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Gangster capitalism and its attendant warlords rule SA’s taxi industry

This gangster capitalism was born out of the absence of public transport, wanton deregulation, opportunism, ideologically lost banditry, the availability of weapons/lack of law enforcement, corruption and fear.
Ismail Lagardien
By Ismail Lagardien
28 Aug 2025
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South Africa’s taxi industry has brought a relatively new iteration of capitalism to the country. It’s a gangster capitalism.

This form of capitalism is quite different from other forms, like crony capitalism, chaebol capitalism or even plutocratic capitalism. It is also not like the gangsters for capitalism of Henry Ford who employed gangsters to bust unions, or the gangsters of capitalism who were sent to destabilise countries in the Global South.

The gangster turn in South Africa changes the dynamic from gangsters being the weapon employed by capitalist actors, to these actors being themselves the gangsters. This gangster capitalism was born out of the absence of public transport (as a public good), wanton deregulation, opportunism, ideologically lost banditry, the availability of weapons/lack of law enforcement, corruption and fear.

It’s a fascinating turn, this gangster capitalism. It is, in part, what we have been discussing for the better part of three decades; about the future of capitalism, how it may end, and what will replace this system.

A couple of trends and likely replacements or transformations of capitalism emerged with Paul Mason’s PostCapitalism: A Guide to our Future (get a free copy of the book here) and most recently, Yanis Varoufakis presented the (plausible) idea of a Technofeudalism in the making.

The taxi industry’s gangster capitalism is, also, a world away from the primitive accumulation of gangsterism in the former Soviet bloc and China during the 1990s. These are all quite separate from the discussion that I have been involved in; about the contending forces of liberal capitalism (led by the European world), and state-led capitalism (led by China, among others), and what it all means for the future.

Quite frankly, the gangster capitalism with which I tag the taxi industry is much closer to my deepest beliefs about capitalism. Put politely, this belief is that we are all up the creek without a paddle.

This belief centres on the idea that it is normal for capitalists to do anything possible and (even) illegal to make the capitalist enterprise work. This would include “going underground” by sending their cash and machinations into virtually untraceable and dark places where states (and taxation) cannot reach them.

Violence, intimidation, blackmail and manipulation


At the extreme, they will employ gangster tactics, from outright violence to intimidation, blackmail and manipulation — all of which is driven by senses of innocence, entitlement and, in some instances, a belief that they are doing the work of God.

On the ground (where the rubber hits the road), we reach a situation where the capitalist says: “Use my service, buy my goods on my terms and if you don’t, you are hate filled, you don’t like me, you don’t like economic freedom…” And then there is violence. It’s a perverse, but unsurprising logic.

The gangster capitalism referred to is something different, and something seemingly unique to South Africa’s minibus taxi industry, although Russia descended into gangster capitalism after the collapse of the Soviet Union.

I have used minibus taxi services from Georgetown, Guyana, in South America, to Samarkand and Tashkent, in Uzbekistan, Central Asia, and never came across passengers or pedestrians or other road-users who were afraid of minibus taxi drivers.

The taxi industry is a reminder of how South African society is so similar to, yet so different from, societies elsewhere in the world; we are nonique. I made up that word to describe this same but different state.

Economic freedom’s opportunities in a deregulated polity


The problem began to unfold in the years immediately after the National Party came to power. That was when narrow public transport routes were run from suburbs and townships into the city, and with (what we now recognise) little to no projections or scenario-planning for a future that included black people in the mainstream.

This lack of vision was driven, of course, by the belief that spatial apartheid would remain in place; that the majority of African people would be relocated to “homelands” with small reservoirs of black labour on the peripheries of big cities and towns.

Mass transit public transportation, as a public good, was deemed unnecessary.

Two things happened, and are worth bearing in mind. Grand apartheid’s spatial organisation stopped, the homelands policies began to implode, urbanisation increased, and deregulation (in the mid-1980s) led to the opening up of the public transport industry. As the 1980s drew to an end there were more people in need of public transport, more people commuting in and out of the towns and cities, and business opportunities opening up.

Within about 15 years of that opening up, by 2000, there were an estimated 127,000 minibus taxis operating in the country, accounting for 65% of all public transport commuter trips.

In 2001, taxi union Santaco was created, and currently has 300,000 members, with 200,000 operators running more than 350,000 vehicles. These are approximate numbers, and do not account for unregistered operators. Two decades after the formation of Santaco there were an estimated 600,000 employees in the industry “who are mainly lower and semi-skilled workers”.

There is a reliable body of research on the collapse of Somalia during the early 1990s which showed that the fall of Mogadishu was supercharged by de facto deregulation — the complete absence of the state. All of this came in the wake of conflict between 1988 and 1992.

I arrived in Mogadishu as a mid-career graduate student in late 1993. Across most of Somalia, bandits, warlords, gangsters, clan-based militias and crooks stepped into the vacuum of the deregulated polity. The results were plain to see.

Somalia became “a cautionary tale of how badly managed transitions of power can lead to chaos…” wrote the journalist Faisal Ali, who covers Somalia and East Africa, in May this year.

Back in South Africa — and also plain to see from Cape Town to Johannesburg — bypassing the delirious high of democracy in 1994 are the results of deregulation, which began in the mid-1980s and which rapidly descended into opportunism, rampant lawlessness and now violence, on the roads of South Africa.

Warlordism


What we’re seeing is best understood as gangsterism, manifested in exploitation, abuse, extortion and violence. While we are not quite (not specifically) occupied and rampaged by bandits, nor by identifiable warlords or clan-based militias, there are indications that types of banditry and warlordism are at work in the taxi industry. Warlordism, personal armies and banditry have been features of societies around the world for ages.

In South Africa there have been incidents when “overseers” or “supervisors” of taxi routes and operators were seen at sites of conflict bearing arms. As gangster capitalists, and not unlike warlords, they lay down the law and are prepared to enforce it — with the police idly watching.

The law of the taxi operator as gangster capitalist is something like this; use our taxis, and don’t offer rides to people other than your family because those passengers are our customers, with attendant threats of violence.

In this scenario, the passenger has no say, the person who provides a ride has no say, and the “economic freedom” of the taxi operator is superior to everyone else’s, and they have the arms to enforce their laws. For example, individuals standing by the side of the road, hitching a ride, can and have been forced, extorted, to board taxis. Santaco has distanced itself from this practice.

The lack of public transport as a public good; deregulation to open up opportunities for private taxi operators; and the drift into lawlessness with a police force and state that have lost the trust of vast sectors of society have all bled into the veins of the gangster capitalist.

The minibus taxi service is an essential good (as in public, private or club goods) that has transmogrified into a Frankensteinian monster, from being an essential good thing to being a curse. This happened when the state considered transformation as an end in itself, and capitalists are allowed to run in parallel systems outside the laws that govern society. That’s what gangsters do.

I have seen this in southern Italy, and I have seen this in Somalia. In both these cases, the gangsters and warlords were not centrally coordinated, at least not visibly to researchers, but they (all) simply knew what they could get away with.

They became good at developing structural relations across society, and their criminality became culturally embedded. DM