who will embrace
the strangeness of compassion that creates a new language of community
for America and the world. How strange would it be to see a new cadre
of leaders who are spiritually alert and ethically centred, who dare
to make a track to the water's edge? These leaders must take as their
moral compass a renewed vigour in the struggle for justice and a heart
filled with compassion for the stranger - the radically different
other in whose face we see our own and the face of the new world that
calls us. These are the leaders who stand at the intersections of
character, civility, and community and dare to re-imagine the world."

The question is - will our Young Emerging Leaders be such leaders who,
having re-imagined the world, take steps to remake it in favour of the
community made up of millions of ordinary people!

This question can only be answered by yourselves more through what you
do rather than what you say.

As Frantz Fanon once said - "Every generation out of relative
obscurity discovers its mission; it either fulfils it or betrays it."

Thank you.