I’ve had a few readers ask me today about my feelings on South Africa’s cabinet reshuffle.

I should probably start by saying that I am generally suspicious of feelings. Whenever we get neuroplastic, and our brain chemistry sparks off a flood of hormones to the various pain and pleasure receptors, we run the risk of (literally) losing our minds. I’m all for thoughtful emotions – but mostly, the heart wants what the heart wants. And the heart can be so easily misled – and so happily enabled by the intellect, which tootles along behind the feelings with a ready supply of post-rationalisations.

And my problem today is that many of the cabinet reactions that I’ve seen online sound like they’re coming out of the mouth of @Tali_babes:

Examples:

• MAHBOOZAH for VP?! Poor Cyril must be caught in a political corner!
• Why can NO ONE remove Bathabile Dlamini from the cabinet? #cantpronouncehername #buticancopyandpasteit
• At least they got rid of Zwane, Mbalula and Lynne Brown. And little Des van whatshisname.
• And, good news, Nhanhla Nene is back in the Finance Ministry. Shame, I remember how that Zuma really did a number on him. Shame. <lukewarm> yay!
• And Pravin is going to fix the State-Owned Enterprises! #handsoffPravin #handsupforPravin

This Pravin obsession… Here’s a quote from the Daily Maverick:

There are two other appointments that are really reason for celebration. The first is that of Pravin Gordhan to Public Enterprises. Gordhan is one of the finest political operators of his generation, and he knows where the bodies are buried and he won’t take crap from anybody. Imagine being on the board of the parastatals just now. He was surely the prime moving force behind the new Eskom board. Envision, just for a moment, if all of the boards of the parastatals looked like Eskom’s and SAA’s. And imagine how quickly things could get moving once he establishes himself (which should take him until about lunchtime on Tuesday).

I mean, it’s lunchtime on Tuesday as I write this. Pravin must already have established himself, and privatised Transnet.

But I’ve now ridden this hobby-horse for a long time, so let me get off it.

The Positive Cabinet Narrative

Here is a positive read of events:

1. Cyril Ramaphosa and his faction within the ANC are seriously committed to the reform of the ANC, and to South Africa’s path toward growth.
2. But they are constrained by the political realities of both the existing power infrastructure, and the hangovers of the previous administration.
3. Therefore, there will be balances and trade-offs – both in terms of policy, and in terms of cabinet composition.
4. In terms of policy:
   1. Some of the old policies will be implemented, and even accelerated. That is the nature of politics.
   2. Wherever possible, the problematic older policies will be approached in alternative ways, in order to minimise the potential downside of their implementation.
   3. And new reform policies will be adopted.
5. In terms of the cabinet:
   1. Some of the old administration are going to be kept in positions of power (or elevated to them) – because that is the nature of politics.
   2. Wherever possible, those that must stay have been neutralised by being shifted into cabinet positions of lesser importance.
   3. And the reformers are being deployed to as many of the key positions as are available.

My concern is that this particular version of events takes a lot of goodwill for granted.

The Cynical View

Here is an alternative:

 

1. Cyril Ramaphosa and his faction within the ANC are seriously committed to the reform of the ANC, and to South Africa’s path toward growth, insofar as those affect the ability of a socialist ANC to remain in power (and specifically, with the Ramaphosa faction at the helm).
2. But they are constrained by the political realities of retaining their position of power within the ANC, while simultaneously retaining the ANC voter base (by delivering on the economic promises that were made to those voters).
3. Therefore, there will be balances and trade-offs – both in terms of policy, and in terms of cabinet composition.
4. In terms of policy:
   1. All of the popular policies that have been promised will be implemented and accelerated.
   2. Wherever possible, those policies will be approached in alternative ways, in order to minimise the potential downside of their implementation.
   3. Some new reform policies may be adopted, when or if expedient.
5. In terms of the cabinet:
   1. Some of the old administration are going to be kept in positions of power (or elevated to them) – because that is the nature of politics.
   2. Wherever possible, those that pose a threat to the Ramaphosa power base have been neutralised by being shifted into cabinet positions of lesser importance.
   3. And Ramaphosa supporters are being deployed to as many of the key positions as are available.

In practice, those two narratives may look similar.

But their focus is quite different.

For starters, the second option is a lot less concerned with the fiscal conservatism that the Ratings Agencies (and @Tali_babes’ dad) might long for.

A more Cyrical end note

Whenever I get to the end of this kind of post, I am forced to acknowledge that my own particular heart tends to be contrarian. Argumentative, even. And here in particular, my frustration is with the blind enthusiasm for the “New Dawn” message, rather than with our new President and his cabinet.

In the end, the cabinet is just a collection of humans. They are in positions of power. Some of them have already been corrupted by power, and some will be corrupted by it. That is also the nature of politics.

But in practice, we are able to live with some political corruption – as long as it’s not excessive to the point of systemic failure. And “State Capture” is a form of state failure.

So the really good news:

• The reality of State Capture has been avoided (the risk of happening again is still there – but that risk will always be there); and
• People are feeling a lot more positive.

And sentiment matters far more than fundamentals in this post-fact world!

So while I might be academically annoyed, I am counter-factually delighted.

Oh happy day.

Rolling Alpha posts opinions on finance, economics, and sometimes things that are only loosely related. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha. Also, check out the RA podcast on iTunes: The Story of Money.