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Elon Musk's Gift To The US: State Capture

Writer's picture: Jan DehnJan Dehn

Elon Musk has come bearing gifts... (Source: here)


In recent days, Elon Musk has managed to seize control of the US government’s payments system, giving him access to all the payments of the Federal Government, including social security, medical payments, and tax refunds.


The funds for federally funded projects at state level, such as infrastructure and programmes to support families with little children are now also under his control.


Elon Musk has also gained access to every American tax payer’s personal information, including social security numbers and bank account details.


In short, by taking over the US payments system, Elon Musk has put himself in a position, where he can turn payments on and off as he pleases and use sensitive public information to serve his own private interests.


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There is a technical term for what Elon Musk has just done - state capture. State capture occurs when private interests gain control of, and significantly influence, government processes and resources, to their own advantage.

 

State capture is far worse than conventional corruption, because it is systemic; literally the entire government, with all its powers and resources, falls into the hands of the capturer.

 

Other countries have fallen foul of state capture, including Bulgaria, Romania, and Turkey. However, the most interesting example is South Africa, which is Elon Musk’s home country.


Elon Musk’s efforts to capture the US state are likely to have been heavily influenced by what happened in South Africa, so let me briefly outline what took place in one of Africa’s wealthiest countries.

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The South African state was captured by private interests during the presidency of Jacob Zuma (2007-2017). Zuma, prior to becoming president, had formed close ties with the Gupta family. The Gupta family, like Elon Musk, were extremely wealthy immigrants.


Zuma and the Gupta family targeted the procurement budgets of the South African public sector, which is basically what Elon Musk has just done in seizing control of the US Treasury.


Zuma and the Guptas also targeted smaller departmental procurement budgets, institutions with large capital spending, big IT budgets, and large pools of funding, such as the state pension fund. In the US context, we may be witnessing something very similar with the ongoing take-over of USAID, a hub for procurement for overseas projects.


In South AFrica, corrupt law enforcement agents and heavily compromised ministers were put in charge of key enforcement agencies to reduce the risk of prosecution. Here we also see strong parallels with what is going on in the Washington DC, both with respect to Trump’s choices of officials, many of whom are heavily compromised, and the purges currently happening in agencies, such as the FBI.


At the advice of the Gupta family, Zuma appointed willing collaborators, including ministers and senior officials, to oversee state-owned entities, such as boards of directors, tender boards, and committees that oversee audit and risk management.


Governmental decision-making processes were 'taken offline' to avoid scrutiny of decisions made in bad faith.


The Zondo Commission, which was set up to investigate state capture after Zuma left office, confirmed that Zuma and the Guptas had appointed willing collaborators to key positions, hobbled law enforcement agencies, weakened parliamentary oversight, and captured parts of the independent media (see here).


The over-riding objective of Zuma and the Guptas was to gain control the enormous funds of the South African government. In the case of the US Federal Government, the prize is a whopping USD 6 trillion.


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So far, the capture of the US Federal Government by Elon Musk and Donald Trump has been extremely rapid and far more aggressive than in South Africa. This event qualifies as a full-blown constitutional crisis, although US-sycophants in the mainstream media and among America’s main allies in Europe and Asia are still not quite ready to label it as such. They will. In time.


Meanwhile, I fear the alliance between Trump, a fairly-elected, but deeply corrupt, criminal, immoral, and fascist president, and corrupt billionaires, such as Musk, will prove strong and difficult to break.


The main hope, for now, is that, as history shows, attempts at state capture have usually ended badly for the main protagonists. As their rampant corruption and gross abuse of power became too flagrant, civil society eventually organised and rose up to unseat the president and the capturers.


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Once America's sordid experiment with state capture is over, there will be need for deep scrutiny of the US political system, including introduction of reforms to prevent recurrence of this type of abuse of power.


The root cause of state capture and other types of political corruption is political impunity. We grant our politicians supreme power, but we fail to hold them to standards commensurate with such power.


This must change.


Politicians must be free to choose the platforms on which they run for office, but once elected they must be held criminally accountable to ensure they deliver on their promises. If they deliver, they should be paid handsomely, but if they fail, lie, deceive, or commit crimes, while in office they should face fines or even prison. For a more detailed description of my proposal for political reform in Western democracies, see here.

 


The End

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