Issue 177 - African Communist

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Issue 177 - African Communist Powered By Docstoc
					                     African
First Quarter 2009
                     Communist
                           Issue Number 177




WE NEED A MASSIVE
ANC VICTORY, SO THAT
THE PEOPLE, NOT
BIG BUSINESS, CAN
DIRECT THE ECONOMY!
                   African
                   Communist
3    EDITORIAL NOTES: Ensure an overwhelming ANC elections victory
5    CC POLITICAL REPORT: Taking forward the South African road
     to Socialism
17   CAPITALISM’S CRISIS: The current financial crisis and possibilities
     for the Left: Jeremy Cronin
31 COMMENTARY: On Jeremy Cronin’s Joe Slovo Memorial Lecture:
   Patrick Bond
39 CAPITALISM’S CRISIS: South Africa’s collective response: Nedlac
51   CAPITALISM’S CRISIS: Key challenges facing the working class
     movement and our government: Rob Davies
57 CAPITALISM’S CRISIS: We were equally ill-prepared for the crisis:
   Ben Turok
61 KZN PEC REPORT: Capitalism’s crisis proves Socialism’s relevance:
   Themba Mthembu
68 CAPITALISM’S CRISIS: World capitalism poses greatest threat:
   World Socialist Web Site
71   BOOK REVIEW: Timeless, instructive intervention in the
     economic policy debate: Oupa Bodibe
74 THE MEDIA:Too many capitalist voices, no working class voices:
   David Niddrie
82 COPE: The unusal life of Mr Terror Lekota:
   Dan Sechaba Montsitsi

The African Communist is published quarterly by the South African Communist
Party as a forum for Marxist-Leninist thought
Send editorial contributions to: malesela@sacp.org.za, or to
African Communist, PO Box 1027, Johannesburg 2000
                          AFRICAN COMMUNIST | April 2009

EDITORIAL NOTES

Global crisis – now more than
ever, ensure an overwhelming
ANC elections victory
Other parties want to hand our future to the big corporations
that control the markets




I
      n the middle of last year, the SACP          derstanding that they would repay these
      warned against local complacency             loans from the gains that they would
      about the global economic crisis. At         make over five or six years on dividends
      the time, the dominant line from             and, especially, on the increased value of
      the majority of economic commen-             their shares. Clearly, this arrangement
tators, and even from within govern-               was based on the assumption that the
ment, was that we were “relatively well            stock market basically always goes up.
insulated”. In particular, it was said that          With the global crisis and with billions
our financial sector was well regulated            of rands now wiped off the value of the
and we were therefore not exposed to               Johannesburg Securities Exchange, some
the kinds of toxic liability (like sub-            80% of these narrow BEE deals are un-
prime loans) that had precipitated the             der the water. To cite just one recent ex-
crisis.                                            ample: Late last year, Barloworld an-
  As the SACP pointed out last year, well          nounced the “acquisition” of 10% of its
ahead of most commentators, this rela-             share capital by black participants. This
tive complacency was based on at least             involved taking on debt of some R2,4-
two major illusions:                               billion – half of which was debt raised
  Firstly, there are, in fact, serious vul-        by Barloworld, and half of which was
nerabilities in our financial sector. In our       raised by the BEE consortium through
case, the vulnerabilities are not so much          local financial houses. At the time of the
related to a lack of regulation but, para-         deal being concluded, Barloworld shares
doxically, they are the result of active           were valued at R83, by the end of March
government policies. A key pillar of the           this year they had crashed to under R34.
1996 Class Project was to promote a new              Government, correctly, has said it will
black capitalist class. But this aspirant          not use public money to bail out the in-
capitalist stratum was made up of “cap-            dividuals or the companies involved.
italists without capital”. And so, with            Most of the companies and banks af-
the complicity of established white cap-           fected seem to be moving towards “re-
ital, “highly geared” (i.e. highly in-             structuring” arrangements – deferring
debted) arrangements were made. For                the repayment of debt, presumably on
example, narrow BEE capitalists were               the assumption that sooner or later the
“given” shares in companies on the un-             JSE will recover dramatically.
                                               3
                          AFRICAN COMMUNIST | April 2009

   Whatever the eventual fate of these              force, and not a reality dominated by the
deals, the fact is that there are now bil-          rich and powerful.
lions of rands tied up in debt. This debt             The ANC-led Alliance’s election man-
is on the books of companies and banks.             ifesto commits us to building a more ef-
It is capital that could, otherwise, have           fective, democratic, developmental
been used for productive investment, job            state. The opposition parties spend all
creation and development.                           their time pointing to weaknesses in the
   If the first illusion prevailing last year       state (some real, some fabricated), not in
in SA was that our financial sector was             order to contribute to correcting these
sound, the second, and even greater, il-            weaknesses, but in order to celebrate
lusion was that we were dealing with a              them, sow demoralisation and hand
global financial crisis. But it was never           over our future to the markets and the
just a financial crisis. While financial            big corporations that control them.
crashes in the US provided the catalyst,              While the ANC-led campaign focuses
we are dealing with an all-round eco-               on jobs, health-care, education, rural de-
nomic crisis. Predictably (and the SACP             velopment and fighting crime and cor-
predicted it), the financial crisis in US           ruption – the opposition campaigns are
and European banks soon fed into the                focused on personalities, celebrating
productive economy not just of those                petty scandals, visas for Dalai Lamas,
zones, but into the global system as a              and the general melodramas of palace
whole. Already, by the beginning of this            politics.
year, 20-million migrant workers in                   Let us ensure, once more, an over-
China, for instance, had lost their jobs,           whelming ANC-led election victory on
along with millions more.                           April 22. Responding effectively to the
   By the last quarter of 2008, SA’s own            impact on our country of the global cri-
GDP growth was in negative territory,               sis requires a concerted, patriotic re-
and we are now almost certainly in a                sponse. It requires the maximum mobil-
technical recession. Already tens of                isation of our people and our resources.
thousands of jobs have been lost in the             Only the ANC-led movement can pro-
mining, auto and, indeed, virtually all             vide the required leadership and capac-
productive sectors of our economy.                  ity. The larger the ANC electoral victory,
   While we are in the midst of this crisis,        the stronger the ANC, the better able it
we are also embroiled in an election                will be to respond effectively to the
contest. With the exception of the ANC-             global crisis.
led movement, none of the other politi-               Now, more than ever, we need an
cal parties has much, if anything, to say           overwhelming ANC election victory on
about the huge economic challenge fac-              the basis of a clear programme that fo-
ing SA and the world.                               cuses on a state-led, developmental re-
   Opposition parties seem to think that            structuring of our economy – restructur-
sooner or later things will return to               ing that prioritises preservation and cre-
“normal”. Meanwhile, government                     ation of decent, sustainable jobs.
should do as little as possible, leaving              Together we can – and must – do
the economy to the market – as if the               more! Forward to an ANC-led election
market were an independent natural                  victory on April 22!                    ★

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                        AFRICAN COMMUNIST | April 2009

CC POLITICAL REPORT, FEB 2008

Taking forward the South African
road to Socialism
The threats and opportunities facing South Africa
post-Polokwane and after the 2009 elections




T
            he primary objectives of this       sive occurred at Polokwane. But was it
            Central Committee is to dis-        an historical rupture? It is obvious that
            cuss four interrelated issues       the Mbeki “political centre” of the 1996
            and challenges facing our           class project has lost its hegemony
            Party now and into the im-          within the ANC and its broader move-
mediate future. These are:                      ment. A spell has been broken. But the
  Elections                                     actual nature of the rupture and its im-
  Tasks post-elections, including our           plications remain a contested reality.
2009 Programme of Action                          “The dominant contradiction, which
  Current economic crisis and challenges        immediately rallied together different
  Some key transitional issues                  class forces within the ANC- liberation
  On the question of elections we need          movement, in the post-2005 conjuncture
to emphasise the need to                                has been centralisation of power
scale up our elections work                             by the state presidency, and a
after this CC in our provinces,                         marginalising rather than a unit-
districts and branches in order                         ing style – key pillars but not the
to ensure an overwhelming                               only pillars of the 1996 class proj-
electoral victory of the ANC                            ect. Indeed it is rejection of this
in the forthcoming elections.                           “political centre” and its style
To this end we have a dedi-                             which acted as a magnet to pull
cated session to discuss the                            together different class and other
elections in this CC.                                   forces within the movement”.
                                                  In that Political Report we continued
The post-Polokwane                              to pose the challenge for ourselves thus:
challenges and beyond                             “Depending on which class forces are
The 14 months since the watershed ANC           able to build effective organisation, mo-
Polokwane conference has gone past. It          bilise unifying programmes of action,
can be argued that for most of our polit-       and present a coherent ideological un-
ical discussions over the past year we          derstanding of our challenges, the move-
have discussed the many challenges fac-         ment may begin to take a serious left-
ing the SACP after Polokwane, including         turn and/or lay important conditions for
threats and opportunities to both the           such a shift. Or it might stagnate, or
ANC and the SACP.                               even taken a further rightwards shift”.
  “Clearly, something potentially deci-           It is therefore important, especially in
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                         AFRICAN COMMUNIST | April 2009

the light of the elections just over 7           an untenable ‘two centres of power’
weeks from now for this CC to reflect            arrangement. Further, there were no ad-
again on where our movement is and               equate engagements with our allies and
the challenges facing the Party after            other key role players in the continent
these elections.                                 and the world to explain this decision.
  Over the last 14 months we can note              The development of list processes, es-
some important advances that have laid           pecially in provinces, also revealed the
a firm basis for pursuing a working class        persistence of actions not dissimilar to
led, radical national democratic revolu-         those of the 1996 class project, including
tion. On the positive side, we can note          tendencies to want to marginalise the
the two highly successful Alliance sum-          allies. This is a reflection of the fact that
mits that also laid the basis for more           despite the enormously improved al-
convergence in producing the ANC’s               liance functioning at national level, in-
election manifesto. The recall of Presi-         cluding the establishment of the Alliance
dent Mbeki, in our view, also laid a basis       Political Council, the situation remains
for facilitating a smooth transition be-         highly uneven at subnational levels, thus
tween the current and the incoming ad-           requiring serious attention.
ministration.                                      We are still in a highly fluid political
  The joint development of the ANC’s             situation both inside and outside our
Election Manifesto was a further posi-           movement, including intensifying class
tive development, including the formal           struggles about the direction of our
inclusion of alliance partners in the de-        movement and the country. The resur-
velopment of the list processes for can-         gence of ‘rooi gevaar’ in the media is but
didates for parliament and the legisla-          one reflection of the extent to which
tures. We have also witnessed parlia-            various class forces are positioning
ment, albeit unevenly, showing some              themselves to contest the direction of
fresh assertiveness in a number of areas,        our movement and country. It is impor-
in a manner that we have not seen for            tant that we pay even more attention to
more than a decade, especially in rela-          working class mobilisation as these
tion to our own movement.                        struggles will begin to crystallise once a
  A key challenge for the SACP is to             new government is installed.
build upon this momentum beyond the                Our 2009 PoA, and our activities be-
election, and ensure that these positive         yond that, must also locate itself within
advances are not rolled back.                    the context of contemporary domestic
  However, it has not all been plain sail-       and global challenges. The immediate
ing. The recall of President Mbeki was           political conjuncture, likely to be domi-
not as adeptly handled as we would               nant scenario for some few years to
have liked. A lot of gaps emerged, some          come, is that of the ANC’s commitment
of whom may still require closer atten-          to a progressive Election Manifesto, also
tion. For instance we were coy in fully          informed by agreements reached at our
explaining the reasons for the recall, in-       two Alliance Summits in 2008, and the
stead tending to link it to the Nicholson        current global capitalist meltdown.
judgment, rather than boldly describing            It is indeed true that some of the
it as a proactive political intervention         ANC’s commitments as contained in its
aimed at breaking what was becoming              manifesto are liable to be undermined
                                             6
                          AFRICAN COMMUNIST | April 2009

by the trajectory of the current global            Deepen mass work among the people
capitalist crisis, and therefore a degree of         The SACP must intensify the mass
flexibility will be required to ensure that        work amongst the workers and the poor
we minimise its negative impact. But at            of our country, and continue to build on
the same time the current global capital-          the many campaigns and achievements
ist crisis does provide potential opportu-         on this score, especially since 2000. The
nities to drive a radical developmental            election campaign will greatly assist us
agenda, especially a progressive indus-            in intensifying mass work and it is also
trial policy, state-led investment initia-         for this reason that we must not com-
tives into both our infrastructure and             pletely demobilise our structures after
into the productive economy – elements             the elections, but redirect these energies
that are already contained in the ANC              towards mass mobilisation during 2009.
Manifesto.                                           An additional task for the SACP is that
  The improved relations and coherence             of contributing towards strengthening
at alliance level, especially in relation to       the ANC as a mass movement with a
policy perspectives and immediate chal-            working class bias. Priority in this regard
lenges place additional responsibilities           is also to ensure that the ANC does not
on the role of the SACP in the current             completely demobilise after the elec-
period. In addition the post-electoral pe-         tions, as has been the case before, but to
riod is likely to raise new challenges for         use the election campaign as a platform
the SACP, thus requiring a much more               to strengthen the role and capacity of
focused attention on strengthening the             the ANC to lead mass struggles and
SACP as a vanguard party of the work-              campaigns on the ground. Therefore it is
ing class in the national democratic rev-          important to approach elections work
olution.                                           not solely for purposes of winning the
                                                   elections only- important as this is- but
Building working class hegemony                    to build the mobilisational capacity of
in all key sites of power: Some key                our movement as a whole beyond the
challenges for the SACP in 2009                    elections.
and beyond                                           But our mass work, in order to be in-
Our 2009 Programme of Action (PoA) is              dependent, must not be exclusive, but
informed by, and aims to take foward               inclusive. This means, amongst other
our 2007 Party Programme – The South               things, that the SACP must seek to work
African Road to Socialism - and the                in all our communities, especially within
medium term vision contained therein.              the black majority of the workers and
Our medium term vision is that of build-           the poor of our country. In carrying out
ing working class hegemony in all key              this work we must earnestly work in
sites of power, principally in the state,          collaboration with a whole range of (po-
the economy, the workplace, the com-               tentially) progressive community organ-
munity, ideologically and in the interna-          isations and initiatives and seek to pro-
tional sphere.                                     vide strategic and programmatic leader-
  Given the above realities and challenges         ship.
our 2009 PoA must assist the SACP to                 Related to the above, it is urgent for
carry out the following key cross-cutting          the SACP to revisit one of its very impor-
challenges in 2009 and beyond:                     tant programmes, that of building a vi-
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                          AFRICAN COMMUNIST | April 2009

brant, progressive co-operative move-              Revolutionary governance
ment. It is indeed disturbing that the             For the SACP to strengthen its vanguard
very good work we initiated on this                role in our revolution, we perhaps need
front is now being appropriated by other           to pay more attention to matters of gov-
class forces, who have no interest in              ernance than we have done before by,
building a co-operative movement, but              amongst other things, building our insti-
see this as a further site for narrow BEE          tutional capacity for policy development
accumulation.                                      and evaluation. We however need to re-
  Perhaps, we need to re-prioritise our            mind ourselves that governance must
work in this front and place the building          not be reduced to government ‘deliver-
of a progressive financial co-operative            ing’ services to a passive population, but
movement as a key foundation for                   crucially involves the mass mobilisation
building a broader co-operative move-              of the working class and our people as a
ment. In this regard we need to engage             whole to drive a revolutionary agenda
with the trade union movement closely,             on governance.
as it is the progressive trade unions that           In the past we have tended to be dis-
have the muscle and capacity to give               tracted from the centrality of this task
content to this programme.                         post-1994 mainly because of the huge of-
  Related to this is the need to incorpo-          fensive by the 1996 class project to mar-
rate the building of a large co-operative          ginalise us from governance matters, of-
movement at the centre of the current              ten putting us on a defensive mode of
discussions underway in Nedlac about               engagement with governance and policy
how to respond to the current global               issues. With the changed climate within
capitalist crisis. It is also clear that the       the alliance, there is now an opportunity
building of co-operatives still remains a          to be more systematic and aggressive
peripheral matter in the thinking and              about this.
programmes of government. We need to                 But even more important is the fact
ensure that in the restructuring of gov-           that the spaces that have opened since
ernment that is being proposed, includ-            Polokwane will not, in themselves, ma-
ing the establishment of a planning                ture into a more radical NDR. This
commission, the issue of co-operatives is          therefore requires that we develop our
also prioritised. There is truly huge po-          own internal policy capacity in a manner
tential to build a co-operative move-              that will advance our goal of building
ment to be an important pillar in our              working class hegemony in key sites of
economy, and to this end to also call for          power. Strengthening this capacity must
an immediate establishment of a Na-                of necessity include building some full-
tional Co-operatives Development                   time capacity to co-ordinate and drive
Agency, as part of harnessing state re-            this work. The most immediate platform
sources towards our objectives in this             for strengthening our policy work must
regard.                                            be to track the implementation of the
  The building of a progressive co-oper-           Manifesto and giving policy content to
ative movement is a key component of               our campaigns.
taking forward SACP work amongst the                 Later during this CC meeting we will
people.                                            also be raising some of the key transi-
                                                   tional issues, as well as matters relating
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                         AFRICAN COMMUNIST | April 2009

to deployment, that must be taken into           Constitution, South African Road to So-
account as we move towards a new ad-             cialism and on the politics and objectives
ministration. We also need to take this          of our campaigns. Part of our ideological
opportunity to congratulate Satawu for           work must centrally be anchored
the initiative it has taken in exposing          around intensified work in the working
(possible) corruption at the SAA. This is        class, but also to extend this to identify
a role we must seek to foster in the trade       our attitude and approach towards es-
union movement if we are to build                pecially the growing black middle
working class hegemony in all key sites          classes, and even how to engage the
of power, as well as to combat looting           emerging black sections of the bour-
and corruption in the state and private          geoisie around a progressive develop-
sector.                                          mental agenda. In other words building
                                                 the SACP as a vanguard Party also
Intensify ideological work                       means reaching out beyond our natural
Like never before since 1994, we need to         constituency into other class forces in
intensify ideological work, especially in        society, with a view to making our im-
two areas: political education and me-           pact felt even in those.
dia. Once more we need to fully inte-               It is clear that bourgeois media as well
grate political education and media              as the public broadcaster have adopted
work in all our activities and pro-              an increasingly hostile attitude towards
gramme. Our media work must still be             the ANC and the Alliance. This hostility
two-pronged; strengthening our internal          is likely to increase as the election cam-
media (African Communist, Umsebenzi,             paign deepens. The media is increasingly
online publications, etc) and external           becoming a carrier of smear campaigns,
media work (engaging the public broad-           principally directed at the leadership of
caster, capitalist print media, and ensure       our movement and less about the many
that ideas in our own publications are           policy issues that are on the table at this
able to reach the broader working class          point in time. This CC might want to re-
and beyond).                                     flect on this and come up with appropri-
  We must congratulate our media team            ate strategies and measures, especially
for a highly successful media workshop           with regard to focusing the attention of
whose results will hopefully lead to a           our country on key policy issues.
more systematic approach to our media
work. This was by all accounts one of            Special Congress and the post-
the best workshops the SACP has held             elections terrain
in recent years, and a more detailed re-         The Politburo proposes that we convene
port will be tabled later on this. We need       our Special Congress before the end of
to build upon the knowledge and in-              2009, as part of undertaking a compre-
sights gained from this workshop to              hensive analysis and taking stock of the
train our own communist ‘journalists’            post-Polokwane and post-electoral real-
and writers, and seek to create appropri-        ities and the challenges these pose for
ate networks with communist and other            the SACP. The Special Congress must
left wing groups on the media front.             also be another platform for identifying
  On political education, we need to aim         some of the key immediate challenges in
to induct all our members on the SACP            strengthening the vanguard character of
                                             9
                         AFRICAN COMMUNIST | April 2009

the SACP in the new conditions. Just as           needs to ensure that it advances a per-
we did during our 2005 Special Con-               spective on the reconstruction of Zim-
gress, the 2009 Special Congress must             babwe that includes an end to political
focus on the nature of class struggles            detentions and immediate release of all
taking place in broader society, but un-          detainees and others facing trumped up
derstand these within the context of              charges; a reconstruction programme lo-
their impact on our own movement, and             cated within economic reconstruction
the challenges all these pose.                    and integration in SADC; arresting the
                                                  predatory intentions of South African
Our internationalist tasks                        capital, including any attempts to slice
It is also going to be important to aim to        the Zimbabwean economy between
strengthen our capacity to systematically         competing BEE interests, thus turning it
undertake international work, including           into some kind of economic colony of
strengthening full-time capacity at head          South Africa. Most importantly we need
office on this work. An immediate chal-           to ensure that the region acts together to
lenge is that of taking forward our work          try and prevent an imperialist economic
on building the African Left Network.             scramble for Zimbabwe.
   This Central Committee must also re-             Once more this means that we need to
flect on current developments in Zim-             increase our solidarity activities and con-
babwe and come up with concrete pro-              tacts with all the key role-players in that
posals on how to engage with the                  country, with a view to contributing to-
unfolding situation there. The SACP               wards a consensus on a progressive pro-
should support the establishment of a             gramme of reconstruction and develop-
government of national unity as the only          ment.
way forward towards finding a perma-                The SACP, as a matter of urgency,
nent political solution to that country’s         needs to intensify its work and seek to
problems.                                         place on the public arena the clearly de-
   However, supporting this government            teriorating political situation in Swazi-
in Zimbabwe does not mean that we                 land. We need to openly challenge the
must be blind to the many complex                 Swazi government on its continued at-
challenges and serious deficiencies in            tempts to turn Cosatu House as a scape-
this arrangement. It is completely unac-          goat for its own failures to democratise.
ceptable that illegal political detentions          It is on this note that we should now
and arrests continue whilst at the same           turn into the current global capitalist cri-
time trying to forge a national consensus         sis and its implication for our country.
towards establishment of a democratic
order and the reconstruction of Zim-              Capitalism’s crisis …
babwe.                                            but who will pay for it?
   Another key challenge in this regard is        We are in the midst of the worst global
the type of economic relations we should          capitalist crisis since the early 1930s.
seek to forge as part of rebuilding the           Banks (like the century-old Lehman
economy of that country. Currently gov-           Brothers in the United States) that were
ernment seems to be engaging on this              supposed to be “too big to fail” have
matter without any involvement of any-            evaporated into thin air, leaving behind
body outside government. The SACP                 a trail of toxic debt. Other banks (like
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                          AFRICAN COMMUNIST | April 2009

Northern Rock in the UK) have had to                where) would catapult the South African
be rescued through “nationalisation”                economy into sustained 6% growth –
bail-outs.                                          provided, of course, we created “an in-
  It is a crisis that began in the financial        vestor friendly climate”. The neo-liberals
sector of the core economies of global              boasted that capitalism had finally over-
capitalism. But it is no longer only a fi-          come its tendency to have booms and
nancial crisis – it is an all-round eco-            busts. From now on, we were led to be-
nomic crisis striking at the heart of cap-          lieve, it was upwards ever, backwards
italist production itself. Recession has            never.
become the global norm. Tens of thou-                  That bubble has burst. The bottom of
sands of mines and factories are closing            the global recession is still far from being
down or operating far below capacity.               reached. Tens of millions of more jobs
More than twenty million jobs have been             will be lost around the world. More firms
shed in the past three months in China              will go belly up. As with all previous
alone.                                              global capitalist crises, there will be no
  This crisis is not an accident. Nor is it         recovery until there has been the mass
merely the result of capitalist greed, or           destruction of value. Capitalism can only
management corruption, or bad deci-                 recover from its serious busts through
sions taken by the US Federal Reserve.              the wholesale destruction of accumu-
There has been plenty of greed, corrup-             lated capital – the destruction of firms,
tion, and many bad decisions. But the               share-values, savings, and jobs.
present crisis has its roots deep in the               It is capitalism’s crisis…but who will
very nature of capitalism itself.                   pay for it?
  For more than thirty years, there have               In one sense, the whole of humanity is
been falling rates of profit in the core            already paying for it. But in the coming
economies of the capitalist world (no-              weeks, months and years an intensified
tably the US). This has led to growing fi-          global class struggle will determine who
nancialisation of these economies, as               carries the major burden. Class struggle
capital was taken out of production and             will also determine the trajectory with
into speculative activity.                          which the world finally emerges from
  Over the last decades, world capitalism           this crisis. Will it be a more socialist-ori-
has been structured around an unsus-                ented and environmentally-friendly tra-
tainable reality:                                   jectory based on human need? Or will it
  • the mass production of commodities              be back to square one, only to repeat
for export in the key semi-peripheral so-           the same boom and bust cycle? Will it be
cieties – notably the cheap labour                  a descent into barbarism?
economies of China and India - and                     In this regard, we should never forget
reckless oil extraction in Third World              that capitalism only emerged from the
states, on the one hand; and                        last great global crisis (1929-early 1930s),
  • unsustainable consumption levels in             by plunging the world into war. Faced
core capitalist countries, propped up by            with deep recession in the early 1930s,
financial bubbles of all kinds, especially          many leading capitalist countries chose
in the United States, on the other hand.            national re-armament, military expan-
  This was the global “engine of growth”            sionism, and fascist barbarism as their
that we were told (in Gear and else-                “stimulus packages”. It was only out of
                                               11
                         AFRICAN COMMUNIST | April 2009

the ruins of the ensuing second World              rest, protests and mass action in Greece,
War, that a crisis-ridden global capital-          Russia, Latvia, Great Britain, France,
ism was finally able to embark upon its            China, South Korea, Guadeloupe (a
golden era of sustained growth (1945 -             month-long general strike), Reunion,
1973).                                             Madagascar, Mexico and Ireland. In a
  The major “stimulus” packages cur-               hitherto slumbering Iceland, popular
rently being announced in the developed            protests have brought down a neo-lib-
capitalist countries fortunately do not            eral government.
yet show signs of a flirtation with fascist          What are the threats and challenges
barbarism. They represent, rather, an at-          we face in SA? How are we responding?
tempt to rescue national capitalist firms          Is our recently announced budget an ad-
and national living standards. While               equate response? And what of the
some of the pain is spread across these            framework plan to confront the interna-
societies, the rescue packages are essen-          tional crisis, announced jointly by gov-
tially about baling out capitalist compa-          ernment, the unions and business?.
nies, while the debt is placed onto the              One thing, however, is clear. We must
shoulders of the public (and particularly          vigilantly assert one basic principle: we
future generations of Americans, etc.)             will not allow the workers and the poor
This is the meaning of bank “nationali-            once more to bear the brunt of capital-
sations”. They are the socialisation of            ism’s crisis!
debt. They are conceived of as temporary
interventions to ensure liquidity in the           How should SA respond
national market. The intention is to hand          to the capitalist crisis?
back these banks to the private sector             Official confirmation that 36,500 jobs
when profitability is restored.                    have been lost in the mining and auto
  A second leg of these “stimulus” pack-           sectors since last July, and that SA’s
ages is major national protectionist               economy shrank by 1,8% in the last
measures for national industries (and              quarter of 2008 – the biggest drop in 16
national jobs). Productive investments in          years – have underlined the point the
the South are being withdrawn, already             SACP has been making consistently. De-
paltry aid packages are diminishing, and           spite boasts that we were still hearing
market access for commodities from the             just a few months ago, SA’s economy is
South are further restricted.                      actually very vulnerable to the present
  However, it is doubtful whether these            global crisis.
various stimulus packages will actually              It is true no economy in the world is
succeed in restoring profitability to the          likely to escape the negative effects of
heartlands of capitalism. They are cer-            the meltdown. It is also true that SA is
tainly not addressing the underlying               not the most vulnerable of economies.
structural problems in the global capital-         Nonetheless, we have a degree of expo-
ist economy.                                       sure that could have been considerably
  But, while the capitalist class still has        less if correct policies had been pursued
the upper-hand in the developed centres            after 1994. Much of the blame for our
of capitalism, popular forces are stirring         current exposure must lie with the fail-
across the globe. Just in the last several         ure to transform the systemic features of
weeks, we have seen major popular un-              SA’s capitalist economy.
                                              12
                         AFRICAN COMMUNIST | April 2009

  For over a hundred years, the SA econ-           ment in our country, particularly in the
omy has been excessively dependent on              critical labour-intensive manufacturing,
primary commodity exports. This de-                small-scale farming, and service sectors.
pendence has been driven by (and has               What is more, the foreign investments
resulted in) a very high level of concen-          that we have tended to attract have
tration and dominance over our econ-               been largely speculative “hot money”.
omy by the big mining houses, closely              To further create an “investor friendly”
linked to the major financial institutions.        climate we have also liberalised our
This is what we refer to as the domina-            trade regime (far beyond what was re-
tion by the “mineral-energy and fi-                quired of developing countries), and we
nance” complex. This high level of con-            have relaxed exchange controls (26
centration and domination has served,              times since 1996), leaving only residual
generally, to choke off effective and bal-         control measures in place.
anced development in our manufactur-                  All of these interventions, which were
ing sector. As a result, our economy is            designed to attract foreign capital into SA,
also excessively reliant on imports of             have tended to have the perverse effect of
luxury goods and capital goods (ma-                encouraging major SA companies to disin-
chinery and technology).                           vest out of SA, to de-list from the JSE, or to
  Despite SA’s relative levels of develop-         establish secondary listings in London and
ment, we have many of the features of              New York. At present, the major contribu-
a classical neo-colonial economy. We are           tor to our current account imbalance is not
highly exposed to volatility in the “com-          so much our imports, but the major out-
modity” markets (i.e. on global demand             flow of dividend payments to sharehold-
for our minerals – gold, platinum, iron            ers in the US, UK, Europe, etc. This prob-
ore, coal, etc.). When there is global re-         lem is now being made worse by the out-
cession, our exports and our job market            flow of “hot money” from all developing
are heavily hit, as at present. But even           economies (including SA) back to the de-
when there is a commodity boom (as                 veloped economies. This, too, is perverse.
there has been over the past several               It is, after all, the economies of the ad-
years), growth in the SA economy sucks             vanced capitalist countries that are partic-
in luxury and capital goods imports.               ularly affected by the present recession. It
And, since the terms of trade between              underlines the fact that, despite all the
primary commodities (which we export)              rhetoric about “free markets”, and global
and luxury and capital goods (which we             liberalisation, imperialism remains a dom-
tend to import) are largely unfavourable           inant reality. When the chips are down, the
– our trade balance has long been a                major US and UK financial institutions
point of serious vulnerability, even in            headquartered in the North pull-back and
good times.                                        seek to save their own economies first.
  To compensate for this balance of pay-
ments vulnerability by attracting foreign          Where does that leave us now?
money into SA, the Reserve Bank and                The very first step is to acknowledge
Treasury have maintained relatively                that, despite so-called “unprecedented”
high interest rates. But these relatively          and “sustained” growth since 1994, and
high interest rates have, in turn, further         despite the recent global commodity
served to constrain economic develop-              boom, the growth path upon which our
                                              13
                          AFRICAN COMMUNIST | April 2009

economy has been located over the past              liance, we have begun to see important
15 years has failed. It has failed to create        policy shifts in government. In particu-
jobs in sufficient numbers. And it has              lar, there is now an appreciation that the
failed to dent the legacy of gross in-              democratic state has to be an active
equality in our country. It has left us vul-        player in the economy – as a planner
nerable.                                            and as a leader in developing an indus-
  Faced with the crisis we have to follow           trial policy (working together with social
a two-track approach:                               partners in what is a mixed economy);
  • We need to introduce immediate de-              as an investor through the budget and
fensive measures; and, linked to these              through development finance institu-
  • We need to pursue an offensive strat-           tions (like the DBSA, Land Bank, and
egy that begins, progressively, to trans-           IDC); as a job creator and employer; and
form our neo-colonial capitalist growth             as a driver of infrastructure investment
path.                                               through strategic SOEs. Economic devel-
                                                    opment and transformation cannot be
Defensive measures                                  abandoned to market whims.
The Nedlac Task Force’s “Framework for                 This is what we mean by a democratic
a South African response to the interna-            developmental state in the South
tional economic crisis” begins to provide           African reality.
an important outline of immediate defen-               And it is this kind of developmental
sive measures. We will need to consider             state – that we are now beginning to see
some financial assistance to key strategic          in practice – that is protecting the SA
industries, in exchange for firm commit-            economy from the very worst of the
ments to job protection. However, we                global melt-down. It is no accident that
simply do not have the resources to re-             the key sector of sustained growth in an
motely match the scale of bail-outs in the          otherwise generally gloomy South
advanced capitalist countries.                      African picture remains construction –
  Instead, as the Nedlac Task Force                 thanks to our massive state-led infra-
recognises, we will need to focus largely           structure programme.
on non-financial support measures,                     It is also no accident that this year’s
among them:                                         budget has a strategic orientation that is
  • Trade remedies – tough anti-dump-               different in emphasis from the “stimu-
ing measures; countervailing duties; ju-            lus” packages emanating from the US
dicious application of new tariffs (for             and other developed economies. Our
which there is space in terms of WTO                2009/10 budget seeks to sustain major
rules); more vigorous policing of our bor-          infrastructure spending over the coming
ders to deal with illegal imports;                  years. It envisages a major increase in
  • Vigorous promotion of the Proudly               public sector employment (teachers,
SA Campaign – and securing procure-                 health-workers, police), and the massifi-
ment agreements in terms of it.                     cation of the expanded public works
                                                    programmes. It also commits to sustain-
Offensive measures – transforming our               ing and extending the already extensive
growth path                                         (if patchy) social security net.
Fortunately, as a result of protracted                 In the advanced capitalist countries,
struggles from within the ANC-led al-               the political response to the meltdown is
                                               14
                          AFRICAN COMMUNIST | April 2009

fundamentally to rescue failing compa-              of clarity on the transformation of our
nies by providing greater state-backed              productive economy is further deepened
liquidity. There, governments are step-             by some of the more general strategic
ping in as “lenders of last resort”. In SA,         points announced by cde Manuel in his
the emphasis is on the state as a “pro-             budget speech. For instance, he said the
ducer” and even as an “employer of last             budget was guided by “five enduring
resort”. For the SACP, we hope to con-              principles” – the fourth of which was:
solidate this trend, pointing out the ap-           “Addressing the barriers to competitive-
propriate lessons to be learnt from the             ness that limit equitable sharing oppor-
current global capitalist crisis and its im-        tunities”. Certainly, the collusive and/or
pact on our society. In the longer run,             market-dominant, rent-seeking conduct
only a socialist economy will be able to            of the big corporations in our country
place SA on a sustainable development               (particularly those in the mining, finan-
path. And a socialist economy is one in             cial, energy and agro-processing sectors)
which the broad public sector (including            has reinforced our neo-colonial growth
cooperatives) is the producer and em-               path. This “uncompetitive” behaviour
ployer not just of last resort, but increas-        has certainly undermined labour-inten-
ingly also of FIRST resort.                         sive light manufacturing and small farm-
  There are welcome policy shifts, but              ing, for instance. The work of the Com-
are they enough?                                    petition Commission is important in this
  In generally welcoming the 2009/10                regard. But it would be a grave error to
budget, as the SACP has, there are also             reduce industrial policy to “addressing
some flashing red-lights that we need to            the barriers to competitiveness” as
heed. While Cde Manuel’s budget                     Treasury sometimes tends to do. It
speech struck many positive notes about             would be an even greater error to imag-
getting the productive economy, includ-             ine that a more competitive environ-
ing agriculture, working more effectively,          ment would somehow create a more eq-
some of the broad spending trends sug-              uitable and sharing society.
gest a different story.                               Are we actively transforming our neo-
  The budget allocation for the Depart-             colonial growth path…or getting ready
ment of Trade and Industry actually de-             for the next commodity boom?
creases (2008/9 – R6,36bn, versus                     We have to use the current crisis as an
2009/10 – R5,7bn), and that of agricul-             opportunity to place SA on a radically
ture is also marginally down (2009/9                transformed growth path – in which
–R2,82bn, 2009/10 – R2,79bn.)                       there is:
  Admittedly, headline figures like these             • A much more balanced development
do not necessarily tell the full story. A           across sectors, with a particular empha-
decrease might mask the reallocation of             sis on labour intensive sectors like light
funding to more strategic programmes                manufacturing, small farming, and low-
within departments. In the case of agri-            end services;
culture, a revamped and dynamised                     • A greater focus on our domestic and
Land Bank should be able to spur trans-             regional market;
formation with funding that is off the                • A greater focus on South-South
national budget, for instance.                      trade;
  Nonetheless, concern about the degree               • A preparedness to introduce trade
                                               15
                         AFRICAN COMMUNIST | April 2009

and financial measures that protect our           stance, to state-led infrastructure devel-
own key sectors – including tariffs,              opment fundamentally about the trans-
tighter control over importers, and more          formation of our historical, neo-colonial
effective financial flow controls (includ-        growth path? Or are we building rail-
ing speed-bumps on the movement of                lines, airports, freeways, ports, electric-
hot-money and dividend payouts to for-            ity-generation capacity, and publicly-
eign shareholders).                               owned oil refineries so that we are ready
  • A comprehensive and critical review           to offer a “competitive” environment to
of the compradorist and parasitic fea-            the same bunch of multi-nationals when
tures of narrow BEE. Some 80% of BEE              the next commodity boom comes
deals are now under the water as pro-             around?
jected dividend and share-value earn-               It is not clear that a vision of long-term
ings have crashed. Many of these deals            transformation is yet sufficiently shared
have the makings of a local sub-prime             within our country, or even within our
crisis.                                           Alliance. The consolidation and imple-
  • A macro-economic policy package               mentation of a coherent transforma-
that supports this overall strategic focus        tional economic programme has now
and ensures longer-term sustainability.           become the critical challenge of our
  In welcoming the many important                 time.
shifts that have occurred in economic               This is a capitalist crisis – our answer is:
policy, we need to continue coming back           together, let us transform SA’s neo-colo-
to the underlying strategic question –            nial capitalist growth path!
what exactly are we trying to do?                   Socialism is the future … together, let us
  Is our continued commitment, for in-            begin to build it now!                     ★




                                             16
                         AFRICAN COMMUNIST | April 2009

CAPITALISM’S CRISIS

The current financial crisis
and possibilities for the Left
This paper was presented by Jeremy Cronin at the
Joe Slovo Memorial Seminar in January 2009




I
      n 1906 a gifted young South African            The next phase of accelerated imperi-
      studying in the United States won            alist globalisation was to occur in the
      first prize in a Columbia University         mid-1970s through to the present. Here
      debating competition. His speech             in South Africa, in the mid-1990s, to-
      was entitled “The Regeneration of            wards the tail-tend of this next phase,
Africa” and it began with the assertion:           an incumbent ANC leader was to invoke
“I am an African”. The speech is a re-             the Seme legacy. Sharing the same fun-
markable lyrical hymn to progress. It              damental illusions of limitless progress,
was speaking out of a particular ideolog-          of a new global dawn, Mbeki was even
ical illusion of the early twentieth cen-          given to styling much of his own prose
tury. The speech is dizzy with the sense           on Seme’s youthful speech. Once again,
of huge technological advances, rail-lines         the inability to appreciate the dialectical
traversing continents, the telegraph sys-          character of world capitalism’s trajec-
tem girdling the planet, steam-ships               tory, was to lead Thabo Mbeki (like
crossing the oceans. These advances, so            Seme before him) to gravely misread the
the speaker believed, were finally mak-            global situation, to imagine an “African
ing the world a single and united reality.         renaissance” based on catching up and
The speech then called for an “African             aligning ourselves to the “West”, with
regeneration” that would ensure Africa             the promise of an ineluctable, evolution-
was not left behind in this apparently             ary way forward – “today is better than
marvellous new era that had opened up.             yesterday, and tomorrow will be better
  The prize-winning debater was Pixley             than today.”
ka Isaka Seme, who, less than six years              The illusions of a young Seme more
later, was to be one of the founding fa-           than 100 years ago were, perhaps, under-
thers of the ANC. Re-read more than a              standable and forgivable. Can the same
century later, the speech remains deeply           be said of the grave strategic misreadings
moving. But, as we can now see with the            and errors that proliferated within our
benefit of hindsight, its hopes were to be         own country and movement in the past
shattered and its illusions cruelly ex-            decade? Have we sufficiently appreci-
posed by the white minority colonial               ated these errors and taken adequate
settlement in SA in 1910, by the outbreak          corrective measures?
of a vicious intra-imperialist war in 1914,          The world capitalist system is now in
and by the spectacular global capitalist           the midst of its worst economic crisis
crisis that began in 1929.                         since the early 1930s. To be sure, capital-
                                              17
                         AFRICAN COMMUNIST | April 2009

ism is seldom free of crisis. There have           therefore private profit) and not for so-
been many crises in the recent past –              cial use. In other forms of production
among them Mexico 1982, Japan 1990,                (not least socialism) – over-production
and East Asia 1997/8. But the current cri-         of goods would, in principle, usually be
sis is different in many respects. In the          a cause for celebration, but under capi-
first place, its epicentre is in the core          talism “over-production” (ie more than
zones of capitalist accumulation – the             the market demands – and more than
US, continental Europe, the UK, and                can profitably be sold) triggers a break-
now, increasingly, Japan. It has struck at         down in the system – a crisis of over-ac-
the heart of the financial system. Its             cumulation. This, in turn, requires a
knock-on impact across the world is,               massive wave of destruction of produc-
therefore, much more profound. Given               tive capacity (in the form of retrench-
the intensified global interconnectivity           ments, factory closures, liquidations,
(compared to the 1930s), the speed and             and stock exchange collapses), in order
reach of the knock-on impact is also               to “clear the ground” for the next round
greatly enhanced. While some econ-                 of capital accumulation through growth.
omies will continue to grow (notably               It must be stressed that under capitalism
China) but at a much lower rate (now               “over-production” is not the over-pro-
revised down to a possibly optimistic              duction of products that the mass of the
7,5% for 2009 – the lowest in 19 years),           world’s population often desperately
large parts of the world have already en-          needs 4. It is “over-production” relative
tered into recession, or are poised on the         to “market demand”, i.e relative to what
brink of recession. Tens if not hundreds           can profitably be sold1. Capitalism, for all
of millions of jobs are being lost, homes          its dynamism and robustness, is a pro-
repossessed, businesses liquidated and             foundly irrational system.
value destroyed.                                      In recent times, liberal economists
   Marx was the first to provide a scien-          have boasted that with effective macro-
tific analysis of the boom-bust cycle in           economic modelling and management,
capitalism, which he showed to be en-              together with some supposedly inherent
demic to this mode of production. Crises           self-correcting capacity within capitalist
in capitalism can occur as a consequence           accumulation, we have been able to
of factors extraneous to the accumula-             “transcend” the boom-bust cycles of
tion process – wars, natural disasters,            capitalism. Ricardo Hausman, leader of
social upheavals. However, under capi-             Trevor Manuel’s “Harvard Group”, for
talism (and in contrast to earlier forms of        instance, presented a celebrated paper in
production) wars, natural disasters or             2005 along with a fellow Harvard lumi-
social upheavals are more likely to be             nary. In it, they claimed that financial
the consequences of intrinsic crises               “dark matter” would prevent a big bang
within capitalism rather than the funda-           in the world economy. The failure to be-
mental causes of its crises.                       lieve in this “dark matter”, the authors
   The cyclical pattern of booms and               boasted, made “analysts predict crises
busts are systemically linked to the fact          that, for good reason, remain elusive.”
that capitalism – unlike socialism or pre-         All of these boasts now ring hollow.
capitalist forms of production – is essen-
tially production for exchange (and
                                              18
                          AFRICAN COMMUNIST | April 2009

Booms and busts                                     50 year periods – with booms and grow-
Over the past 500 years of modern cap-              ing profit occurring over a 25-year pe-
italism, it is possible to detect three             riod, followed by another 25-year period
broad (but inter-linked) variants of                or so of generally diminishing rates of
boom and bust, of cycles of rise and fall:          profit, of deepening crisis and decline.
relatively short-term cycles of around a            The present long-term cycle in the world
decade or so. In the recent period the              capitalist system began in 1945, with the
global economy has gone into a slump in             upswing reaching a turning point
1974/5, 1980/2; 1991/3 and 2001/2. In SA            around 1970/3. Since then, globally, we
the last decade of apartheid corre-                 have been in a long downturn – some-
sponded to a domestic downturn/reces-               what longer than normal, partly because
sion and post-1994 we have seen a gen-              capitalist-aligned economists and cen-
eral economic upturn. This upturn is                tral banks and multi-lateral institutions
variously attributed to “sound economic             (like the IMF), believing that they had fi-
policies”, and the “political miracle”, etc.        nally “beaten” recession forever, intro-
While subjective factors like policies are          duced a range of interventions which we
not unimportant, and while the political            can now see have simply temporarily
settlement has been a key ingredient in             displaced the epicentre of crisis into
this upturn, it is important to notice that         semi-peripheral regions, thus delaying
this cyclical upturn has also had an un-            and deepening the full-blown crisis in
derpinning of objectivity related to our            whose midst we now are. Finally, there
particular capitalist accumulation path.            is another, often even longer term cycli-
This local upturn is now likely entering            cal (or rather rise and fall) tendency
into a period of several years of down-             within capitalism:
turn if not actual recession. We obvi-                 There is a geographical shift in hege-
ously make this point to prepare our de-            mony. Marx, Lenin and others following
fences against what is likely to be a po-           them have demonstrated how capitalist
litical discourse in the coming years –             development is characterised by high
blaming the a largely “objectively” (and            degrees of combined and uneven devel-
externally) determined downturn on                  opment. It is a global system charac-
“Polokwane populism”.                               terised by geographical zones of varying
   These shorter term cycles, and their             importance within the accumulation
national/regional characteristics are re-           process – core zones, semi-peripheral
lated to the particular features of a na-           zones, and marginal or peripheral zones.
tional/regional economy, including its              Within this hierarchical system there is
positioning and insertion within the                a tendency for a single zone/region or
global capitalist economy, and, therefore,          country to emerge as the dominant
they are not unrelated to longer-term               hegemon. Over the past 500 years, if we
cycles in the world system These long-              are to begin in what was still largely
term cycles at a global level are some-             mercantilistic capitalism, the hegemonic
times called “Kondratieff” cycles – after           centre of capitalist accumulation has
the economist who first noted and                   shifted from the Italian city-states (no-
analysed them. Over the past 500 years              tably Genoa), to the Netherlands (mid-
there has been a remarkably consistent              17th century) and to Britain. Since 1870,
cyclical pattern, occurring roughly over            the US has positioned itself as a chal-
                                               19
                          AFRICAN COMMUNIST | April 2009

lenger to British hegemonic domination,             for human survival. Capitalism and for-
and since 1945 the US has been the un-              merly existing socialism both shared the
contested dominant capitalist power.                illusion of limitless natural resources
The emergence of a hegemonic power is               available for ever-expanding exploita-
usually characterised by a greater pro-             tion. Today, socialist Cuba is setting an
ductive and technological dynamism                  important example of an entirely differ-
than its rivals. In its declining years (and        ent approach to sustainable develop-
the decline might last for a long period),          ment. On the other hand, while many
core centres of production shift to other           leading politicians in capitalist countries
localities, and the economy of the wan-             are beginning to express grave concern
ing hegemonic power is increasingly                 about the future of our planet – denial-
characterised by “financialisation” – the           ism; or market mysticism (somehow the
increased investment of surplus out of              hidden hand of the market will find a
production (and therefore out of job cre-           solution); or a cynical, even genocidal,
ation and wages) into speculative activ-            social Darwinism (“don’t worry there
ity. This pattern is evident in all hege-           will be losers but there will also be win-
monic societies, and since the early                ners”); or hopelessly inadequate piece-
1970s, as US hegemonic dominance has                meal reforms remain the order of the
begun to wane, a ballooning financiali-             day.
sation process has been evident there,                 In addition to the bio-physical limits
manifest in many things, including a                to capitalism, there are also struggle-de-
dramatic widening in the gap between                termined potential limits to the ex-
the share of surplus going to profits and           panded reproduction of capital. Capital
that going to wages.                                needs constantly to intensify and ex-
  In addition to these three rise-and-fall          pand its exploitation of labour power –
patterns typical of capitalism, there is a          it does this in several ways, forcing
fourth factor that needs to be borne in             workers to work longer hours; increas-
mind when considering the current cri-              ing the productivity of labour through
sis in the global capitalist system.                technological advances; or attempting to
  Approaching the bio-physical and ge-              roll back the social wage (for example,
ographical limits to capitalism?                    the welfare state). The relative success of
  The capitalist accumulation process is            any of these profit-maximising interven-
premised on ever-expanding growth                   tions depends on the ability or other-
and the illusion of limitless resources.            wise of labour and popular forces in
However, there are absolute limits to               general to resist the intensification of ex-
capitalist production and reproduction              ploitation. Critically in the current era of
(and, indeed, to any form of human civil-           “globalisation”, various forms of geo-
isation). There is now a well-established           graphical displacement have also been
scientific consensus that our present               key factors in this pursuit of the ex-
global economic trajectory is leading hu-           panded reproduction of capital. In par-
man civilisation towards catastrophe –              ticular, in the current era, capital has re-
with the depletion of non-renewable                 lied to a considerable extent on lowering
natural resources, the destruction of the           the cost (to capital) of the reproduction
environment, global warming and,                    of labour power by relying on Third
therefore, the bio-physical preconditions           World       survivalist    and      peasant
                                               20
                          AFRICAN COMMUNIST | April 2009

economies to carry much of the burden               US witnessed an unprecedented trend
of this reproduction. Thus we have seen             of rising productivity and rising real
the vast expansion in the last decades of           wages for the working class. This eco-
variously coerced and regulated forms of            nomic reality lies at the basis of the
mass migrancy (whether “cheap                       “American dream”, and of the “con-
labour”, or the “brain drain” from the              sumerism” and relative passivity of the
Third World). Or, the flip-side of the lat-         US working class – a car and a suburban
ter, through the geographical displace-             home being the epitome of the Ameri-
ment of production to new localities                can “way of life”. Since the early 1970s,
where labour is “rightless” and “disci-             the US’s hegemonic domination has
plined” in various ways (this happened              been challenged by Japan and the Asian
with the flow of FDI into apartheid SA              Tigers and some key European
after 1963, Brazil under the military junta         economies – leap-frogging in terms of
from the mid-1960s, and Chile from 1973             technological and industrial plant in-
under Pinochet, and, under a somewhat               vestments, rendering US industrial plant
different reality, it has been a key feature        (fixed investments) increasingly unprof-
of Chinese growth in the last decades).             itable. This has led to US capital moving
  However, as in South Africa, or Brazil,           to other locations or moving into in-
or South Korea in earlier periods, and as           creasingly speculative financial activi-
is now happening in China2, it tends to             ties. At the same time, US mass con-
take a generation or so for workers to              sumerism has been kept afloat through
organise (or regroup and re-organise) for           increasing credit, despite declining real
better wages, working conditions and                wages since the early 1970s.
social wage measures. In the coming pe-                Export-oriented Asian (especially Chi-
riod, the intensifying class struggles un-          nese) manufacturers and Third World oil
folding within China, and within the                producers became the production sites
Chinese state and ruling party itself, will         while US consumption propped up
have a decisive impact upon the chances             global market demand. The US has been
of a re-configuration (or otherwise) of             running huge current account deficits –
the global economy.                                 by 2006 the US current account deficit
                                                    was at $800-billion (or 6% of GDP).
The present crisis – a perfect storm                China, conversely, has played a crucial
The present global crisis is particularly           role in financing this US deficit, and
severe because it involves the confluence           therefore US consumption. China has
in differing degrees of all four of the sys-        now accumulated the world’s largest
temic factors considered above: ? short-            foreign exchange reserves ($1,9-trillion,
term cyclical downturns, converging                 at least $650-billion of which is in US
with ? a longer-term downward trend,                treasury bonds). In theory, China could
coinciding with ? a global hegemony                 pull the plug on the US economy, but a
now in full decline; all shadowed by ?              move to sell these assets would further
the already detectable impact of ap-                damage China’s export industries, giving
proaching bio-physical and perhaps so-              us a situation which some economists
cial limits to the expanded reproduction            have described as a “mutually assured
of capitalism.                                      economic destruction” capacity on both
  For around 100 years (1870 to 1970) the           sides.
                                               21
                         AFRICAN COMMUNIST | April 2009

  This symbiotic but unsustainable real-          globe is being impacted. On top of this,
ity premised on growing US consump-               demand in the US and Europe is in re-
tion was further propped up by a variety          cession, and this is impacting heavily on
of “creative” financial instruments de-           major global manufacturers, like China
veloped largely by the US financial sec-          where there have already been hun-
tor. Among these were “sub-prime                  dreds of thousands of retrenchments.
loans” – housing loans to those who ba-           The Indian government is predicting 10-
sically could not afford them, in which           million job losses in its export industries
the initial interest rate was sub-prime,          over the current year.
but with the interest rate escalating over          In many respects we are in uncharted
the duration of the mortgage on the as-           waters, and no-one can say for sure ex-
sumption that as the borrower pro-                actly where it is all headed. There are,
gressed career-wise so there would be             however, a few basic predictions we can
an increased capacity to pay instal-              make:
ments. (Note that this is not very differ-          There will not be any significant short-
ent from many BEE deals – in which                term recovery.
black “investors” acquire shares on loan,           Although the world capitalist system
on the assumption that the shares will            is in a grave crisis – it would be naïve to
always go up and they will be able to re-         assume that capitalism will simply col-
pay the loan). These sub-prime loans              lapse, or that the crisis will sponta-
were then “diced and sliced” (i.e. mixed          neously give birth to a better world.
up with other more viable loans) and                The relative decline of US economic
sold on by the direct mortgage institu-           supremacy (which has been slipping
tions to banks and other financial insti-         since the mid-1970s) has now been
tutions.                                          greatly accelerated. The US will proba-
  The collapse of the sub-prime market            bly still emerge as the most powerful
has been the catalyst of the present all-         economy, but the world will have be-
round crisis. It has seen one of the top          come significantly more multi-polar.
four investment banks in the US, the                While multi-polarity offers possibili-
100-year old Lehman Brothers collaps-             ties, potentially more breathing space
ing, and other banks and the mortgage             and alternatives, for the global South, it
lenders (Fanny Mae and Freddy Mac)                is the people of the South who will bear
having to be rescued, often through na-           the burden of the crisis. For instance, as
tionalisations. The dicing and slicing of         the core capitalist economies focus on
sub-prime and other toxic loans has               their own crises and their own stimulus
meant that major financial institutions           packages, already paltry development
in the US and Europe, in particular, have         aid is diminishing; trade protective bar-
no idea of what they are sitting on. This         riers are going up; FDI is pulling out of
has led to a reluctance of banks to lend          much of the South; premiums on inter-
to each other, and liquidity in the real          national loans have increased; and port-
economy has dried up. Major global                folio investments are even more disin-
manufacturers (like Nokia, for instance)          clined to bet on the South. It is not just
can still access cash from banks, but             the core capitalist economies that are re-
their hundreds of small suppliers cannot          treating out of the South. For instance,
get loans and production across the               more than 60 Chinese mining companies
                                             22
                          AFRICAN COMMUNIST | April 2009

have left the DRC’s Katanga province in             lenge anything in the neo-liberal gospel.
the past two months as mineral prices               This theme was repeated over and over.
collapse, and 100 small Chinese opera-                And that is exactly what is now being
tors are said to have left Zambian mines            repeated – except last time, we were be-
(Jeffrey Herbst & Greg Mills, ‘Africa’s left        ing told there were no alternatives to the
to face commodity price storm largely on            Washington consensus. Now, we are be-
its own’, Business Report, Jan 22, 2009).           ing told that the crisis of this very same
  It is possible that dynamic developing            economic agenda is so great, that we
economies like Brazil, India and China              had better not risk changing anything.
may be partially de-linked (de-coupled)               This was exactly the parting shot from
from the recession, but none will escape            the outgoing deputy finance minister,
its impact. China, with its US-oriented,            Jabu Moleketi, speaking in the week be-
export-led growth strategy will face very           fore the October 2008 alliance economic
serious challenges.                                 summit. He told the London Financial
  South African challenges - From the               Times that it would be “suicidal” for
‘unthinkable’ to the ‘unmentionable’                South Africa to change economic poli-
  The global economic crisis presents               cies: “Any sudden policy shifts by South
the left with major possibilities but also          Africa’s new leaders would be suicidal
serious challenges. Here in South Africa,           for a country whose economy survives
transformation of our productive econ-              at the mercy of foreign investors, accord-
omy has become all the more necessary.              ing to one of the architects of the recent
But it will also become more difficult as           years of stability.” (October 7, 2008)
declining global demand for our exports               Notice the sleight of hand in this sen-
will impact on jobs and on state fiscal re-         tence. On the one hand, we are told that
sources.                                            our economy has achieved “years of sta-
  We will also encounter an intensified             bility”, and on the other, we are told it
ideological battle, from those outside of           “survives at the mercy of foreign in-
the ANC, and indeed from within the                 vestors”. What kind of stability is that?
ANC itself. With their backs to the wall,           But according to one of our architects of
but with massive resources, our resident            stability, cde Moleketi, the seas are so
neo-liberals of all stripes are fighting an         choppy now that we shouldn’t try to
ideological battle to prevent any sensi-            turn our ship around. Typical of this line
ble, democratic debate opening up                   of reasoning is a caricature of what we
within our country on economic policy               are actually attempting (supposedly “a
evaluation and change.                              total U-turn”). What we are arguing for
  We have been here before. In the crit-            is exaggerated, the better to be able to
ical 1994-1996 period, a similar ideologi-          demonstrate our “lack of wisdom”.
cal battle was waged to capture the new               We might be inclined to ignore all of
government’s economic policy agenda.                this, if it were not likely to impact on
This included demonising, caricaturing              parts of the ANC and government. But,
and belittling alternative perspectives,            unfortunately, this is not something we
especially when they came from the                  can take for granted.
SACP and Cosatu. It also included con-                Consider an interview with Minister of
stant threats about what “global mar-               Finance, cde Trevor Manuel, conducted by
kets” would do to us if we dared chal-              the London Financial Times in the imme-
                                               23
                          AFRICAN COMMUNIST | April 2009

diate aftermath of the same mid-October              tionable” argument which was deployed
Alliance economic summit. Clearly refer-             hostilely against the RDP in the mid-
ring to the main resolutions from the sum-           1990s and which we are encountering
mit, cde Manuel speaks dismissively: “We             once more in regard to the ANC’s 2009
need to disabuse people of the notion that           election manifesto is the tired refrain: “it
we will have a mighty powerful develop-              is all very noble, but is it affordable?” In-
mental state capable of planning and cre-            deed, the affordability of a strategic pro-
ating all manner of employment. It may               gramme is not irrelevant. And yes, the
have been on the horizon in 1994 but it              global economic crisis will impact on
could not be delivered now. The next pe-             South Africa. There may very well be
riod is likely to see a lot more competitive-        fewer fiscal resources available to gov-
ness in the global economy. As consumer              ernment in the coming years as declin-
demand falls off there will be a huge bat-           ing profits hit tax revenue. Our existing
tle between firms and countries to secure            social security net, which we are com-
access to markets.” (28 October 2008)                mitted to expanding, will likely come
   Manuel exaggerates and implicitly                 under increasing pressure as global re-
ridicules the resolutions of Polokwane and           cession hits South African jobs3.
the Alliance summit on the developmen-                  We have to be realistic about these
tal state (Interestingly, when talking to the        and other related challenges. But what
local media, he has been more restrained).           we absolutely must not allow this time
He then says that a major job creation               around is that the “but is it affordable?”
programme led by a developmental state               refrain should be used to deflect us off
“may have been on the horizon in 1994 but            our strategic and programmatic direc-
it could not be delivered now”. In other             tion.
words, it is no longer possible to contem-              This is what happened in the mid-
plate serious state-led job creation pro-            1990s to the RDP. The affordability argu-
grammes because of the crisis in the global          ment was used to intimidate comrades
economy.                                             in government (and was used, in turn,
   But what was cde Manuel saying a                  by some in government). In the name of
few years back when there wasn’t the                 “finding the resources” to “deliver” on
global crisis? In 2000 he told the Sunday            “RDP promises”, the RDP programme
Independent: “I want someone to tell                 was dumbed down into a list of “deliv-
me how the government is going to cre-               ery targets”. Gear effectively replaced
ate jobs. It’s a terrible admission, but             developmental transformation as the
governments around the world are im-                 key priority, making stabilisation and re-
potent when it comes to creating jobs”               stimulation of essentially the same cen-
(9 January 2000).                                    tury-long growth path the priority. “De-
   Then it was never possible, now it is             velopment” was turned into earnest en-
no longer possible! A few years ago                  deavours at re-distribution out of
change of economic policy was suppos-                growth, while the stabilised and moder-
edly “unthinkable” – now it’s “unmen-                ately stimulated growth proceeded to
tionable”.                                           reproduce all the systemic features of
                                                     racialised underdevelopment that had
‘But is it affordable?’                              characterised this growth path for the
A variant of the “unthinkable/unmen-                 better part of a century.
                                                24
                          AFRICAN COMMUNIST | April 2009

  This time around we are making it                 velopmental strategy should not just be
very clear that it is decent work and sus-          “national” in character, but it should
tainable livelihoods (and not 6% growth,            also deliberately embrace a Southern
or some other arbitrary figure) that will           African regional and even South-South
be the key indicator of progress or oth-            dimension. Many capitalist forces
erwise. This, in turn, will require the             around the world can be expected to re-
marshalling of our resources around a               spond to the global crisis with a dog-
state-led industrial policy that prioritises        eats-dog mentality, with an each one for
the transformation of our productive                themselves approach of the kind that
economy. Key features of this industrial            cde Manuel is predicting in his Financial
policy must include:                                Times interview quoted above (“The
  Breaking the suffocating grip of private          next period is likely to see a lot more
monopoly cartels in the mineral, energy,            competitiveness in the global economy.
finance, chemical, and agro-processing              As consumer demand falls off there will
sectors –to ensure a more balanced de-              be a huge battle between firms and
velopment of small and medium-enter-                countries to secure access to markets.”).
prises with a capacity to create jobs.              While this trend is already evident, there
  Achieving a better balance between                are also inspiring alternative examples
production for export and production                from which we should learn and emu-
for our national and regional markets;              late where possible – foremost among
this will include ensuring that trade pol-          them the ALBA process in Latin Amer-
icy is governed by industrial policy (and           ica and the Caribbean4.
not the other way around).                            Integral to our developmental agenda,
  More effective strategic coordination             and to buttress the priority of job cre-
of energy policy – to ensure greater na-            ation and sustainable livelihoods, we are
tional energy sovereignty and long-term             further identifying four other areas re-
sustainability, with as rapid as possible           quiring prioritised systemic transforma-
greening of our economy.                            tion if we are to ensure sustainable
  Paying much greater attention to na-              transformation – health-care, education,
tional (and regional) food security.                rural development and community
  The consolidation of our SOEs and                 safety. These are not add-ons, but inte-
Development Finance Institutions, en-               gral components of a developmental
suring that their strategic development             path to systemic transformation.
mandates are aligned and clear.                       It might be that deepening global re-
  Reconfiguring the state apparatus to              cession and its impact upon our own
ensure that there is effective (and partic-         economy will have consequences for the
ipatory) planning in all spheres, that              scale and the time-frames for meeting
budget allocations are determined by                our strategic developmental priorities.
strategic and planned priorities, that              As we proceed, we need to monitor and
macro-economic policy is shaped ac-                 evaluate outcomes and likely forward
cording to our developmental priorities,            progress on a continuous basis. And we
and that the professionalism and tech-              need to make whatever adjustments
nical capacity of the state is significantly        might be required. what we absolutely
improved.                                           must not do this time around is to com-
  Our industrial policy and broader de-             promise on our strategic direction and
                                               25
                         AFRICAN COMMUNIST | April 2009

on our systemic tranformational objec-            our economy well since 1994: The last
tives                                             decade and a half has coincided with a
  To keep focused on our strategic devel-         huge surge in global growth. In particu-
opment agenda, we need also to engage             lar, over the last years there has been a
actively in a critique of what remain             major commodity boom that has bene-
dominant illusions about our present              fited most of our key exports. With a
national reality.                                 prolonged global recession now in sight,
                                                  and with slackening demand for com-
Myths about the South African                     modities, we have to ask ourselves
economy                                           whether we have used the boom years
Central to the neo-liberal campaign to            to place our economy on a sound, sus-
block serious economic debate and pol-            tainable and more equitable basis? Or
icy evaluation in our country is a series         have we largely squandered the oppor-
of inter-related myths about the state of         tunity?
health of our economy.                               An honest answer would have to ad-
  Myth number one: Over the last                  mit that, in many respects, we have lost
decade South Africa has witnessed ‘un-            opportunities that may not return. The
precedented’ growth: It is true that since        changed global reality does not make
1994 there have been 14 years of succes-          change impossible, it makes it all the
sive growth. Between 1994 and 2003 this           more necessary. But transformation will
growth averaged 3%. Between 2004 and              now be more challenging in many re-
2007 it averaged 5%. It is now likely to          spects.
dip again to 1%, if not down to negative             Myth number three: All the basic eco-
growth and recession.                             nomic fundamentals are in place …
  While sustained if moderate growth is           (and shouldn’t be tampered with!): The
not a negligible achievement, we should           smug complacency about what has been
remember that it is growth relative to            achieved over the past decade-and-a-
the deep ditch into which white minor-            half is, basically, a class complacency. For
ity rule had finally driven the economy           South African monopoly capital in gen-
by the early 1990s. In the last decade of         eral the past 15 years have been a period
apartheid, there was either zero or neg-          of great profitability, of a widening gap
ative growth for most years. To produce           between their executive salaries and the
growth out of this low-point did not              wages they pay their workers. It has
necessarily require rocket science.               been a decade of opportunities to disin-
  Moreover, a decade of growth is far             vest out of SA.
from being “unprecedented” as is so of-              For workers, however, the past 15 years
ten claimed. Between 1963 and 1973, the           have seen retrenchments initially soar
apartheid economy grew for a full                 and then level off into largely jobless
decade at an average of 7-8%. As this             growth. Unemployment peaked close to
apartheid-era growth should remind us,            40% and is now stuck around 33-35%.
economic growth on its own doesn’t tell           There has also been wide-scale casuali-
us who is benefiting, or even whether a           sation, so that those in employment of-
high growth rate is a good or a bad thing         ten find themselves below the radar
for the majority.                                 screen of progressive labour market leg-
  Myth number two: We have managed                islation. The past 15 years have also seen
                                             26
                         AFRICAN COMMUNIST | April 2009

widening income inequality, making SA              lem.
one of the worst performing countries in             It is hard to predict exactly what the
terms of the GINI coefficient measure-             short and medium-term global turbu-
ment of income inequality. However, im-            lence holds in store for our current ac-
portant social programmes (including               count deficit. The rand is tending to de-
grants, low cost housing and water and             preciate against the dollar and euro and
electricity provision) have helped to              this will improve our export competi-
lessen absolute levels of poverty.                 tiveness – but the global downturn will
   The idea that economic “fundamen-               lessen demand for our exports. The
tals” can be reduced to a few macro-               global downturn has brought the price
economic indicators, while ignoring un-            of oil down to levels last seen two years
sustainable levels of unemployment and             ago, but this decline is partly off-set, in
inequality, is a class-biased assumption.          turn, by the declining value of the rand.
   Myth number four: Owing to sound                  In short, our current account deficit –
economic management, South Africa is               which basically reflects on our failure to
a safe haven in the current global tur-            drive an aggressive industrial policy pro-
moil: In its 78th Annual Report, pub-              gramme particularly in manufacturing
lished in June 2008, the Bank of Interna-          and agriculture over the last 15-years –
tional Settlements rated South Africa              will remain a serious point of vulnerabil-
(along with Turkey, the Baltic states,             ity.
Hungary and Romania) as one of the                   Myth number five: Our financial sec-
states most at risk in the current turbu-          tor is healthy: Although our own finan-
lent global reality. Of course, the fact           cial institutions appear to be well regu-
that the BIS made this finding should              lated and have not been as severely ex-
not necessarily lead us to accept it as            posed to toxic loans as their interna-
gospel – the BIS failed to remotely pre-           tional counterparts, they have not been
dict the impending scale of bank failure           entirely immune either. Standard Bank
in the US. But the BIS report should cer-          has some exposure to derivative share-
tainly give us pause for thought.                  holdings, and Old Mutual lost over $1,4-
   The BIS finding was based in particu-           billion when its shares in Bear Sterns
lar on SA’s precarious current account             turned out to be almost worthless.
situation (the difference between our ex-          Hopefully, these remain limited cases.
port earnings and import expenditures).              But can we boast of a healthy financial
Since the June report, our current ac-             sector when we have had one of the
count deficit has worsened. In October             world’s worst housing price bubbles?
2008 our trade deficit widened to R7,1-            When household debt has quadrupled
billion, largely as a result of a R2,2-bil-        to more than R1,1-trillion in the past five
lion increase in imports of machinery              years? When more than 6 million South
and electrical appliances. On a cumula-            Africans can’t pay their debts? When, in
tive basis from January to September               the first quarter of 2008, South Africans
the deficit stood at R62-billion compared          spent 82,3% of their income servicing
with R55-billion in the same period last           household debt, compared to 60,2% in
year. The fact that South Africa has be-           1998? And when 6 000 vehicles and 2 000
come a net food importer for the first             homes are now being repossessed every
time ever is a further aggravating prob-           month?
                                              27
                         AFRICAN COMMUNIST | April 2009

   In assessing the health of our financial        sive and unsustainable energy intensive-
sector there is another reality that is of-        ness, and current account vulnerabili-
ten politely overlooked – the impact of            ties. These crises impact, in turn, on
narrow BEE deals. Many of these deals              other major headaches, including crime
involved complicated financial gearing,            levels and unsustainable household in-
in which an emerging elite (without cap-           debtedness.
ital savings) was provided with shares               Too often the debate on economic pol-
that they would, supposedly, repay out             icy is reduced to the wisdom or other-
of the gains the shares would “in-                 wise of inflation targeting or a small
evitably” make. After all, “the stock              budget deficit. These are important is-
market would always travel upwards” in             sues that, no doubt, need prudent han-
the wonderful new SA and world in                  dling. But they are subsidiary matters.
which we were now living. According to               At the Alliance economic summit we
some sources, around 80% of these BEE              agreed that our key priorities need to be
deals are now “under the water”. BEE               job creation, major improvements in ed-
beneficiaries are unable to repay the              ucation, health-care and the criminal
debt on their shares – at least not within         justice system, and serious rural trans-
the prescribed time as agreed. This will           formation. These key priorities must not
impact upon the liquidity of firms, and it         be handled as trickle-down welfarism,
is debt that will, in many cases, also be          but as integral components of a state-led
passed into our banking sector. If this            industrial programme that transforms
kind of BEE wheeling and dealing had               our excessively commodity-based ex-
had any serious transformational impact            port-dependent and capital-goods im-
then, as a country, a deepening debt that          port-dependent growth path. This is
will impact upon all of us might be ex-            neither a dramatic abandonment of
cusable. But narrow BEE has been a de-             macro-economic prudence, nor is it a
liberate side-tracking of serious transfor-        complacent sitting on our hands, hoping
mation.                                            the markets will somehow solve every-
   Myth number six: The choice is be-              thing.
tween ‘no change’ or imprudent macro-                Myth number seven: Thank God.
populism: We cannot be imprudent, but              When South African financial institu-
nor can we be complacent about where               tions appear to be less vulnerable to the
our economy is. We must reject the false           sub-prime crisis than institutions else-
choice of either an unsustainable wel-             where, when things are not as bad as
farist “macro-populism”, on the one                they might be, we are asked to believe
hand, or “no change”, where, suppos-               that something miraculous has oc-
edly, government continues to imple-               curred. Consider a recent speech deliv-
ment “prudent macro-economic poli-                 ered at the University of Pretoria by
cies”, while the markets do the rest.              Richemont and Remgro chairperson, Jo-
   Our problems are structural. We have            hann Rupert. He told his audience:
to transform the systemic features of our            “I am a proponent for the abolition of
persisting growth path that is reproduc-           exchange controls but I must agree with
ing the crises of our society – unemploy-          finance minister Trevor Manuel that we
ment, poverty, inequality, skills short-           were saved by foreign exchange con-
ages, diminishing food security, exces-            trols. Certainly some of my banker
                                              28
                         AFRICAN COMMUNIST | April 2009

friends and fund managers would also              role of popular mobilisation in impact-
have been seduced by the higher yields            ing positively on economic policy.
available in the sub-prime and other                Johann Rupert might not want us to
markets. So for once, thank God for for-          remember this fact. But we should never
eign exchange controls.” (Business                forget. The transformation of our pro-
Times, October 26, 2008)                          ductive economy and broader society
  It is possible that we have benefited           cannot depend upon a developmental
from divine favours in the recent past. It        state alone, it critically requires popular
would be remiss not to acknowledge                participation, popular mobilisation and
that cde Manuel has resisted the big-             popular monitoring and evaluation.
bang removal of exchange controls con-
stantly advocated by the media’s “eco-            Notes
nomic specialists”, by big business cir-            1. Cf. Marx: “The word over-produc-
cles, and by the DA and IFP in parlia-            tion in itself leads to error. So long as the
ment. However, in line with Gear com-             most urgent needs of a large part of so-
mitments to progressively remove ex-              ciety are not satisfied, or only the most
change controls, the Minister of Finance          urgent needs are satisfied, there can of
has introduced no fewer than 26 relax-            course be absolutely no talk of an over-
ations of exchange controls over the past         production of products – in the sense
eight years.                                      that the amount of products is excessive
  The residual presence of some ex-               in relation to the need for them. On the
change controls in SA isn’t particularly          contrary, it must be said that on the ba-
due to divine intervention or to the Min-         sis of capitalist production, there is con-
ister of Finance. Instead it has a great          stant under-production in this sense.
deal to do with protracted struggles              The limits to production are set by the
from within the ANC, and especially               profit of the capitalist and in no way by
from the SACP and Cosatu in opposition            the needs of the producers. But over-
to the hasty and excessive liberalisation         production of products and over-pro-
measures that were introduced from the            duction of commodities are two entirely
mid-1990s.                                        different things.” Marx, Theories of Sur-
  In particular, the SACP-led Financial           plus Value.
Sector Campaign eventually compelled                2. “Unemployment and the economic
hostile Treasury Department officials to          slowdown could cause massive social
deal legislatively and otherwise with our         turmoil in China, a leading scholar in the
financial institutions and their unwise           Communist Party has said. ‘The redistri-
lending inclinations. The Credit Act and          bution of wealth through theft and rob-
the extension of banking to a wider in-           bery could dramatically increase and
ternal market were the results of the             menaces to social stability will grow,’
campaign.                                         Zhou Tianyong, a researcher at the Cen-
  It is now conceded by many main-                tral Party School in Beijing, wrote in the
stream commentators that both these               China Economic Times. ‘This is ex-
measures (along with exchange con-                tremely likely to create a reactive situa-
trols) have played a key role in protect-         tion of mass-scale social turmoil,’ he
ing our banks from the global crisis.             wrote. His views do not reflect leader-
Thanking God is a way of obscuring the            ship policy but highlight worries in elite
                                             29
                         AFRICAN COMMUNIST | April 2009

circles about the impact of the economic          ture. ALBA rejects neo-liberalism and
slowdown. Mr Zhou warned that the                 aims to forge a path away from “free”
real rate of urban joblessness reached            trade. ALBA itself has a wide range of
12% this year and could reach 14% next            guiding principles and has the following
year as the economy slows. China’s an-            objectives:
nual GDP growth has already slowed to               To promote trade and investment be-
9% in the third quarter, from 10.1% in the        tween member governments, based on
second. Some forecasters see growth               cooperation, and with the aim of im-
slowing to 7.5% next year. The govern-            proving people’s lives, not making prof-
ment has launched a stimulus package              its.
and cut interest rates to boost the econ-           For member states to cooperate to
omy. Last month, China’s top planner              provide free healthcare and free educa-
warned that the economic slowdown in              tion to people across the ALBA states.
China could fuel social unrest. Zhang             To integrate the ALBA member’s energy
Ping, head of the National Development            sectors to meet people’s needs. ? To cre-
and Reform Commission, said the im-               ate alternative media to counterbalance
pact of the global crisis on China’s econ-        the US and regional neo-liberal media
omy was deepening. ‘Excessive bank-               and promote an indigenous Latin Amer-
ruptcies and production cuts will lead to         ican identity.
massive unemployment and stir social                To ensure land redistribution and food
unrest,’ he said.” (“China ‘faces mass so-        security within the member states.
cial unrest’”, BBC News, 5 December                 To develop state-owned corporations.
2008 – www//news.bbc.co.uk)                         To develop basic industries so that
  3. “The Unemployment Insurance                  ALBA member states can become eco-
Fund (UIF) is paying out about R300-              nomically independent.
million a month to beneficiaries, up from           To promote workers’ movements, stu-
R250-million a month last July, and claim         dent movements, and social move-
figures are expected to rise by at least          ments.
15% this year”. (“UIF payouts set to                To ensure that projects under ALBA
rise”, Business Report, Jan 21, 2009).            are environmentally friendly”
  4. See Shawn Hattingh: “At present,               (ALBA: Creating a Regional Alterna-
there are four full member states of              tive to Neo-Liberalism?, Feb 2008,
ALBA: Bolivia, Cuba, Nicaragua, and               www.monthlyreview.org/mrzine/hat-
Venezuela. There are four observer                tingh070208 )                          ★
states in ALBA – Ecuador, Uruguay, the
Dominican Republic, and St. Kitts – who           Cde Cronin is Deputy General Secretary
will become full members in the near fu-          of the SACP




                                             30
                          AFRICAN COMMUNIST | April 2009

COMMENTARY

On Jeremy Cronin’s
Joe Slovo Memorial Lecture
Patrick Bond reviews Jeremy Cronin's paper and concludes
it’s ‘fantastic’ – but could go further




T
             his is a fantastic paper, one of        But this was prior to the Polokwane
             the most coherent and vision-           conference at which a few major initia-
             ary of texts I’ve read about            tives of the left were announced as ANC
             the contemporary situation,             policies, leaving those arguing for a so-
             showing full cognizance of the          cialist project within the Alliance with
processes of capital accumulation, world             increased confidence. Such confidence,
system formation and ecological crisis,              as Cronin says, is ebbing because of the
as well as mapping out some of the im-               drum-beat of fiscal discipline that has
plications for South African Left praxis.            accompanied the crisis. In this context,
However, in these brief comments, I                  let me begin by taking up just a few
hope to contribute to the debate in three            points in the text to cajole and to ap-
ways. First, I do have some minor quib-              plaud:
bles with cde Jeremy’s analysis; second,
I’d like to forcefully agree and extend his          What are we up against? Quibbles
description of foundational processes in             JC: “Once again, the inability to appre-
crisis formation and displacement; and               ciate the dialectical character of world
third, there are a few more substantial              capitalism’s trajectory, was to lead
augmentations to suggest for prescrip-               Mbeki (like Seme before him) to gravely
tions associated with South Africa’s in-             misread the global situation, to imagine
dependent left.                                      an “African renaissance” based on catch-
  This text (revised from a version in               ing-up and aligning ourselves to the
Umsebenzi last month) follows several                “West”, with the promise of an in-
from the SACP that appear to be ever                 eluctable, evolutionary way forward –
stronger in their critiques of capitalism’s          “today is better than yesterday, and to-
core processes, of which two are perhaps             morrow will be better than today.”
most important: the 1998 Alliance analy-               PB: I imagine the most hostile remark
sis of the economic crisis in which the              a Marxist given top marks at the Lenin
deep theory of over-accumulation crisis              Institute in Moscow could receive is
was flagged; and the 2006 Bua Komunisi               “undialectical”. I think there’s something
analysis of South African capitalism’s in-           worse reflected in Mbeki’s analysis
ternal contradictions. In both, the disap-           though, especially in its full-on endorse-
pointments for diverse independent left-             ment of technology-driven globalisation
ists (of which I count myself a member)              (of the sort that is found in such a banal
were largely in the programmatic arena.              form in Nepad for instance, written in
                                                31
                         AFRICAN COMMUNIST | April 2009

2001, after the East Asian crisis and the          could deal with the ordinary short busi-
quite Marxish 1998 pronouncements by               ness cycle run into much more serious
the Alliance on that crisis). That is a re-        problems when the longer K-cycles be-
turn to modernisation theory as the ba-            gin to have an impact. It is here we
sis for undergirding neoliberalism, as we          should reserve our use of the word “cri-
saw in ASGISA, namely the sense that               sis”, and acknowledge - as Cronin does
microfinance is the missing link, the en-          - that periods like 1945-73 were not ones
ergy that can bring “dead capital” to life         of “crisis” at the global scale. Once it de-
in the De Soto sense. In a collection of           stroys enough over-accumulated capital,
political economic texts CCS produced              the system can reassert the underlying
last year, you can find David Masondo’s            dynamics of accumulation and fully “re-
tough critique of the revived modernisa-           solve” its crisis tendencies, we have
tion strategy and my own attempt to                learned again and again. Cronin is cor-
unpack ASGISA’s faith in finance. (A               rect that we have not witnessed that
cheeky query: did the SACP fall for this           process since the early 1970s, though
in some sense, in the promotion of ac-             with some $25 trillion in fictitious paper
cess to capitalist bank credit for a small         values now wiped off the world’s bal-
sliver of the working class, instead of            ance sheet in recent months, at least it’s
promoting the kind of bank nationalisa-            possible to consider the financialisation
tion as a form of public utility, as some          displacements now impossible, so that
influential voices in the Western left             the real work of restructuring underly-
such as Leo Panitch are now doing? The             ing systems of industrial production may
SACP’s Financial Services Charter cam-             begin in earnest.
paign work and Mzanzi bank account                   JC: Crises in capitalism can occur as a
victories now deserve a fundamental re-            consequence of factors extraneous to the
think, with not only regulation but a              accumulation process –wars, natural
much more profound attack on finan-                disasters, social upheavals.
cialisation and consumer indebtedness                PB: Ah, but which of these is truly ex-
now feasible.)                                     traneous to capital accumulation? (Ok,
  JC: “To be sure, capitalism is seldom            many natural disasters like the 2004
free of crisis.”                                   Tsunami – but as Naomi Klein points
  PB: Though the word ‘crisis’ is very             out, ‘disaster capitalism’ is able to profit
common among South African activists               from such events, not just face destruc-
(just check the names of numerous cam-             tion.) The challenge is to identify ways
paigns and organizations), there is a              that the uneven/combined nature of the
‘Chicken Little’ critique leveled against          capitalist system pushes and pulls capi-
classical Marxism for remarks of this              tal accumulation into different circuits
sort (e.g. by Doug Henwood and Sam                 and spaces of capital, a huge undertak-
Gindin against yours truly). So I don’t            ing. (For this task, I especially recom-
think this is an appropriate statement if          mend recent books by John Bellamy
we think of the word “crisis” in terms of          Foster and Fred Magdoff, David Harvey,
a disruption to the reproduction of a so-          Robert Brenner, Ellen Meiksins Wood
cial system (the way Robert Cox some-              and Joel Kovel, to name a few.) At that
times put it). In that sense, the self-cor-        stage it should become possible to con-
recting features of capitalism which               nect the dots, and show how World War
                                              32
                         AFRICAN COMMUNIST | April 2009

1 and World War 2 were geopolitical re-           suggesting we have passed through the
actions to capitalist crisis, and how Ka-         neoliberal stage - that extremist version
trina and Africa’s worsening drought/             of macro and micro economic policy will
flood cycle are internal (not exogenous)          continue to return to haunt the world’s
reflections of accumulation dynamics.             poor and working people, and environ-
  JC: ... under capitalism “over-produc-          ment.) If we pose the problem in these
tion” (i.e. more than the market de-              deep-rooted ways (Cronin’s description
mands – i.e. more than can profitably be          is excellent), then we see that the way
sold) triggers a break-down in the sys-           out of overproduction is in the first in-
tem – a crisis of over-accumulation.              stance deflection of the inevitable deval-
This, in turn, requires a massive wave of         orisation of overaccumulation of capital
destruction of productive capacity (in            (defensive maneuvres) combined with
the form of retrenchments, factory clo-           the socialisation of markets (our Left of-
sures, liquidations, and stock exchange           fense, as we have accomplished through
collapses), in order to “clear the ground”        brilliant social struggles with respect to
for the next round of capital accumula-           anti-retroviral medicines in SA and to
tion through growth. It must be stressed          some extent water in Johannesburg).
that under capitalism “over-production”           This is the agenda of the SACP, reflected
is not the over-production of products            in the wonderful slogan “Socialism is the
that the mass of the world’s population           Future, Build it Today”. But is that slo-
often desperately needs. It is “over-pro-         gan truly informed by a deep-seated cri-
duction” relative to “market demand”,             tique of capitalist market irrationalities?
i.e relative to what can profitably be            This is the opportunity to declare social-
sold. Capitalism, for all its dynamism            isation not only desirable in “the Fu-
and robustness, is a profoundly irra-             ture” but absolutely necessary “Today”,
tional system.                                    because of capitalist crisis tendencies.
  PB: Well said. The implications of this           JC: In SA the last decade of apartheid
analysis go very far in taking us away            corresponded to a domestic downturn/
from mere Keynesianism - the Northern             recession and post-1994 we have seen a
elite’s momentary current ideology of             general economic upturn.
rhetorical preference (even if not yet the          PB: A quite complex process was un-
ideology of practice), though apparently          derway from 1984-94 that no one has
not feasible in the South, if Trevor              properly dissected, in my view (though
Manuel is to be believed. There is some           Charles Meth made a good start in the
discussion at the global scale - perhaps          early 1990s in his debates with the SA
best articulated in the January 2009 is-          Regulation School, and Martin Legas-
sue of Development Dialogue journal is-           sick’s excellent contemporary economic
sued by the Dag Hammarskjold Foun-                analysis has a fine historical sweep).
dation - about “post-neoliberalism”, but          There were far too many political inter-
I don’t see it yet, for the reasons that          ventions from above and below to char-
Cronin has specified. The deeper crisis of        acterise it as easily as does Cronin, espe-
capitalism we face will require much              cially given that from 1989-93 we wit-
more than what Walden Bello has over-             nessed the longest depression in SA’s
generously labeled “Global Social                 history. The factors we need to better in-
Democracy” (I believe Bello incorrect in          corporate and that cannot be summed
                                             33
                         AFRICAN COMMUNIST | April 2009

up in a sentence would include:                    important pressures from the old Urban
  ● sustained overproduction especially            Foundation and the World Bank) explic-
for white consumer markets by the early            itly recommodified township housing
1970s;                                             (“normalisation of the markets” in the
  ● the range of labour-related rigidities         words of the 1994 Housing White Pa-
and social irrationalities that SA capital-        per), so that the Kuznets real estate cy-
ism suffered because of its apartheid              cle went into hyperactive mode once the
shell;                                             earlier round of housing devalorisation
  ● the desire of English-speaking capi-           (1989-98) had played itself out.
tal (and the Ruperts too!) to escape SA,              JC: [we are entering] a period of sev-
which they did through capital flight              eral years of downturn if not actual re-
and overseas purchases until September             cession. We obviously make this point,
1985 when it became more difficult and             in order to prepare our defences against
expensive in part because of exchange              what is likely to be a political discourse
controls and in part because of interna-           in the coming years – blame a largely
tional opprobrium against SA capital;              “objectively” (and externally) deter-
and certainly not least,resurgent class            mined downturn on “Polokwane pop-
and community struggles from below.                ulism”.
  If these factors are at the core of our             PB: This is a point that needs to be de-
analysis, it becomes easier to see how an          fended in much greater detail, especially
unsustainable accumulation process has             with the resurgent hype about Trevor
occurred from 1999 to present, based               Manuel’s successes in macroeconomic
largely upon expansion of the credit sys-          management (in Financial Mail and
tem and momentarily-successful com-                M&G reviews of Pippa Green’s new bi-
modity exports which together began to             ography, but more generally).
generate the fabled 5% GDP growth                     JC: myths about the South African
rates of the 2000s. But at the same time,          economy
with this foundation, we can see how                  PB: I have a few more quibbles:
the underlying problems of the SA eco-                Myth one: Did “growth” really occur?
nomic structure worsened throughout                If it had been measured correctly, in a
the period of “general economic up-                way that calculates the depletion of nat-
turn”. Macroeconomic policies (as well             ural resources, then no. Correcting SA
as micro-developmental strategies                  GDP in this way, even the World Bank
which emphasised markets) here were                acknowledges that the economy - in-
central, reflecting a power shift to capi-         cluding its stock of nonrenewable natu-
tal (“the 1996 class project”). Another            ral assets (mainly minerals) - actually
important factor in the recent “upturn”            shrinks each year.
has been the bubbling of real estate                  Myth two: The massive upturn in
prices, which from 1997-2004 grew more             commodity prices from 2001-08 was not
than three times faster than the US, in-           simply a missed opportunity, it is ex-
cluding in our own ‘subprime’ township             traordinary how little the mining houses
markets. This in turn reflects an uncom-           here reflected the huge profits on their
fortable fact we cannot but mention in             books and in GDP contributions. This is
this room today: Joe Slovo’s housing               probably a result of the way they were
policies (designed by Billy Cobbett with           allowed to internationalise their opera-
                                              34
                         AFRICAN COMMUNIST | April 2009

tions starting with DeBeers in the early           Myth seven: No quibbles here...
1990s but accelerating with so many
other offshore deals done since 1994.             Uniting on analysis
   Myth three: If we measure profits              The words below are powerful and de-
properly within economic fundamen-                serve amplification. I have no real quib-
tals, we’d see a major increase in finan-         bles, aside from desiring more detail
cial activity and decline in manufactur-          about “combined and uneven develop-
ing activity, which is one of the most im-        ment”, that evocative phrase (of the un-
portant problems in capitalism globally.          mentionable Leon Trotsky in his 1906
   Myth four: On current account vul-             work on permanent revolution). This is
nerability, the crucial factor Cronin neg-        for the simple reason that what David
lects is the outflow of capital to London         Harvey terms “accumulation by dispos-
thanks to the 1999-2001 permissions that          session” - which in our SA phraseology
Manuel gave to Anglo, DeBeers, Old                corresponds to the “articulation of
Mutual, SAB, Didata, Mondi and other              modes of production” (popularized by
corporations to externalise their finan-          SACP theorist Harold Wolpe) in which
cial headquarters. That is a critical area        capitalism superexploits precapitalist so-
for reversal, via exchange controls.              cial relations - is an ever more important
   Myth five: On the health of the finan-         part of profitability, a factor not dis-
cial sector, would this not be a good             turbed much by the current capitalist
chance to ask auto-critically about SACP          crisis (even if the commodity price col-
theory/practice in relation to access by          lapse has slowed dispossession in some
the black working class to credit? What,          sites, like the Copperbelt, as Cronin ob-
indeed, is the basis for an appropriate           serves). Our rereading of the works of
system of capitalist credit flows to town-        Rosa Luxemburg is especially useful, as
ships and rural areas, given that finance         her SA and African analysis holds up
invariably amplifies uneven/combined              well today (Jeff Guy pointed out in a
development? Each circumstance is dif-            CCS seminar in 2006), and the Luxem-
ferent, but some guidance on how we               burgist analysis is also the best South-
might turn the myth upside down by so-            North rendition on the question of im-
cialising finance would be welcome.               perialism.
   Myth six: Why not embrace the                    JC: The present long-term cycle in the
choice: “between ‘no change’ or impru-            world capitalist system began in 1945,
dent macro-populism”, and then rede-              with the upswing reaching a turning
fine macro-populism to incorporate the            point around 1970/3. Since then, globally,
kinds of policies we want on the Left,            we have been in a long downturn –
and turn away from the Gono-style                 somewhat longer than normal, partly
policies we don’t? Why not take advan-            because capitalist-aligned economists
tage of the way that the beastly                  and central banks and multi-lateral in-
Lawrence Summers now must confess                 stitutions (like the IMF), believing that
“We are all Keynesians” and then estab-           they had finally “beaten” recession for-
lish the controls necessary to have a ma-         ever, introduced a range of interventions
jor upsurge of state spending without ei-         which we can now see have simply tem-
ther inflationary damage to poor peo-             porarily displaced the epicentre of crisis
ple’s budgets and capital flight?                 into semi-peripheral regions, thus delay-
                                             35
                         AFRICAN COMMUNIST | April 2009

ing and deepening the full-blown crisis            R50 billion Eskom loan for coal-fired
in whose midst we now are... while                 power plants) and probably globally in
many leading politicians in capitalist             coming weeks thanks to Barack Obama;
countries are beginning to express grave           and the inability of SA’s neoliberal bloc
concern about the future of our planet –           to change world conditions (as wit-
denialism; or market mysticism (some-              nessed today in Davos where president
how the hidden hand of the market will             Kgalema Motlanthe and Trevor Manuel
find a solution); or a cynical, even geno-         will again exert zero pressure for gen-
cidal, social Darwinism (“don’t worry              uine global financial governance, in the
there will be losers but there will also be        wake of their apathetic role in the G20
winners”); or hopelessly inadequate                in Washington).
piecemeal reforms remain the order of                The first pressure was felt on October
the day... The geographical shift in hege-         22, when hundreds of pages of IMF re-
mony. Marx, Lenin and others following             ports were dumped on South Africa,
them have demonstrated how capitalist              overwhelming our slovenly business
development is characterised by high               press corps. The five key points made in
degrees of combined and uneven devel-              the most important report, the Article 4
opment. It is a global system charac-              Consultation, are:
terised by geographical zones of various             ● The SA government should run a
importance within the accumulation                 budget surplus.
process – core zones, semi-peripheral                ● SA government should adopt privati-
zones, and marginal or peripheral zones.           sation for “infrastructure and social
Within this hierarchical system there is           needs” including electricity and trans-
a tendency for a single zone/region or             port.
country to emerge as the dominant                    ● SA Reserve Bank should maintain
hegemon... it is the people of the South           existing inflation-targeting and raise in-
who will bear the burden of the crisis.            terest rates.
For instance, as the core capitalist                 ● SA Treasury and Trade Ministry
economies focus on their own crises and            should remove protections against inter-
their own stimulus packages, already               national economic volatility, especially
paltry development aid is diminishing;             financial and trade rules.
trade protective barriers are going up;              ● SA Labour Ministry should remove
FDI is pulling out of much of the South;           worker rights in labour markets, includ-
premiums on international loans have               ing “backward-looking wage indexa-
increased; and portfolio investments are           tion” to protect against inflation.
even more disinclined to bet on the                  Reports from Davos today already
South.                                             mirror the sense we have from the No-
                                                   vember meeting of the G20 (the major
South African challenges                           financial economies): SA will play deaf
PB: I think Cronin misses two essential            and dumb to the needs of Africa, for
challenges for the SA left: withstanding           massive debt cancellation, reparations
the particular pressures of the Bretton            and an end to capital flight. Those needs
Woods Institutions, now resurgent with             cannot be doubted, yet the only real
‘Washington Consensus’ logic thanks to             pressure SA is known for applying is to
their relegitimation in South Africa (a            extend African membership on the
                                              36
                          AFRICAN COMMUNIST | April 2009

boards of the Bretton Woods Institu-                ence of IMF logic. Booting out the IMF
tions. This has been an extremely diffi-            consultants who make Article 4 recom-
cult job, even though the IMF and Bank              mendations in direct contradiction to
desperately relegitimation, and the main            what their boss, Dominique Strauss-
question to be asked is, “so what if                Kahn, has been saying (he advocates a
Africa gets another seat or two?” (espe-            2% increase in deficit spending ‘every-
cially if the likes of Manuel and his allies        where’), would be a good first step.
across Africa determine the agenda.)                  JC: [critique of Moleketi] Typical of
   In contrast, showing genuine Third               this line of reasoning is a caricature of
World financial leadership, the Ecuado-             what we are actually attempting (sup-
ran government recently led the world               posedly “a total U-turn”). What we are
with a debt default based on the prem-              arguing for is exaggerated, the better to
ise of Odious Debt (SA remains in con-              be able to demonstrate our “lack of wis-
flict with Jubilee SA and Khulumani                 dom”.
over precisely the same principle in the              PB: But why not a total U-turn? Why
US apartheid reparations lawsuits). And             not the demands of Keynesianism as
the Venezuelan government has called                against neoliberalism and monetarism?
for the closure of the IMF (as did Joseph           Why not a (non-subimperialist) African
Stiglitz in 2002) and has catalysed a               continental orientation and major in-
Bank of the South to operate outside the            ward push to change wealth and income
logic of “sound banking principles”                 relationships so as to revive markets for
(meanwhile in mid-January, Manuel                   basic-need goods and services? Why not
agreed on a 17.5% ownership in a $25 bil-           a full U-turn on the kinds of interna-
lion “African Investment Bank” destined             tional relations - free trade, repayment
to run precisely on “sound banking prin-            of apartheid debt, inviting TNC direct
ciples”, according to the founding doc-             investment - that made SA so vulnera-
uments). Our economy lost $6 billion                ble over the years? Why not a U-turn on
when the currency crashed in October                unemployment and inequality, and on
2008 after Mbeki’s office released                  reliance upon the market in so many
Manuel’s resignation letter, so once                ways?
again SA’s vulnerability to world finance             JC: We have to be realistic about these
– and so far untried ability to reverse             and other related challenges. But what
this through tightened exchange con-                we absolutely must not allow this time
trols – was revealed as a huge challenge,           around is that the “but is it affordable?”
which the left has not really joined so             refrain should be used to deflect us off
far. In other countries, excellent protests         our strategic and programmatic direc-
have been recorded against the neolib-              tion.
eral project that has intensified because             PB: Affordability is a factor in the ide-
of the world financial crisis (most re-             ological debates with Treasury and the
cently in Iceland of all places), while             bourgeois press. But I think it will be in
South Africans retain what I believe to             the micro interventions - of which prob-
be the world’s highest protest rate per             ably the National Health Insurance pro-
capita (far higher than China’s) yet have           posal will be most contested - that the
not connected the dots between their                Left must firm up its critique of market
micro problems and the ongoing influ-               processes and outcomes. On anti-retro-
                                               37
                          AFRICAN COMMUNIST | April 2009

viral medicines and water, we have come             apartheid debt? These are all the actu-
a very long way from a decade ago,                  ally existing campaigns by social move-
when insisting upon locally-produced,               ments, churches and labour which we
decommodified AIDS drugs and Free                   need to promote and support where ap-
Basic Water supplied by a municipality              propriate. The Party has been weak in
(not a Paris company) were sacrilege.               its acknowledgement much less solidar-
   JC: ... it is decent work and sustainable        ity with these campaigns (and vice
livelihoods (and not 6% growth, or some             versa), so let’s figure out ways to reverse
other arbitrary figure) that will be the            our lack of unity in the crucial period
key indicator of progress or otherwise.             ahead.
This, in turn, will require the marshalling           In addition, we need to always get
of our resources around a state-led in-             back to a Left programmatic synthesis
dustrial policy that prioritises the trans-         and, of course, to analysis. With the
formation of our productive economy.                SACP and Diakonia, our Centre is now
   PB: All of these strategies are excellent        discussing how to generate a reading cir-
as transitional demands but hang on,                cle beginning next month, to tackle Cap-
there are just as rich a set of economic            ital, Luxemburg’s Accumulation of Cap-
strategies emanating from the radical               ital and contemporary texts. I will pro-
social movements and labour that de-                pose to the broad church of comrades
serve building upon, in addition to the             from the Party, the liberation wing of the
AIDS medicines and deprivatised water               faith/justice movement and our inde-
that the Treatment Action Campaign                  pendent left community and intellectual
and Anti-Privatisation Forum have won.              stalwarts who take part, that this text of
What about land? Housing? Free educa-               comrade Jeremy is our first read. Thanks
tion? Larger quantities of free municipal           very much for it, and for the chance to
services with greater local and national            comment on it with the full respect it
cross-subsidies? A Basic Income Grant?              deserves.                                ★
Radical changes to the SA state’s pro-
corporate environmental policies on bio-            Patrick Bond is a lecturer and researcher
fuels, biopiracy, timber, fishing and espe-         at the University of KwaZulu-Natal’s
cially climate? And reparations for                 Centre for Civil Society




                                               38
                         AFRICAN COMMUNIST | April 2009

CAPITALISM’S CRISIS

South Africa’s
collective response
Nedlac's four constituencies provide the consensus
framework for a national response to the crisis




I
     n January and February the Gov-              Impact of the crisis on South Africa
     ernment, Business, Labour and                B1. All countries across the world are af-
     Community constituencies in the              fected by the deepest and most serious
     National Economic Development                economic crisis in at least the last 80
     and Labour Council (Nedlac) pre-             years.
pared a national framework document                 The crisis - caused by a range of factors
outlining South Africa’s planned re-              including gross imbalances and in-
sponse to the crisis in global capitalism.        equities in the global economic system,
The document, titled Framework for                the impact of the financialisation of
South Africa’s response to the interna-           economies, ineffectual regulation in sev-
tional economic crisis, was released on 19        eral of the major world economies and
February 2009                                     poor business practices - has resulted in
                                                  significant asset depreciation, closures of
Statement of joint purpose                        companies, rising unemployment and a
In December 2008 the social                               sharp slowing down of economic
partners that comprise the Pres-                          growth, with most highly indus-
idential Economic Joint Working                           trialised countries entering a re-
Group,      namely       organised                        cession.
Labour, Business and Govern-                                Like other developing countries
ment, met to consider how                                 which are strongly integrated
South Africans should respond                             into the world economy and sig-
collectively to the more difficult eco-           nificantly dependent on its good health,
nomic conditions we now face, largely             South Africa has been affected by the
as a result of the international economic         sharp fall in demand for its export prod-
crisis.                                           ucts and the fall in prices of key export
  We met subsequently in a forum con-             commodities. In addition, the interna-
vened by Nedlac, in partnership with              tional credit crisis has meant that funds
the Presidency, now also including the            have become scarce and expensive and
Nedlac Community constituency, and                that portfolio investors are wary of
have agreed on a collective response to           emerging markets, including South
the challenge facing us today. We agree           Africa.
that the economic situation requires an             The result is that our growth expecta-
effective collective response, and have           tions had to be sharply revised, down-
set out that response here.                       wards. The duration and depth of the
                                             39
                         AFRICAN COMMUNIST | April 2009

downturn cannot be forecast with cer-              recognised, is our first concern and will
tainty, but growth is likely to be lower           require active steps to ensure these out-
than previously expected at least in               comes are avoided.
2009, and 2010. This has potential impli-            Our second principle is to ensure that
cations for incomes, employment, and               all of our activities that are aimed at
investment; and on social programmes               strengthening the capacity of the econ-
partly through the slowdown’s effect on            omy to grow and create decent jobs in
tax revenues for government.                       the future, are protected and supported
  In the difficult circumstances that we           as far as possible. By decent work we
face, we can utilise our strengths, in fis-        mean the need to increase the level of
cal space, the financial regulatory frame-         employment as well as improve the
work, and the resourcefulness of our               quality of jobs. We agree on the need to
people and institutions, to develop a re-          address the constraints to growth and
sponse to the crisis and to commit to              development through programmes: to
work together in addressing its impact             increase public investment in economic
on South Africa.                                   infrastructure; to deepen the joint stake-
   We need social solidarity between all           holder commitment to skills develop-
South Africans to ensure that the crisis           ment; to act urgently on the commit-
does not damage the fabric of our soci-            ment to introduce effective industrial or
ety. Those with greater means have a re-           sector strategies, or strengthen existing
sponsibility to those without such                 strategies, and to ensure higher levels of
means. Our collective responsibility is to         private sector investment and entrepre-
work together to withstand the crisis              neurship; to pursue the transformation
and ensure that the poor and the most              of informal economy activities and its in-
vulnerable are protected as far as possi-          tegration into the formal economy; to
ble from its impact. We must also ensure           improve and streamline government de-
that the economy is ready to take ad-              livery and regulation; to improve eco-
vantage of the next upturn and that the            nomic efficiency; and to commit to
benefits of such growth are shared by all          macroeconomic policies that support
our people.                                        decent work and sustainable growth
                                                     We are also committed to maintaining
Broad principles governing                         the planned high levels of investment in
our response                                       public sector infrastructure and to en-
The first principle of our approach to the         courage the private sector to maintain
downturn is that low income workers,               and improve wherever possible their
the unemployed and the vulnerable                  levels of fixed direct investment and
groups can lose much through even a                continue with corporate social invest-
relatively brief economic shock, and the           ment programmes.
risk of unfairly placing the burden of the           Interventions must be timely, tailored
downturn on the poor and the vulnera-              and targeted as is appropriate. Actions
ble must be avoided. The potential of              to counteract the downturn must be re-
economic shocks to destabilise the wel-            viewed periodically, and removed when
fare of the vulnerable, including their            they are no longer effective or appropri-
jobs, health and education, and to in-             ate. We are conscious of the risk of de-
crease inequality and poverty, is widely           veloping interventions that have short
                                              40
                         AFRICAN COMMUNIST | April 2009

term benefits but that have the potential         must be maintained even in the midst of
for detrimental long-term social or eco-          the current challenges, and that it
nomic effects.                                    should be implemented on an expedited
  C5 In line with the principles outlined         basis where possible.
above, we are convinced of the need for             At the same time, further efforts will
a bold intervention in the form of a              be made by the parties to secure addi-
broad stimulus package, as signalled in           tional resources to expand this pro-
the recent budget, that has economic              gramme in the light of current condi-
and social components, and we set out             tions. Social partners, particularly the
herein the measures that we commit to             business and trade union sectors, com-
implement.                                        mit themselves to identify mechanisms
                                                  of supporting the public investment pro-
Investment in public infrastructure               gramme including considering ways in
Significant levels of public investment in        which the implementation of public in-
infrastructure are one key means of re-           frastructure projects can be fast tracked.
sponding to the downturn in the econ-             A task team will be set up to consider
omy. This public investment programme             how to give effect to this.
will include expanding and improving                These investments are intended to en-
the road and rail networks, public trans-         courage private job creating invest-
port, and port operations, dams, water            ments, from large industrial projects en-
and sanitation infrastructure, housing            couraged by more efficient railroads and
construction including low-income                 ports to small rural projects made possi-
housing and publicly owned rental                 ble by better rural roads or access to
stock, information and communications             electrical power.
technology and energy generation ca-                Development Finance Institutions will
pacity as well as education and health            provide financial and technical support
infrastructure, and in the process create         for public sector investment projects
additional decent work opportunities              taking into account both immediate and
whilst meeting the basic needs of the so-         long term needs.
ciety. Activities will include maintenance          We recommend that all projects be
of current infrastructure using labour in-        evaluated to ensure appropriate prioriti-
tensive approaches wherever possible.             sation, and that new ways be found to
  Infrastructure investment should en-            address financing and capacity con-
sure the best possible social, employ-            straints.
ment and economic return to the soci-
ety. This programme will be spread                Macro economic policy response
across both urban and rural areas. Rural          Against the background of the Budget
development should include pro-                   introduced into Parliament by the Min-
grammes to create employment, allevi-             ister of Finance, parties agree that fiscal
ate poverty, and improve access to                and monetary measures are necessary
health and education.                             and should be used aggressively where
  SA has announced a major public in-             required to address the crisis. They
vestments programme of approximately              should be used in combination and be
R787bn over the three financial years to          aligned to each other in order to have
March 2012. We believe this programme             the required impact. Significant re-
                                             41
                         AFRICAN COMMUNIST | April 2009

sources should be provided for industrial         to tax relief targeted at low-income
policy interventions together with                workers, the poor and companies in dis-
strong, robust use of accepted trade              tress. Parties acknowledge that certain
measures, to ensure that the crisis does          of these areas are addressed in the Na-
not cause job losses in the real economy.         tional Budget tabled on 11 February 2009
  It is agreed that appropriate counter-          in Parliament. The parties will facilitate
cyclical measures should be used to               discussions on an urgent basis to con-
stave off a recession and job losses and          sider these proposals and their implica-
that the specific fiscal measures to do so        tions for the package as a whole.
should as far as possible be coordinated
with the other measures set out in this           Industrial and trade policy measures
framework and be sustainable over the             A significant part of the national re-
longer-term.                                      sponse to the global economic slow-
  The parties recognise the role and con-         down should be to rebuild local indus-
stitutional mandate of the SARB in the            trial capacity and avoid de-industrialisa-
conduct of monetary policy. The social            tion during the period ahead. Critical to
partners will use the mechanism of Ned-           such a strategy is the need to improve
lac to interact with the monetary au-             the competitiveness and performance of
thorities, to discuss the interest rate           key local industries, particularly vulner-
regime as well as ways of lowering the            able sectors and of small businesses.
cost of capital and significantly reducing          Vulnerable sectors are those sectors
the real interest rate gap between SA             with significant employment and labour
and key trading partners as part of re-           intensity and where there are currently
sponding to the global economic crisis.           large planned or actual job losses and
  The parties recognise the value of a            company closures as a result of the cri-
competitive exchange rate. In current             sis. The parties have identified the sec-
circumstances where the Rand has de-              tors referred to below as an initial list of
preciated, there are opportunities to in-         vulnerable sectors. Parties recognise that
crease employment-generating exports              this list does not constitute a full list of
as well as to decrease the level of im-           affected sectors and sectors may need to
ports of light-consumer goods that can            be added or subtracted based on devel-
be produced locally. This can assist with         opments in the real economy. Sector
addressing the trade deficit and have a           specific strategies to address vulnerable
positive impact on employment and lo-             sectors, such as clothing, textiles and
cal economic activity. The parties will           footwear, mining and the auto and cap-
use appropriate sector-level forums to            ital equipment sectors, will be set up,
develop concrete proposals on an expe-            with the urgent and focussed use of a
dited basis. These proposals will include         combination of trade, industrial and so-
consideration of industrial policy and in-        cial policy measures to prevent job
centive measures to create and increase           losses and regain jobs and productive
local manufacturing capacity to utilise           capacity lost in the recent past, and to
the opportunities of a more competitive           promote employment creation. In addi-
exchange rate.                                    tion to these sectors, other parts of the
  Labour, Business and Community                  economy with high levels of employ-
have tabled various proposals in regard           ment are also affected by the slowdown,
                                             42
                         AFRICAN COMMUNIST | April 2009

such as retail, housing construction, and         equity exposure in these sectors where
private services. Government will de-             possible and will make increased work-
velop proposals together with Labour              ing capital available to firms in large,
and Business in these sectors within four         labour-intensive sectors.
weeks to provide a rescue package to                Government will convene urgent
the affected industries. Such packages            meetings with representatives of busi-
will include reciprocal commitments by            ness and labour in distressed sectors to
companies of what they will contribute            develop appropriate support measures,
to turnaround strategies. Attention will          drawing on resources in the National
also be given to those sectors where              Jobs Initiative as well as in the IDC.
there are early signs of job losses and             Skills development and the promotion
distress, such as the electrical and elec-        of Learnerships and high-level skills will
tronics sectors, engineering and the              be an essential part of all sector recovery
building materials industry.                      programmes.
  The parties agree that special consid-            The parties recognise the opportuni-
eration must be given to measures to              ties in industries that combat the nega-
address the specific needs of SMMEs in            tive effects of climate change and believe
this crisis.                                      that South Africa should develop strong
  A special National Jobs Initiative, led         capacity in these green technologies and
by the Presidency that brings together a          industries. Accordingly it is agreed to de-
range of new and revamped separately              velop incentives for investment in a pro-
administered programmes will be                   gramme to create large numbers of
launched. The value of the new and re-            ‘green jobs’, namely employment in in-
vamped schemes is estimated at about              dustries and facilities that are designed
R10 billion over the three year Medium            to mitigate the effects of climate change.
Term Expenditure Framework. This will             Government will be asked to develop a
draw on resources in the IDC, the De-             proposal for consideration by the par-
partment of Public Works, Department              ties. This proposal will, where appropri-
of Labour, the dti, the Department of             ate, build on current initiatives of green-
Minerals and Energy and other depart-             ing existing manufacturing and service
ments. We agree to identify the extent of         activities.
resources required as well as additional            All the social partners, including
sources of funding that can be made               parastatals, will encourage local pro-
available to increase the impact of the           curement of supplies, services and other
National Jobs Initiative in response to           requirements wherever possible in order
the crisis. The National Jobs Initiative          to maintain and increase local output
will have as its mandate the coordinated          and employment levels. This applies
and accelerated financing of industrial           particularly to the large procurement
and special employment measures as                programmes attached to major public
well as social measures to avoid job              and private investment projects where
losses and to actively increase the num-          cooperation amongst social partners can
ber of employed persons.                          be employed to promote local suppliers.
  To these ends, the following additional         This will also include procurement of
measures are currently agreed;                    pharmaceuticals and medical supplies,
  The IDC will increase the level of its          clothing and textile products, food and
                                             43
                          AFRICAN COMMUNIST | April 2009

perishables, stationary, computers, office          nities at the centre of their investment
equipment and consumables, automo-                  mandates and to mobilise their available
biles and transport services, consulting            funds for the retention of employment
services and printing. The review of pref-          and the creation of the largest number of
erential procurement legislation should             jobs per unit of capital invested. They
be undertaken with urgency.                         will be asked to place rescue package
   The parties recognise existing commit-           proposals to government and the Task
ments in respect of international sport-            team within 4 weeks, to give effect to
ing events. They commit to interact with            the proposals contained herein. DFIs
the sport authorities to ensure that a              could provide preferential funding to
buy local policy be followed for the Con-           firms under distress to offset short-term
federation Cup and the 2010 Fifa World              funding pressures that are the result of
Cup. We undertake to intensify the                  the global economic context- for in-
Proudly South African campaign so that              stance through working-capital solu-
the message to ‘buy local’ reaches more             tions.
consumers.                                             The parties recognise that the pro-
   The parties acknowledge the problem              posed mandatory rationing of electricity
of customs fraud and illegal imports and            may have a negative impact on employ-
are concerned that as a result of the               ment and therefore agree that the pro-
global economic crisis, the level of illegal        posed approach be revisited in a way
imports may increase. They recognise                that addresses any negative impact on
the progress made in building an effec-             job retention.
tive enforcement mechanism. They                       The parties recognise the need for ad-
agree that urgent attention should be               equate infrastructure to lay the basis for
given and additional capacity be de-                growth and development. At the same
voted to official enforcement capacity,             time, the parties agree that excessive in-
including SARS, to further improve their            creases in administered prices may exac-
effectiveness and impact. To this end, it           erbate the negative impacts of the cur-
is agreed to strengthen risk management             rent situation and agree that increases in
and invoice-analysis systems, set up                administered prices should carefully bal-
dedicated units for vulnerable sectors              ance these different considerations.
(commencing with the clothing sector)                  The parties agree that the availability
and support high-profile arrests and                and flow of credit are vital to the func-
prosecutions of offenders to combat                 tioning of a modern economy. To this
lawlessness within the import regime.               end they agree that Nedlac should ur-
   Trade measures will be used to ad-               gently engage with the financial sector
dress import surges, dumping and to ad-             to discuss ways to promote a continued
dress the short-term crisis of vulnerable           flow of investment finance to the real
sectors. These will include fast-tracking           economy.
of investigations and recommendations
by ITAC, and that ITAC initiates more               Employment measures
investigations.                                     Retaining and increasing employment
   Development finance institutions need            will be at the centre of our coordination
to place the promotion of productive                and efforts in the period ahead. We be-
employment and decent work opportu-                 lieve that a combination of measures on
                                               44
                         AFRICAN COMMUNIST | April 2009

public employment, private sector initia-           In addition, there are opportunities to
tives as well as training can complement          create stable employment through the
the other elements of this joint commit-          public service employing people for cer-
ment and can ensure that we avoid mas-            tain tasks that are currently outsourced
sive job losses in the period ahead.              or casual. Government will do a review
These measures include the R10 billion            of its outsourcing practices to improve
National Employment Initiative men-               the conditions of work.
tioned previously.                                  The expanded public works pro-
   Organised business and its affiliates          gramme (EPWP) is an important part of
undertake to urge and encourage CEOs              government’s capacity to provide em-
of companies to do everything in their            ployment to those who are not ab-
power to avoid retrenchments as a re-             sorbed into the labour market. While
sult of the global economic crisis, and to        the first generation Expanded Public
instead invest in their people and mod-           Works Programme exceeded its target of
ernise their productive capacity in order         1 million work opportunities in 5 years,
to avoid job losses and in anticipation of        many of the jobs were short term and
the opportunities that will emerge after          had limited positive impact on the lives
the global economic recovery. At the              of the targeted unemployed people. This
same time we expect that policies on ex-          will now be scaled up and improved so
ecutive remuneration will show appro-             that the total number of jobs days of-
priate restraint .                                fered will be ten times higher than the
   The parties commit to a jobs strategy          EPWP Phase 1, at 2 million one year full
that seeks to respond to any contem-              time equivalents. The work days will be
plated large retrenchment in the econ-            distributed amongst 4.5 million recipi-
omy, i.e. affecting more than 50 workers          ents over the five year period between
or those in vulnerable sectors, through a         2009 and 2014. We agree to the following
mix of support offered by the DTI and             commitments regarding the next phase
other government agencies as envisaged            of the expanded public works pro-
in different parts of this document.              gramme (EPWP II):
   Employers and Labour will be encour-             EPWP phase 2 will create a cumulative
aged to explore all possible alternatives         total of 2 million full time equivalent
to retrenchments. They will be encour-            (FTE) jobs for poor and unemployed
aged to utilise facilitation by the CCMA          people in South Africa so as to con-
as provided for in section 189 and 189A           tribute to halving unemployment by
of the LRA. The parties agree to explore          2014, through the delivery of public and
ways to strengthen the CCMA in regard             community services. One FTE is equal to
to its role in avoiding retrenchments.            one full time job per year. This will scale
   4.5. Public sector employment: it is           up from 210,000 FTEs per year in 2009/10
agreed there is scope for improving the           to 610 000 FTE jobs in 2013/14, averaging
employment intake by the public sector            about 400 000 FTEs per year. The 2 mil-
in the process of strengthening the edu-          lion full time equivalents will be created
cation, health and social work sectors            through the creation of a cumulative to-
and criminal-justice system in SA and             tal of 4.5 million work opportunities
filling departmental vacancies at na-             from 2009/10 to 2013/14 financial year.
tional, provincial and municipal levels.            More efforts will be undertaken to
                                             45
                         AFRICAN COMMUNIST | April 2009

mobilise all spheres of government and             tance of public works programmes in
public bodies to contribute to the EPWP            combating poverty.
outputs.                                             4.8 Training and skills development
   Training will be offered in appropriate         need to be prioritised, quality improved
forms in the different areas of public sec-        and the learnership programmes en-
tor work and the training programmes               hanced. In addition to other measures
will be accredited by the relevant au-             to avoid retrenchment, one further op-
thorities.                                         tion that the parties will consider is
   The EPWP Phase II will be imple-                training layoffs, financed by the NSF and
mented with urgency in light of current            SETAs, for workers whose employers
conditions;                                        would ordinarily retrench them and
   The average duration of the jobs be             which can be introduced on terms that
considerably longer than in EPWP I;                would keep them in employment during
   A central fund in government be used            the economic downturn but re-skill
to stimulate a greater take-up and im-             them as an investment for the future
pact;                                              economic recovery.
   The role of communities in developing             The parties agree that the NSF and
their own local employment schemes                 SETA grant disbursement administra-
and the role of NGOs, trade unions and             tion will be streamlined to increase effi-
CBOs in offering advice on priorities and          ciencies.
in administering resources for and in                SETAs that are connected to the same
running them will be promoted through              supply-chain will be encouraged to
Community Work Programmes;                         work together and where feasible, to
   Partnerships with the Business Trust            merge, to ensure that funds are utilised
and organised labour’s Job Creation                in the most labour-absorbing parts of a
Trust will be strengthened and ex-                 supply-chain and to reduce administra-
panded.                                            tion costs.
   One million unemployed youths,                    All parties will use their best endeav-
women and disabled people will be tar-             ours to encourage additional funding for
geted in public employment pro-                    the National Jobs Initiative , to enable it
grammes directed at socially useful ac-            to increase the spending on special proj-
tivities, including home-based care,               ects that are aimed at absorbing unem-
crèches, school cleaning and renovation,           ployed persons into gainful employ-
community gardens, removal of alien                ment.
vegetation, tree planting and school                  We agree to ensure full respect for and
feeding.                                           observance of fair labour standards and
   Government will increase its contribu-          national legislation, in responding to the
tion beyond the new R4.1bn commit-                 economic crisis.
ment to the first three years of EPWP II             We have taken note of the concern by
if the programmes exceed expectations,             organised labour that there is an in-
and                                                creasing trend in the use of outsourcing
   The social partners agree to update             and labour brokers and a rise in non-
the public works framework agreement               compliant practices in labour broking
achie-ved after the Jobs Summit in                 and agree that Nedlac should on an ex-
1998/99, cognisant of the critical impor-          pedited basis, discuss outsourcing and
                                              46
                         AFRICAN COMMUNIST | April 2009

labour broking with a view to address-             creases in the level of hunger in SA. It is
ing labour’s concerns.                             agreed to work on an implementation
                                                   plan, including timeframes and institu-
Social measures                                    tional arrangements, for a Food for All
We recognise the need to scale up the              programme to procure and distribute
social interventions to address the jobs           basic foods at affordable prices to poor
challenge. One means of doing so is                households and communities.
through developing effective social plans            The Parties agree to investigate the
at industry and company level in order             cost drivers in the food value chain in or-
to ensure that job losses are avoided,             der to develop measures that will be
workers are retrained and communities              taken to improve the logistics of food
are cushioned from the effects of the              distribution such as transportation,
economic crisis. This requires additional          warehousing, and procurement in order
resources as well as other mechanisms              to reduce food prices in the long term.
to improve the development and utilisa-              Strengthened enforcement of compe-
tion of social plans. These issues are cur-        tition measures will be used to act
rently the subject of a review of the so-          against food cartels and collusion, which
cial plan policy framework and the par-            inflate food prices. It is agreed that gov-
ties will finalise their proposals through         ernment will encourage and support
NEDLAC on an expedited basis.                      food production schemes in rural and
  The parties commit to improving ben-             peri-urban areas for households to grow
efits through the Unemployment Insur-              their own food and that support in the
ance Fund, subject to regular review and           form of seeds, fertilizers and pesticides
annual actuarial valuation of the fund,            will be provided.
and will review its policies to ensure               Other government measures will sup-
that it is providing an effective response         port existing community schemes,
to the prevailing conditions.                      which utilise land for food production in
  The Parties agree to a targeted Emer-            schools, health facilities, religious insti-
gency Food Relief Programme that will              tutions and urban and traditional au-
enhance food accessibility and afford-             thority areas.
ability to the poorest communities expe-             In spite of fiscal pressures currently
riencing difficulty as a result of the eco-        faced because of lower than expected
nomic crisis, targeting families in dis-           revenues, Government will maintain so-
tress. The programme will be under-                cial transfers and other key social expen-
pinned by a food distribution strategy.            ditures, including increasing access to
The programme will be supported                    free basic services such as water and
through partnership with the private               electricity, to the poor. Government will
sector, NGOs and community based or-               also progressively and steadily, starting
ganisations. It will be aligned to existing        in 2009, extend the Child Support Grant
initiatives such as Social Relief of Dis-          to age 18 and reduce the men’s age re-
tress Fund and other food security                 quirement for the social old age pension
strategies.                                        to 60 years.
  The parties agree on the need for spe-             The parties recognise the important
cial measures to ensure that the global            role that cooperatives can play in ab-
economic crisis does not lead to in-               sorbing the unemployed and the poor
                                              47
                         AFRICAN COMMUNIST | April 2009

into employment as well as in providing            cial markets, and discourage and pe-
services in poor communities. Accord-              nalise predatory and risky behaviour.
ingly the parties agree to promote the             Measures to be considered include dis-
establishment and funding of coopera-              couraging short-term, speculative in-
tives including housing cooperatives and           vestment behaviour and other practices
to ensure proper support for and regula-           which contributed to the recent eco-
tion of the cooperative sector.                    nomic shocks.
                                                     As part of the need for comprehensive
Global coordination                                reform of International Financial Institu-
The parties recognise that the global              tions (the World Bank and the Interna-
economic crisis has shown deep weak-               tional Monetary Funds families of insti-
nesses in the governance of globalisation          tutions) to meet the challenges of the
and that, in an era of connected                   21st century, we will seek to ensure that
economies, all countries pay a high price          developing countries in general and
when systemic weaknesses manifest                  those in Africa in particular, are better
themselves. They agree that it is neces-           represented in the international financial
sary to respond to the crisis at a global          institutions. The revision of the man-
level, in collaboration with other                 dates of IFIs should better reflect devel-
economies, with immediate initiatives              opmental objectives, including decent
and also with measures that address the            work.
underlying weaknesses.                               The parties recognise that the WTO
  One common objective that the par-               Doha Round outcomes should be devel-
ties will pursue in different global fo-           opmental in character. The parties agree
rums, including the G20, is to have a              to pursue a country position that max-
more equitable, balanced model of                  imises South Africa’s developmental ob-
global economic cooperation. This in-              jectives. We will seek to positively influ-
cludes the need for bold changes to the            ence the outcome so that it leaves SA
global financial and social architecture           with policy space for new industrial de-
to respond to the current crisis and               velopment; supports employment in
avoid future crises caused by inadequate           vulnerable sectors and expands decent
regulation of critical markets and eco-            work opportunities in the local econ-
nomic activity as well as insufficient             omy.
global collaboration with respect to bal-            The ILO should be strengthened at
anced development and to ensure fair,              global and field structure level, including
just and equitable outcomes to all, par-           through modalities to ensure full and
ticularly the poor in the developing               universal observance by all countries of
world.                                             the core labour standards on freedom of
  Effective capital markets are critical to        association, the right to collective bar-
the performance of all economies. The              gaining, non-discrimination, no forced
parties support the prudent regulation             labour and no child labour. We will call
of SA capital markets and the retention            on all member-states to fully implement
of appropriate capital controls.                   the Declaration on Social Justice for a
  Parties agree that SA should introduce           fair globalisation.
further discussions at the G20 level on              South Africa’s approach in engaging in
measures to enhance stability in finan-            the G20 summit process is driven by the
                                              48
                         AFRICAN COMMUNIST | April 2009

desire to ensure that the trajectory of            Social partnership in response
global growth and development that                 to the crisis
emerges from the current crisis is not             South Africa faces very significant chal-
subject to the instability brought about           lenges in the period ahead, as do coun-
by the large global macro-economic im-             tries across the world. There are a num-
balances that characterised growth in              ber of positives that we can build on. We
the last decade. This will require greater         have regulation in place on banking and
efforts at macro-economic collaboration            credit that can be of help in the turmoil
and coordination. Of critical importance           in financial markets. We have the capac-
in the current environment is to sustain           ity to use counter-cyclical fiscal policy to
growth in developing countries where               counteract the slowdown in the econ-
access to capital markets for financing            omy. We have a well-developed and ad-
counter cyclical policies has effectively          vanced system of social dialogue, a
been closed. This will require the exten-          strong institution in the form of Nedlac
sive use of the balance sheets of IFIs as          and a tradition of working together as
well as measures to improve sustained              constituents to address the social chal-
growth in domestic demand in develop-              lenges. These strengths will be drawn on
ing countries. We agree that the stimu-            as we continue to develop and adjust
lus packages of developed countries                our response to the global economic cri-
should reflect the commitment to ensure            sis and in the implementation of the var-
that vulnerable people in developing               ious commitments.
countries with weak balance sheets are               We are particularly concerned about
not unfairly penalised by the crisis. At           the impact of the slowdown on the poor
the same time, we need to ensure that              and the most vulnerable. It is for this
development assistance to developing               reason that we have agreed to the meas-
countries is not scaled down.                      ures outlined in this statement. The
  The South African government will                measures embrace elements that seek to
ensure full consultation and collabora-            promote economic growth and sustain-
tion with its social partners on the po-           able businesses, assist and protect work-
sitions it takes in future G-20 Summits            ers and the vulnerable and help our
and meetings of Finance Ministers, in-             country to meet its developmental ob-
cluding through briefings and updates to           jectives.
Nedlac and the circulation of position               Protecting and expanding decent work
papers. We will ensure that social part-           is at the core of our programmes. For
ners are enabled to participate in the             this reason we are committed to various
G20 process in whatever ways are prac-             measures to reduce the possibility of re-
ticable. South Africa will also call on the        trenchments. Nevertheless, with exist-
G-20 to ensure much stronger consulta-             ing high levels of unemployment and
tion with social partners in its future            poverty, though they have reduced in re-
processes. South Africans also recognise           cent years, the condition of the poor and
their responsibilities as the only Africans        the vulnerable have to be addressed di-
at the G-20 table to ensure much greater           rectly and in the shorter run, through
collaboration with intuitions such as the          employment creation programmes, pro-
AU.                                                moting sustainable livelihoods, public
                                                   investment, and effective social relief
                                              49
                        AFRICAN COMMUNIST | April 2009

and support.                                       The parties agree to develop Action
   Increasing levels of investment and           Plans to ensure timely implementation
ensuring that we develop a strong and            of the above actions and monitoring and
competitive economy are key impera-              evaluation thereof.
tives in addressing the challenge of the           The following Task Teams have been
global economic crisis and therefore re-         established to give effect to this:
main important objectives in this period,          Leadership Team
as we prepare for takeoff beyond the               Investment and Financing Task Team
economic crisis.                                   Social Interventions Task Team
  The measures that have been devel-               Employment Task Team
oped are intended to be an immediate               Distressed Sectors Task Team.
and urgent intervention to ensure that             We are all committed to the pro-
South Africa responds before the local           grammes contained in the document,
economic and social situation deterio-           and we will articulate this commitment
rates. The implementation of the com-            and ensure that our constituencies un-
mitments will be monitored in follow up          derstand and implement the actions in
engagements of Nedlac and with the               the plans that are relevant to them. ★
Presidency.




                                            50
                           AFRICAN COMMUNIST | April 2009

CAPITALISM’S CRISIS

Key challenges facing the
working class movement
and our government
The conflict between capital’s ‘hostile brothers’ offers
opportunities for the working class, argues Rob Davies




T
             he capitalist world economy              that this will be a mere short term hic-
             is in the midst of a serious cri-        cup that will allow an early return to
             sis – certainly the most seri-           business as usual for global capitalism.
             ous since that of the late 1960s           A question that is fast becoming cen-
             and early 1970s, and threatens           tral and urgent in such circumstances is
to become the most serious since the                  how should the working class move-
Great Depression of the late 1920s and                ment and our government respond –
1930s. The current crisis is clearly much             both to the immediate prospects of de-
more than the “credit crunch”, or “finan-             clining production and job losses and to
cial crisis” as it manifest itself. Its impact        longer term challenges posed by this cri-
is being seen in a recession (contracting             sis?
production) in the advanced industri-                   An appropriate response requires, in
alised countries and sharply reduced                  the first instance, understanding critical
growth rates in developing countries.                 elements of the phase that we are now
Global trade has contracted sharply.                  in. The current crisis of global capitalism
Commodity prices have tumbled. Stock                  has features both specific to the particu-
piles of unsold and unsaleable com-                   lar stage of capitalist development we
modities are being observed across the                are now in, and also generic characteris-
world, and important industrial sectors               tics common to all periods of capitalist
are in deep trouble. All of this is being             crisis. The specific features arise, inter
accompanied by lay-offs of workers. In                alia from:
the case of South Africa, job lay-offs                  ● the globalised character of contem-
have thus far been most notable in the                porary capitalism, where transnational
mining sector and in the motor industry,              economic activity driven by transna-
where 36 500 jobs were wiped out be-                  tional corporations, has emerged as the
tween July 2008 and February this year.               dominant and dynamic activity;
  The Central Committee has already                     ● the “financialisation” of investment
examined the causes and dimensions of                 that has seen the rise of massive “secu-
the current crisis of capital. On the ba-             rities” and “derivitative” trading that
sis of this, a document adopted at the                created a huge bubble that partly
Central Committee meeting held late                   masked the onset of the current crisis;
last year cautioned against any notions               and
                                                 51
                         AFRICAN COMMUNIST | April 2009

  ● the increasing ecological unsustain-           sis first became manifest as a crisis af-
ability of the current trajectory of capi-         fecting financial capital and financial
tal accumulation (the looming climate              sectors. This was because the “financial-
change crisis).                                    isation” of investment that emerged as a
  The generic features common to all               key feature of contemporary globalisa-
periods of capitalist crisis were analysed         tion had spawned a massive bubble of
by Marx in volume III of Capital. Marx             trading in financial assets more and
explained that because of its anarchic             more removed from the performance of
nature, capitalism is inherently unable            the “real economy”. This bubble partly
to develop along a path of uninterrupted           masked the underlying over-production
growth and development. The system                 of capital in the real economy of produc-
periodically confronts crises arising fun-         tion, and arguably partly delayed the
damentally from over-production of                 onset of the crisis. With that bubble now
capital. This does not mean over-pro-              having burst it is clear that the current
duction of products relative to human              crisis is global, affecting all parts of the
need. In this sense there is always un-            capitalist world; and that it is very sig-
der-production. Rather capitalist crises           nificant in extent, in the sense that the
of over-production need to be recog-               bottom of the cycle is still nowhere in
nised as over-production of capital (in            sight. It has already seen a very signifi-
the form of capitalist commodities) com-           cant destruction of assets in the hands of
pared to the possibilities of realising            banks and financial institutions, partic-
profit on that capital. In a system where          ularly in the advanced industrialised
it is profit rather than social need that          centres of capitalist power, but it has
drives economic activity, this is funda-           now clearly moved way beyond that to
mental.                                            include destruction of capital existing in
  Capital needs also to be recognised as           the real economy of factories, machinery,
existing in various forms, corresponding           employed labour power, as well as
to what Marx called the circuit of capi-           stockpiles of unsold finished commodi-
tal. These include                                 ties which can no longer be profitably
  ● money or financial capital seeking             realised.
investment opportunities;                            A time of capitalist crisis inevitably
  ● capital invested in means of produc-           brings about a fierce competitive strug-
tion and employing labour power;                   gle to determine which capitals are go-
  ● commodities produced as a result of            ing to bear the brunt of the destruction
the application of labour power and the            of capital necessary to create the condi-
means of production that are awaiting              tions for the system once again to grow
sale, and finally;                                 and develop. Marx described this as fol-
  ● money capital realised from the sale           lows: “…as soon as it is no longer a
of commodities which is available to               question of sharing profits, but of shar-
seek new investment opportunities in               ing losses, everyone tries to reduce his
the next circuit.                                  own share to a minimum and to shove it
  A period of capitalist crisis is a period        off on another. The class, as such, must
which necessarily sees a destruction of            inevitably lose. How much the individ-
capital existing in some or all of those           ual capitalist must bear of the loss ie: to
forms. The current global economic cri-            what extent he must share in it at all is
                                              52
                         AFRICAN COMMUNIST | April 2009

decided by strength and cunning, and               emerging now have not just involved, as
competition then it becomes a fight                was the case with classical Keynesian
among hostile brothers.” (Capital Vol III          measures, deficit funding of infrastruc-
Chapter XV).                                       ture programmes or government public
   Positioning ourselves to respond to the         works, they have also included very sig-
current global crisis means, among other           nificant funding of “rescue packages” di-
things, recognising that we are in the             rected at strategically important capital-
midst of “a fight among hostile broth-             ist enterprises, sometimes even involving
ers”. In the current phase of capitalist           taking some degree of state ownership
globalisation this fight of “hostile broth-        in them. Initially these “bail outs” were
ers” takes place not just between capi-            directed at failing banks and financial in-
tals in different firms located in specific        stitutions but are now also involving sig-
countries, but between transnational               nificant subsidies to the motor industry
capitals spanning several countries and            with other distressed industrial sectors
even between branches of the same                  likely to follow as the crisis deepens.
transnational corporation located in dif-             What we are now seeing could even
ferent countries. Put concretely, it is not        be described as some form of defensive
just a question of whether General Mo-             industrial policy. Governments of the
tors bears more of the losses arising from         advanced capitalist countries are pump-
the necessary destruction of capital in            ing large sums of money, precisely to en-
the motor industry than Toyota, but                sure that in the battle of “hostile broth-
whether it is the Toyota or General Mo-            ers” it is not flagship companies from
tors plants in the capitalist centres or           their own countries that go to the wall.
those in the periphery that will bear the          Moreover, in cases where it is clear that
brunt.                                             particular transnational corporations
   In recent months we have witnessed              will have to contract their operations,
governments of the advanced capitalist             subsidies and incentives are being de-
countries deploying massive sums of                ployed to try to ensure that it is not
money, in what have variously been                 plants and jobs located in their own
called “bail outs” or “stimulus pack-              countries that bear the brunt. Some-
ages”. These have been widely described            times, too, these efforts are being com-
as a return to Keynesian deficit financ-           plemented by “buy local” campaigns in-
ing and a retreat from the neo-liberal             volving even precise instructions to insti-
macro economic orthodoxy which pre-                tutions receiving government support to
vailed until recently. There is, no doubt,         procure locally. This is all happening de-
an element of truth in this. Clearly, had          spite lofty pronouncements in summits
neo-liberal hardliners won the debates             and multi-lateral institutions by these
in the US and elsewhere and there had              same governments that they are com-
been no “stimulus packages” the likeli-            mitted to working against any “resur-
hood is that, as in the 1920s and 1930s,           gent protectionism”.
the current recession would have been                 Unless we recognise that we are in the
tilted much further towards a full on de-          midst of a fierce competitive struggle be-
pression. However, there is also another           tween hostile capitalist brothers to de-
element that we need to understand.                termine which capital will be destroyed,
The “bail outs” and “stimulus packages”            and where, we will not be able to re-
                                              53
                         AFRICAN COMMUNIST | April 2009

spond adequately to the threat this                curement commitments.
poses to jobs and incomes of working                  A feature of many of the financial sup-
people and the poor in South Africa.               port packages that have been deployed
  What then would constitute the ele-              in the advanced capitalist countries is
ments of such a response? The Nedlac               that they are not strictly speaking WTO
task force that produced the recently              incompatible in that they do not involve
adopted Framework for a South African              the deployment of subsidies directly on
Response to the International Economic             trade. They do, however, tilt the balance
Crisis has, in my view, begun to sketch            much more strongly in favour of the sur-
out some of the key elements of an ap-             vival of the hostile brothers located in
propriate work programme. First, we                their own countries. In such circum-
need to accelerate industrial policy work          stances, we need to ensure that we do
across our industrial sectors with a par-          not disadvantage ourselves by buying
ticular focus on those most vulnerable to          into calls to preserve “free trade” and re-
job losses. This must identify new chal-           nounce “protectionism”. Such calls I
lenges such sectors are facing as a result         have suggested already, are being belied
of the global economic crisis. From this,          by the practice of intervening on behalf
we need to identify particular responses.          of particular capitals in the form of fi-
Some of these clearly will have to in-             nancial bailouts. Moreover, in circum-
volve the deployment of government fi-             stances where developing countries can-
nancial resources to support and sustain           not deploy these levels of financial re-
jobs. However, where we provide such               sources, we need to make sure that we
support, it must be conditional on spe-            do not disarm ourselves by unthinkingly
cific defined undertakings by capital,             giving up the non-financial defensive
particularly and immediately in respect            measures available to us as these are
of undertakings on refraining from, or at          likely to become even more important as
least moderating, job layoffs. But we              the crisis deepens.
need also to recognise that the sums de-              A further element of the response
ployed in the United States alone are              must be, as the Nedlac task team con-
several time the gross domestic product            cluded, to defend the infrastructure in-
of South Africa, and that we will never            vestment programme, on which we have
be able to match those levels of support.          already embarked. This will require con-
There is, thus, a premium on us also               siderable effort and creativity in a con-
identifying non-financial support meas-            text where market financial mechanisms
ures. These must include “trade reme-              are unlikely to provide financial re-
dies” such as anti-dumping and coun-               sources at least on the same terms as
tervailing duties, the judicious applica-          originally anticipated when a number of
tion of new tariffs where we have space            these projects were launched. Maintain-
under WTO rules to do this, and the                ing the infrastructure investment pro-
more vigorous policing of our borders to           gramme and indeed complementing this
deal with cases of illegal imports. At the         with an enhanced public works pro-
same time we need to push forward                  gramme is fundamental to defending
much more earnestly and vigorously the             work opportunities in this time of capi-
Proudly South African campaign – par-              talist crisis. Finally the response requires
ticularly taking this into the area of pro-        a series of specific “employment” and
                                              54
                         AFRICAN COMMUNIST | April 2009

“social security” measures, some of                the pressure of that crisis, workers took
which were outlined in the Framework               part in the famous Durban strikes and
document.                                          from this began to reorganise a demo-
   In the medium term we need a much               cratic trade union movement after the
deeper reflection on how we move to a              repression of the 1950s. This period of
more labour-absorbing growth path.                 our history is now recognisable as the
The growth path that we have been on               moment in which the balance of forces
since 1994 has not been able to deliver a          between the apartheid oppressors and
sufficient reduction in poverty, inequal-          oppressed began to change in favour of
ity and unemployment even at a time                the oppressed. The 1920s and 30s also
when growth rates where high. It will              saw a significant advance in the working
certainly not be able to do so with                class organisation at both trade union
growth rates much lower. We must                   and political level in many countries of
therefore re-orientate our focus much              the world. However, faced with the
more towards the domestic, regional                threat of a significant advance of labour
and south-south markets. With a global             and communist parties in countries like
economy in decline, and with the ad-               Italy and Germany, capital chose to un-
vanced industrialised countries in reces-          leash the forces of the most reactionary
sion, the domestic, regional and south-            elements of fascism and Nazism. In
south markets are the only real                    those days the countries of Europe faced
prospects for us to experience any                 a stark choice between socialism and
growth. This does not mean of course               barbarism. Capitalism opted for bar-
that we should not try to take advan-              barism.
tage of a more competitive exchange                   In many respects, the challenge facing
rate to expand exports throughout the              the working class in South Africa today
world, but we need to recognise that               can be summed up as: can it make a
there is a sharply reduced demand in the           great leap forward in terms of the ad-
advanced industrialised countries to               vancing working class influence in all
which much of our trade has thus far               sites of power, similar in dimension to
been directed.                                     the great leap forward in working class
   In the longer term the challenge facing         organisation what occurred during the
the working class and the poor in our              last big capitalist global crisis of the
own country and across the world is                1970s? If not, we may yet find, especially
this: how we move ourselves beyond the             if the crisis deepens, that we face on a
system of capitalism, which is incapable           global scale a stark choice between so-
of guaranteeing even basic conditions of           cialism and barbarism.
economic security to working people                   Of course, the issues and challenges
and the poor across the world.                     facing the working class in today’s crisis
   The current crisis is, as indicated ear-        are very different from those in the past.
lier, already the most serious since the           The immediate challenge today is: Can
1970s and could well become the most               working class power and influence be
severe since the Great Depression of the           built in such a way that it leads and
1920s and 1930s. The crisis of the 1970s           hegemonises a recovery programme?
saw a massive leap forward in working              Can conditionalities imposed on support
class organisation in South Africa. Under          programmes to distressed capitalist con-
                                              55
                        AFRICAN COMMUNIST | April 2009

cerns be structured in such a way that           mative, we may yet find that the current
they lead incrementally to enhancing             crisis of capitalism becomes a period of
working class influence over the eco-            opportunity for the working class and
nomic growth path of our country? Can            the socialist project.                ★
the crisis lead also to building working
class power and influence at the point of        Cde Davies is an SACP Central Commit-
production? If we can devise strategies          tee Member and Deputy Minister of
to answer those questions in the affir-          Trade and Industry




                                            56
                          AFRICAN COMMUNIST | April 2009

CAPITALISM’S CRISIS

We were equally ill-prepared
for the crisis
Ben Turok says that Marxist theorists were lulled
into lethargy by the appearance of perpetual growth




A
            lthough Karl Marx warned                  Part of the reason for our own compla-
            long ago that financial crisis          cency is that we have been persuaded by
            was inevitable in capitalism,           government spokesmen that South
            communists around the                   Africa has followed prudent financial
            world have been taken by                policies and so we are cushioned from
surprise by the current crisis. It seems            crisis. It may be that our regulators of fi-
that the boom in the developed coun-                nancial institutions, banks, etc have not
tries, and to some extent in the rest of            been allowed to go into spectacular
the world, has lulled everyone into some            gambling with hedge funds and deriva-
kind of lethargy that everything will be            tives on the scale in the US and Europe,
alright. After all there have been major            but our bankers are no angels, and con-
economic advances in China, India and               tagion reaches everywhere. Our real
other developing countries, and even                economy is also not as strong as we
Africa has shown signs of GDP growth,               imagine.
even if it was based on higher prices for             It should be noted that the current cri-
mineral exports.                                    sis emerged not in the sphere of produc-
  But these improvements are not                    tion but in the financial sphere. The crit-
enough to explain the complacency                   ical issue is that what started as a finan-
about economic prospects to be found in             cial crisis in the US, spread throughout
many countries. There has also been a               the world’s financial institutions, soon
huge deficiency in theoretical work                 impacting on the real economy. This has
about the fundamentals of capitalist                now become a cyclical phenomenon.
economics and the possibilities offered             South Africa, which has a relatively ef-
by Marxism. Theoretical work has fo-                ficient financial sector, cannot be com-
cused on the nuts and bolts of capitalist           placent. Jobs are being lost, businesses
economics, for instance a critique of               closed down, and living standards af-
macroeconomic stabilisation, to the                 fected.
great neglect of fundamental theory. We               The evidence is mounting daily that
are paying quite heavily for this neglect,          we are being affected substantially. Our
in that as the crisis hits, alternatives are        gross domestic product (GDP) dropped
few. If capitalist theorists are unarmed            1,8 % in the fourth quarter of 2008. There
presently, and resort to Keynes as a last           are major contractions in retail, manu-
resort, Marxists are equally disarmed,              facturing and mining. The private sector
including in South Africa.                          is suspending or cancelling fixed invest-
                                               57
                          AFRICAN COMMUNIST | April 2009

ment projects. In January 2009 factory              pend on credit for their businesses or for
output plunged a record of 11% com-                 ordinary consumption goods, are in for
pared to Jan 2008, and manufacturing                a hard time. Of course, the working class
production fell 1.2% in January, the sev-           is the first to suffer. Layoffs are substan-
enth month of falling output. There                 tial, labour agencies are very busy, and
were huge contractions in S A’s motor               outsourcing and casualisation are grow-
vehicle and iron, steel and machinery in-           ing.
dustries which shrank 50% and 27 % re-                Much has been published in the daily
spectively during the month. Mining                 press about the scale of meltdown in the
output tumbled 11 % too and the top                 US and EU. What started as a subprime
mining companies say they may have to               crisis in US banks soon spread to other
cut between 20 000 to 50 000 jobs this              institutions and into Europe, so those
year. There was a dramatic plunge in our            governments are in a huge scare about
exports which took the trade deficit to a           where it will end. The political implica-
record R17,4-billion. This figure is partic-        tions are as interesting as the economic
ularly important since it shows that our            effects. This was revealed at a special
exports are not paying for our imports.             conference of the United Nations Gen-
The difference can only be covered by an            eral Assembly in Doha on 29 September
inflow of foreign capital but this has              2008 attended by most finance ministers
slowed down substantially and is unre-              and international agencies. The confer-
liable since most of it is hot speculative          ence was supposed to deal with “Fi-
capital.                                            nancing for Development”, but what
  The stock exchange has lost half its              surfaced was a serious concern for the
value. This has hit BEE beneficiaries par-          world economy.
ticularly hard because their growth was               The background to this event lies in
mostly based on the market value of the             2002, when the United Nations General
shares given them. They incurred large              Assembly convened a conference in
debts to obtain these shares, which                 Monterrey, Mexico, which adopted a
were supposed to be paid for from the               document on “Financing for Develop-
increased value of the same shares and              ment”, called the Monterrey Consensus.
from dividends. These people are now                This document was a comprehensive
stranded with large debts. As the stock             and extremely favourable analysis of the
exchange crashed, Patrice Motsepe lost              development needs of the South, though
$1,1-billion of his fortune, Oppenheimer            it was couched in somewhat idealistic
$700-million and Johann Rupert $ 2,6-               terms. Many other conferences followed
billion, revealing once again how well              with similar sentiments such as the
the rich have done under our democratic             “Paris Declaration on Aid Effectiveness”
government and how unequal is our so-               in 2005 and the Accra conference on the
ciety. There is no shortage in our coun-            same theme in 2008. It is clear that the
try of the attitudes that created the fi-           governments of the North feel the need
nancial crisis in the US – unrestrained             to articulate a vision of a fairer world or-
greed and rising cronyism. .                        der even while they pursue narrow self-
  For the less privileged members of our            serving interest, as in the World Trade
society, credit has tightened, banks are            Organisation.
more risk averse, and so those who de-                Of considerable interest at the Doha
                                               58
                         AFRICAN COMMUNIST | April 2009

conference was the unexpected plea by              work of surveillance in the North. All
leaders of the North for joint interna-            agreed that totally new measures are
tional action to solve the current finan-          needed to regulate the financial sector.
cial crisis. They conceded that the source           Because of the failure of monitoring
of the crisis is bad governance in the fi-         and regulation worldwide, there is now
nancial institutions of the North, and             a call for the reform of the IMF, includ-
that it led to contagion in the South.             ing the removal of the US veto power;
This is perhaps the first time that the            that the head of the IMF and World
North accepts this kind of responsibility          Bank should not be confined to candi-
for a global problem. Paradoxically they           dates from the North; and that repre-
also seem to look to economic growth in            sentation should reflect the diversity of
the South as part of the solution for all.         the world.
This is because growth has turned neg-               The financial crisis has shown how
ative in the North, while there is still           dysfunctional is the current interna-
sound growth in most parts of the                  tional financial architecture. The main
South. President Sarkosy of France, rep-           problem lies with the financial regula-
resenting the European Union, declared             tory system which wholly ignored what
that Europe cannot solve the financial             was going on with hedge funds and de-
crisis without India, China and Latin              rivatives, (which rose to $600 trillion by
America. This amounts to an admission              2007) especially in the US but not only
of a new balance of power internation-             there. There was a clearly inadequate
ally, reflected at the conference, in the          regulation and supervision of banks and
economic power of China, India and                 financial markets. So even if there were
Brazil, plus the oil power of the Middle           discrepancies in many countries in prop-
East.                                              erly managing their financial systems,
  The head of the OECD stated that this            the problem lay in the US and Europe,
was an emergency conference and                    not in the developing countries. In other
marked a turning point in international            words, the heart of advanced capitalism
relations. He argued that there had been           has a cancer which was ignored. Even a
a failure in the financial regulatory en-          month before the crisis the IMF was un-
vironment leading to the crisis and it             aware of the problem.
was urgent for major public interven-                Since then, there have been a series of
tions and a review of the global financial         meetings at the highest levels to discuss
architecture. Interestingly, the US stalled        financial regulation and reform of the
proceedings throughout, moved 17                   global financial architecture with little
amendments, and strongly resisted any              agreement on what needs to be done.
discussion of reform of the financial and          The G20 has established working groups
trade architecture.                                dealing with accounting regulations and
  In the side seminars, the causes of the          transparency, international cooperation
crisis received detailed attention with            on financial regulation, reforming the
the main conclusion that it arose due to           IMF, and reforming the World Bank and
catastrophic market failure and the total          other multilateral development banks. A
failure of the regulatory systems of the           parallel process has been started by the
financial sector in the North, especially          UN General Assembly under the leader-
the US. The IMF had failed to do its               ship of Joe Stiglitz with much emphasis
                                              59
                         AFRICAN COMMUNIST | April 2009

on reforming the global financial archi-          whether we have built a strong economy
tecture. This activity has much support           able to withstand international and lo-
from civil society organisations which            cal crisis. Several questions come to
are keeping a close eye on the debate.            mind.
  Leaders of the North often say that               Do we have a clear understanding of
the “emerging markets” (developing                the structure of our economy? Do we
countries) will lead the way out of the           know where real power in decision-
recession, and they hope that particu-            making lies? Do we understand the bal-
larly China and India will continue to            ance of class forces in the economy, in
grow their economies thereby sustaining           the sense of the power of the private sec-
demand for goods and services from the            tor in relation to the state sector? Do we
developed countries. Also, China owns a           fully appreciate how capital is repro-
huge slice of the foreign debt of the US,         duced in our system and who benefits?
which is now dependent on China’s                 What is our view of an economic strat-
support.                                          egy which has been based on supporting
  On the other hand, the panic in the             the private sector to the point where it
North has led to large capital outflows           is more profitable than ever before?
from the South, including South Africa,           Have we focused too much on the finan-
which has led to the collapse of stock            cial sector to the neglect of industry?
markets, exchange rates and quite a               Have we relied too much on export-led
large loss of reserves, despite the pru-          growth by a narrow sector of the econ-
dent policies pursued for some years.             omy while neglecting to build the do-
Commodity prices have plunged and                 mestic economy?
volumes of demand for exports are be-               On the social side, why have we failed
ing cut everywhere.                               to substantially reduce the huge number
  We must recognise that what started             of unemployed? Is our welfare response
as a financial crisis has now turned into         to poverty correct and is it sustainable,
a total economic crisis with serious ef-          given the cost to the fiscus? Do we want
fects on the real economy. This means             a welfare state rather than a productive
that fixing the IMF and World Bank, and           developmental state?
indeed the whole banking sector will                Finally can it be correct that a move-
not be enough. The consequences of                ment that was built on the vision in the
economic decline will be with us for              Freedom Charter of sharing the coun-
some time, globally and in South Africa.          try’s wealth has one of the highest in-
  This means that the constant refrain            equality ratios in the world, and this af-
that the crisis was “not of our making”,          ter 15 years in power? I am sure a Marx-
and that “we are less vulnerable than             ist analysis could answer these ques-
others” does not really help those who            tions. Perhaps the African Communist
lose their jobs. So, while the global per-        ought to start doing this.               ★
spective is very important, since it re-
veals the crisis of international capital-        Cde Turok is the author of the recently-
ism, we have to pay attention to our              published “From the Freedom Charter to
own backyard.                                     Polokwane; the Evolution of ANC Economic
  We have to re-examine our own fiscal            Policy”, and editor of New Agenda, a
and monetary policies since 1994 to see           Journal of Social and Economic Policy
                                             60
                         AFRICAN COMMUNIST | April 2009

KZN PEC REPORT

The global crisis proves
Socialism’s relevance today
These are edited extracts from the KZN SACP PEC Report to the
February Provincial Council Meeting, presented by the Provincial
Secretary, Cde Themba Mthembu




A
            s part of the ANC-led al-              cial sector, both the public developmen-
            liance we have agreed to en-           tal financial institutions and the private
            ergetically pursue economic            financial sector.
            transformation in order to               In so far as the developmental finan-
            create more jobs and oppor-            cial institutions (DFIs – eg. Ithala, IDC,
tunities for sustainable livelihoods for           DBSA, Mafisa, etc) are concerned we
the masses. This requires the develop-             have two critical tasks. The first is that
ment of an industrial strategy that will           of ensuring that the financial resources
primarily focus on investment in infra-            in the hands of these institutions are in-
structure and the productive economy.              vested in our developmental priorities,
Our macro-economic policies (whether               infrastructure and job creation. The sec-
it be budget deficit, budget surpluses, in-        ond is that of ensuring that the boards
flation targeting, etc) must be guided by          of these DFIs are substantially represen-
such industrial strategy rather than the           tative of the working class and poor
other way round.                                   communities, rather than be populated
   In addition we have identified the              by narrow BEE types, who often use
building of a large, progressive co-oper-          them to support their selfish accumula-
ative sector, including co-operative               tion interests, outside of the broader de-
banks, as an essential component of                velopmental mandate, as we have seen
building sustainable livelihoods for the           with the IDC and Ithala lately.
majority of the people of our country. In-           To reposition these DFIs, we will ask
deed we are proud that as the SACP,                the incoming government after the 2009
through our financial sector campaign,             elections to undertake a comprehensive
we have ensured that there is indeed               review of the role of these institutions,
now progressive legislation on co-oper-            as well as all state-owned enterprises,
atives and co-operative banks. Our                 including a comprehensive forensic au-
branches have a huge responsibility to             dit to identify where these have been
bring energy into these endeavours.                used for corrupt purposes.
   For the SACP it is going to be very im-           It is also very clear that the banking
portant that as part of transforming the           and insurance capitalists are hell-bent
current economic trajectory and driving            on reversing the very many advances we
an industrial strategy, we particularly fo-        have made, through our financial sector
cus on the transformation of the finan-            campaign, towards the transformation
                                              61
                         AFRICAN COMMUNIST | April 2009

of these institutions. We need to resus-           stability at the expense of an industrial
citate our financial sector campaign to            policy that will develop domestic pro-
deepen the struggles for creating a pri-           ductive capacity in our economy, thus
vate financial sector that serves our              making us less vulnerable to financial
overall developmental agenda                       speculative activity. We have also squan-
                                                   dered the opportunities brought about
The current capitalist global financial            by the demand for commodities by not
and economic meltdown                              directing the profits into domestic pro-
Socialism remains relevant today, as is            ductive activity. Instead we have em-
shown by the current global capitalist             barked on narrow BEE, and wasted bil-
crisis. It shows that capitalism is inca-          lions of rands on mega projects like the
pable of addressing problems con-                  Gautrain, the Arms Deal, Coega, the
fronting humanity today, and that it is            Dube Trade Port and the Pebble Bed
the persistent source of global human              Modular Reactor.
misery. Recently we have learnt that 40               The bourgeois media has also fostered
million more people have been added to             the myth that since 1996 our country has
the starving and the poor of the world.            embarked on fiscal discipline thus creat-
   The current global capitalist crisis is         ing better conditions for growth. But this
the worst since the late 1920s. Whilst it          `fiscal discipline` is a lie given the waste-
started as a crisis of the global financial        ful expenditure on the projects men-
sector, especially in the United States, it        tioned above. In so far as there has been
is now seriously beginning to affect pro-          fiscal discipline it has been in relation to
ductive economy. Its source is the in-             the lack of productive investment in the
creasing financialisation of the capital-          economy, lack of an aggressive approach
ist system, with increasing speculative            towards skills development and inade-
activity by the capitalist class, away from        quate resources in education and health.
investing in the productive economy.               Instead of dealing with some of the
Cde Fidel Castro has correctly charac-             pressing social problems we have been
terised contemporary capitalism as more            consumed by aids denialism peddled
of a casino rather than a productive               from the highest office in the land, and
economy.                                           ameliorative, albeit necessary, welfarist
   The impact of the current global crisis         measures that have not been accompa-
is already beginning to have enormous              nied by a developmental industrial strat-
negative effects on our economy. We are            egy.
beginning to see job losses and loss of               Instead of approaching our state-
income for the working class through               owned enterprises as a resource for driv-
long shut downs by sections of manu-               ing a developmental agenda, we have
facturing and mining. This shows that it           sold and/or run down some of them, no-
is a myth to say that our economic fun-            tably Telkom, sold to some of those who
damentals are in place and have helped             proudly tell us that `they did not join
us to weather this global capitalist               the struggle to be poor`. The latest of
storm. Instead, our government’s neo-              this saga is the scandalous sale of Voda-
liberal economic policies have made us             com, the cash cow of Telkom, to British
more vulnerable.                                   Vodafone, without any regard to the im-
   We have pursued macro-economic                  plications of this for the totality of our IT
                                              62
                         AFRICAN COMMUNIST | April 2009

strategy to serve the workers and the              Polokwane advances is how to com-
poor.                                              pletely rout the 1996 class project in the
  We have mindlessly pursued an infla-             state and our movement to re-position
tion-targeting strategy that is a blunt in-        ourselves to drive a developmental
strument and completely oblivious to               agenda beneficial to the majority of our
the developmental and job-creating im-             people, especially black working class
peratives for our country. Reduction of            youth. The SACP remains central in
the interest rate by 1%, welcome as it is,         achieving these objectives.
is yet another missed opportunity for
higher interest rate cuts in order to cre-         The global financial crisis:
ate better conditions to protect workers`          will South Africa be unscathed?
jobs and incentivise more investment in            For the last several months, headlines
our economy.                                       about the global financial crisis have reg-
  All the above realities are proof that           ularly made the front pages of interna-
capitalism is not in the interests of the          tional newspapers. Europe and the US
people of our country, and instead the             have come to realise that corporations
struggle for socialism is as relevant as           are facing the worst economic crisis
ever. Our own homegrown neo-liberal                since the 1929 crash. In South Africa, for
economic strategy has been pursued un-             the last 17 months economic analysts, as
der the rubric the `1996 class project` –          well as the Reserve Bank Governor and
an alliance between sections of our                the Finance Minister, have insisted that
cadre within the state and movement,               we will remain largely unaffected by the
elements of domestic and global capital,           crisis. This was because South African
and sections of an emergent BEE elite              banks were not exposed to the US sub-
which has also captured sections of                prime loan market. Indeed. South
state-owned enterprises like the Public            African mainstream analysts have con-
Investment Corporation and the Indus-              tinued to drum on about the supposed
trial Development Corporation.                     innate virtue of the unfettered free mar-
  We are heartened by the realisation of           ket. It is this unflinching faith in the ‘free’
the ANC`s Polokwane Conference of                  market that has totally blinded them to
some of the serious shortcomings of the            the reality.
1996 class project. The Polokwane Con-               The reality is that every single econ-
ference has re-affirmed the centrality of          omy in the world will be affected in
the state in economic development and              some way or another. This is because
the need for a state-led industrial strat-         the economies of every single country
egy, to which our macro-economic poli-             are now interconnected – through the
cies must be subject. The Polokwane                spread of neo-liberal globalisation.
Conference has re-affirmed the central-            Linked to this, all economies in the
ity of the ANC-led alliance in driving a           world, including South Africa’s, have
radical national democratic revolution.            been restructured through a process
The branches of the Party have an im-              that has become known as financialisa-
portant role to play in ensuring that              tion. It is the financialisation of the
these Polokwane resolutions become a               global economy that has made the cur-
reality.                                           rent global crisis possible, and it is the fi-
  One of the key challenges since the              nancialisation of the South African
                                              63
                         AFRICAN COMMUNIST | April 2009

economy that makes it almost impossi-              American and Old Mutual, shifted their
ble for our country to escape the fall out         primary listings to the London Stock Ex-
of the current global crisis.                      change. They did this to raise the prices
  Financialisation and the current crisis          of their shares through becoming part of
  The origins of the current financial cri-        the Financial Times Stock Exchange 100,
sis can be traced back to the global cap-          in which international tracker funds au-
italist crisis that erupted in the late            tomatically invest.
1970s. It was during this period that the            To boost share values most of the
post-war boom started to come to an                biggest companies also borrowed mas-
end and the global economy began to                sive amounts of money to buy back their
stagnate. With this, manufacturing and             own shares and thereby inflate the
service companies began to experience              prices. Even companies that were tradi-
declining profit rates as their markets            tionally manufacturers restructured
shrunk and their capacity far out-                 their operations to become partial in-
stripped demand for their products. By             vestment vehicles and often borrowed
the late 1970s, therefore, it was becoming         colossal amounts of capital to speculate
less and less profitable for companies to          on financial markets and in real estate.
re-invest in manufacturing and the serv-           They would then use the money made
ice sector. As a result companies started          on these investments to cover the repay-
looking for new ways of making profits             ments on their loans and make a profit.
and states assisted them by deregulating           Thus, capitalism became increasingly
the financial and insurance sectors along          dependent on the credit system to es-
with liberalising exchange controls.               cape the worst effects of stagnation in
Once the financial sector had been                 the ‘real’ productive economy. The man-
deregulated across the globe, first in the         ner in which corporate executives were,
North and then through Structural Ad-              and are, remunerated has also changed
justment Programmes in the South,                  since the 1970s. Most executives started
companies could speculate on any stock             to receive payments in share options,
market, bond or currency in the world.             meaning that they also had an interest
This provided them with new invest-                in boosting share prices. By the 1990s,
ment opportunities and a more prof-                the value of a company’s shares became
itable outlet for their capital.                   more important than the actual profit
  As part of the deregulation process,             prospects of the company. With this, the
banks, pension fund companies and mu-              financial sector of the economy became
tual funds from across the world were              dominant over the productive sector,
also allowed to begin speculating on               and the two sectors became discon-
currencies, bonds and shares. With this            nected. This meant that the prices of
massive expansion of the financial mar-            stocks and bonds were, and are, set in-
kets, including in South Africa, the value         dependently through speculation and
of a companies’ stock became far more              not through their real underlying value,
important than in the past. Companies              which has made the system volatile.
wanted their shares to be valued higher            This whole process has become known
to attract investors, like banks and pen-          as financialisation.
sion funds. In the case of South Africa,             With financialisation, manufacturing
our largest companies, such as Anglo-              companies – including those in South
                                              64
                          AFRICAN COMMUNIST | April 2009

Africa - also became involved in provid-            these lower interest rates to borrow
ing loans to consumers to purchase their            large sums of money to speculate on,
goods. For example, most of General                 amongst other things, real estate.
Motors’ profits derive from loans made              Homeowners also used the lower inter-
to consumers at high interest rates to              est rates to borrow against the value of
purchase the cars they produce. As such,            their homes to purchase a wide array of
the financialisation of the economy has             consumer goods. In a bid to cash in on
created new types of consumer credit in             this, banks, corporations and mortgage
the form of credit cards, hire purchase             lenders provided loans to all and sundry
schemes and sub-prime loans. To con-                – loans were even provided to individ-
tinue to maintain their standard of liv-            uals with appalling credit records.
ing the working poor, who have not re-                As part of the financialisation process,
ceived real wage increases since the                and the creation of new investment in-
1970s, began to rely more and more on               struments, the corporations that were
these forms of credit. This saw personal            involved in making these loans began
debt balloon in countries like the US               pooling them along with corporate and
and South Africa. With money pouring                credit card debts into credit derivatives,
into the financial markets, these markets           such as Collaterised Debt Obligations
also responded by expanding their ca-               (CDOs). These corporations then sold
pacity by creating new kinds of financial           these credit derivatives to other compa-
instruments for investors to speculate              nies. The idea was to offer some protec-
on. These new financial instruments in-             tion to the companies that were making
cluded futures, options, and importantly            these loans. Other banks and specula-
for the current financial crisis, credit de-        tors bought these credit derivatives.
rivatives.                                          These banks and speculators received
                                                    cash flows and interest from the deriva-
Financialisation increases                          tives they bought, but they also had to
the frequency of crises                             accept the risk if the debt - that was
Speculators have made massive profits               bundled into credit derivatives - was not
out of the financialisation of the econ-            paid back. For as long as people paid
omy. However, financialisation has in-              their bonds and credit card debt, the
creased the frequency of economic bub-              holders of these credit derivatives made
bles and crises. There have been over 100           massive amounts of money: by 2007 the
economic crises in different parts of the           derivatives market was estimated to be
world, including in South Africa, since fi-         worth as much as $ 180 trillion. Insur-
nancialisation began. The last major cri-           ance companies, like AIG, also became
sis, before the current one, erupted on             involved in the credit derivatives market
Wall Street between 1999 and 2002 and               by offering insurance against the non-
was linked to the bursting of the tech-             payment of debt that backed up these
nology bubble during which over $7 tril-            derivatives. For as long as people and
lion was lost. To overcome that crisis, in-         companies paid their debt, insurance
terests rates were lowered in the US so             corporations such as AIG made large
that consumers would spend, the econ-               profits.
omy would be stimulated and the crisis                In 2004 the seed was sown that led to
displaced. People and speculators used              the unravelling of this system and the
                                               65
                         AFRICAN COMMUNIST | April 2009

credit derivatives market. In that year,          pletely collapse. All of this has also led to
the US government started raising inter-          massive volatility on international stock
est rates and continued to do so for the          markets – in early October the Wall
next two years. The low interest rates            Street stock market plunged by 25% in
that had been used to lure people into            one week.
taking out sub-prime loans were also
deliberately and drastically increased by         Governments have stepped
the companies involved in making these            in to save the rich
loans. The result was that by 2006, mil-          Various governments around the world
lions and millions of people started to           have taken drastic measures to try and
find that they could no longer pay their          address the current financial crisis and
loans back. With this, the debts that             protect the interests of the rich. The US
gave credit derivatives their ‘value’ were        government has partially or fully nation-
no longer being paid. Companies like              alised most of its banks and insurance
Lehman Brothers, Citibank, Morgan                 companies, including Fannie Mae, Fred-
Stanley, Fanny Mae, Freddie Mac,                  die Mac, and AIG to save them from col-
Northern Rock, and Bear Stearns - who             lapse. Other governments, such as the
had been speculating on these deriva-             UK and Iceland, have also been nation-
tives - suddenly found that the value of          alising banks to save them. The fact that
these plummeted, and they were bur-               governments, who for years have pro-
dened with the bad debts that were part           moted the ‘free’ market and the privati-
and parcel of these derivatives.                  sation of services, resorted to nationalis-
  The result so far has been that over 80         ing banks highlights the extent of the
mortgage lenders, numerous hedge                  crisis. The problem with these national-
funds and many municipalities (that               isations, however, is that they were not
were also speculating on the derivatives          progressive nor were they aimed at ben-
market) went bankrupt along with some             efiting the poor. Rather governments
of the biggest investment banks in the            have used public money to take over
world. Insurance companies, like AIG,             these banks along with all of their debts.
that offered insurance against the non-           Vast amounts of money have been spent
payment of the debt - which been bun-             to protect the rich; while the debts of
dled into derivatives - also started to           these companies have been socialised.
face thousands of claims from specula-            Since September last year, the US, UK,
tors that were holding these derivatives.         Germany and Japan have been regularly
AIG simply did not have the money to              pumping hundreds of billions of dollars
pay all of these claims and they too              into stock and money markets to keep
went bankrupt. With so many compa-                private companies afloat. The US and
nies holding credit derivatives, which            UK governments have also started buy-
contained bad debts, banks became                 ing the bad debts and credit derivatives
scared of lending for fear that these new         that banks and investment companies
loans would not be re-paid if the com-            have in order to save them.
panies borrowing went bankrupt. Due                 In September and October last year,
to this, credit started becoming scarce,          the US made $700-billion available to
which has created a real possibility that         buy these bad debts; while the UK
the global financial system could com-            made almost $1-trillion available to do
                                             66
                         AFRICAN COMMUNIST | April 2009

the same thing. Such vast amounts of               cripple South Africa’s economy.
money could have been used to provide                 The real danger that South Africa
the poor with free healthcare, education,          faces, due to financial deregulation, is
food and other social services; but gov-           that many of the American and Euro-
ernments have rather spent this money              pean corporations that have been hit
on trying to bail out an elite group of            hard by the financial crisis own substan-
speculators. What we have been wit-                tial shares in the corporations that are
nessing, even if only temporarily, is a            listed on South Africa’s Johannesburg
new form of capitalism whereby wealth              Stock Exchange (JSE). For example, the
is being directed towards the rich even            biggest traders on the JSE are JP Mor-
more ruthlessly than under neo-liberal-            gan, Merrill Lynch, Morgan Stanley, the
ism. The end result is that in the coming          Deutsche Bank, Citibank and the North-
years it is going to be the poor who are           ern Trust Company – all of whom have
going to have to bear the brunt of this            been severely affected by the crisis. In
bail-out for the rich. In fact, there is a         fact, these companies along with other
very real possibility that many of the             foreign investors, own half of all JSE
countries of the South, including South            listed shares. Due to the current global
Africa, could see their entire economies           crisis, these companies have been with-
collapse because of the fall-out of the fi-        drawing their money rapidly from the
nancial crisis in the US and Europe.               JSE to move it into safer havens, such as
                                                   gold and US Treasury Bonds. This has
Why South Africa’s economy                         seen the average share value of JSE listed
is in danger                                       companies decline by almost 30%. These
The fact that the South African economy            massive outflows of money have caused
has also undergone financialisation -              the value of the South African currency
and has become intertwined in the                  to plummet.
global economy - means that we will not               The real danger that South Africa now
escape the fall-out of the current crisis.         faces is that with so much money flow-
Some South African banks, like Stan-               ing out of the borders, the country could
dard Bank, have been involved in specu-            begin to experience massive problems
lating on the global credit derivatives            covering the cost of its trade deficit. If
market, and have incurred losses. Old              this occurs, and it is very likely it will,
Mutual, lost over $ 1.4 billion when it            the country could experience a massive
found that its shares in Bear Sterns were          problem with its balance of payments.
almost worthless because of the current            The end result of this could be that
crisis. These losses on their own,                 South Africa could experience a financial
nonetheless, may not be enough to de-              meltdown. Indeed, numerous progres-
stroy these banks - which have led peo-            sive analysts, along with the Bank for In-
ple, such as the Finance Minister, to              ternational Settlements, have warned
falsely assure South Africans that we are          that such a dire crisis in South Africa is
safe. The problem, however, is that there          a very real possibility. Of course, like in
are many more dangers linked to the                the US and Europe, it is the poor in
current crisis, other than being exposed           South Africa who will be forced to bear
to the derivatives market, which could             the brunt of this should it occur..      ★

                                              67
                         AFRICAN COMMUNIST | April 2009

CAPITALISM’S CRISIS

World capitalism poses greatest
threat, says US spy chief
This article, drawn from the “World Socialist Website”
was provided as an addendum to the KZN SACP PEC Report
to its February Provincial Council meeting




I
      n testimony before the Senate                elaboration of the perspective of the US
      Committee on Intelligence Wash-              intelligence apparatus since the inaugu-
      ington’s new director of national in-        ration of President Barack Obama.
      telligence, Dennis Blair, warned                “The primary near-term security con-
      that the deepening world capitalist          cern of the United States is the global
crisis posed the paramount threat to US            economic crisis and its geopolitical impli-
national security and warned that its              cations,” Blair declared in his opening re-
continuation could trigger a return to             marks. He continued: “The crisis has
the “violent extremism” of the 1920s and           been ongoing for over a year, and econo-
1930s.                                             mists are divided over whether and when
  This frank assessment, contained in              we could hit bottom. Some even fear that
the unclassified version of the “annual            the recession could further deepen and
threat assessment” presented by Blair              reach the level of the Great Depression.
on behalf of 16 separate US intelligence           Of course, all of us recall the dramatic po-
agencies, represented a striking depar-            litical consequences wrought by the eco-
ture from earlier years, in which a sup-           nomic turmoil of the 1920s and 1930s in
posedly ubiquitous threat from Al                  Europe, the instability, and high levels of
Qaeda terrorism and the two wars                   violent extremism.”
launched under the Bush administration                Blair described the ongoing financial
topped the list of concerns.                       and economic meltdown as “the most
  Clearly underlying his remarks are               serious one in decades, if not in cen-
fears within the massive US intelligence           turies.”
apparatus as well as among more con-                  “Time is probably our greatest threat,”
scious layers of the American ruling elite         he said. “The longer it takes for the re-
that a protracted economic crisis accom-           covery to begin, the greater the likeli-
panied by rising unemployment and re-              hood of serious damage to US strategic
duced social spending will trigger a               interests.”
global eruption of the class struggle and             The intelligence chief noted that
the threat of social revolution.                   “roughly a quarter of the countries in
  The presentation was not only the first          the world have already experienced low-
for Blair, a former Navy admiral who               level instability such as government
took over as director of national intelli-         changes because of the current slow-
gence, but also marked the first detailed          down.” He added that the “bulk of anti-
                                              68
                          AFRICAN COMMUNIST | April 2009

state demonstrations” internationally               American capitalism, declaring that the
have been seen in Europe and the for-               “widely held perception that excesses in
mer Soviet Union.                                   US financial markets and inadequate
  But Blair stressed that the threat that           regulation were responsible has in-
the crisis will produce revolutionary up-           creased criticism about free market poli-
heavals is global. The financial melt-              cies, which may make it difficult to
down, he said, is “likely to produce a              achieve long-time US objectives.” The
wave of economic crises in emerging                 collapse of Wall Street, he added, “has
market nations over the next year.” He              increased questioning of US stewardship
added that “much of Latin America, for-             of the global economy and the interna-
mer Soviet Union states and sub-Saha-               tional financial structure.”
ran Africa lack sufficient cash reserves,             The threat assessment also included
access to international aid or credit, or           evaluations of potential terrorist threats,
other coping mechanism.”                            the “arc of instability” stretching from
  Noting that economic growth in these              the Middle East to South Asia, condi-
regions of the globe had fallen dramati-            tions in Latin America and Africa and
cally in recent months, Blair stated,               strategic challenges from both China
“When those growth rates go down, my                and Russia, centering in Eurasia. It like-
gut tells me that there are going to be             wise dealt with the war in Afghanistan,
problems coming out of that, and we’re              which the Obama administration is
looking for that.” He cited “statistical            preparing to escalate, providing a
modeling” showing that “economic                    scathing assessment of the Karzai
crises increase the risk of regime-threat-          regime in Kabul and the familiar de-
ening instability if they persist over a            mand for an escalation of the interven-
one to two year period.”                            tion in Pakistan. Nonetheless, the re-
  In another parallel to the 1930s, the US          port’s undeniable focus was on the dan-
intelligence director pointed to the im-            ger that economic turmoil will ignite
plications of the crisis for world trade            revolutionary challenges on a world
and relations between national capital-             scale.
ist economies. “The globally synchro-                 Blair’s emphasis on the global capital-
nized nature of this slowdown means                 ist crisis as the overriding national secu-
that countries will not be able to export           rity concern for American imperialism
their way out of this recession,” he said.          seemed to have taken aback some of the
“Indeed, policies designed to promote               Senate intelligence panel’s members.
domestic export industries—so-called                They have been accustomed over the
beggar-thy-neighbor policies such as                last seven years to having all US national
competitive currency devaluations, im-              security issues subsumed in the “global
port tariffs, and/or export subsidies—              war on terrorism,” a propaganda catch-
risk unleashing a wave of destructive               all used to justify US aggression abroad
protectionism.”                                     while papering over the immense con-
  It was precisely such policies pursued            tradictions underlying Washington’s
in the 1930s that set the stage for the             global position.
eruption of the Second World War.                     The committee’s Republican vice
  Blair also raised the damage that the             chairman, Senator Christopher Bond of
crisis has done to the global credibility of        Missouri, expressed his concern that
                                               69
                          AFRICAN COMMUNIST | April 2009

Blair was making the “conditions in the             preparing for what they see as a historic
country” and the global economic crisis             crisis of the existing order that could re-
“the primary focus of the intelligence              quire the use of armed force to quell so-
community.”                                         cial struggles at home.
   Blair responded that he was “trying to              Entitled Known Unknowns: Unconven-
act as your intelligence officer today,             tional ‘Strategic Shocks’ in Defense Strat-
telling you what I thought the Senate               egy Development, the monograph insists
ought to be caring about.” It sounded               that one of the key contingencies for
like a rebuke and a warning to the sen-             which the US military must prepare is a
ators that it is high time to ditch the ide-        “violent, strategic dislocation inside the
ological baggage of the past several years          United States,” which could be pro-
and confront the real and growing                   voked by “unforeseen economic col-
threat to capitalist rule posed by the cri-         lapse” or “loss of functioning political
sis and the resulting radicalization of the         and legal order.”
masses in country after country.                       The report states: “Widespread civil
   It may have been lost on some of those           violence inside the United States would
sitting at the dais in the Senate hearing           force the defense establishment to reori-
room, but when Blair referred to a return           ent priorities in extremis to defend basic
to the conditions of “violent extremism”            domestic order... An American govern-
of the 1920s and 1930s, he was warning              ment and defense establishment lulled
that American and world capitalism once             into complacency by a long-secure do-
again faces the specter of a revolutionary          mestic order would be forced to rapidly
challenge by the working class.                     divest some or most external security
   There is no doubt that behind the                commitments in order to address rapidly
façade of Obama, the US national secu-              expanding human insecurity at home.”
rity apparatus is making its counter-rev-              In other words, a sharp intensification
olutionary preparations accordingly.                of the unfolding capitalist crisis accom-
   Including Blair, Obama has named                 panied by an eruption of class struggle
three recently retired four-star military           and the threat of social revolution in the
officers to serve in his cabinet. The other         US itself could force the Pentagon to call
two are former Marine Gen. James                    back its expeditionary armies from Iraq
Jones, his national security adviser, and           and Afghanistan for use against Ameri-
former Army chief of staff Gen. Erik                can workers.
Shinseki, his secretary of veteran’s af-               The document continues: “Under the
fairs. This unprecedented representation            most extreme circumstances, this might
of the senior officer corps within the              include use of military force against hos-
new Democratic administration is in-                tile groups inside the United States. Fur-
dicative of a growth in the political               ther, DoD [the Department of Defense]
power of the US military that poses a se-           would be, by necessity, an essential en-
rious threat to basic democratic rights.            abling hub for the continuity of political
   A report that appeared in a magazine             authority in a multi-state or nationwide
published by the US Army War College                civil conflict or disturbance.” The phrase
last November, just weeks after the elec-           “an essential enabling hub for continu-
tion, indicates that the Pentagon and               ity of authority” is a euphemism for mil-
the US intelligence establishment are               itary dictatorship.
                                               70
                          AFRICAN COMMUNIST | April 2009

BOOK REVIEW

Timeless, instructive intervention
in the economic policy debate
Oupa Bodibe reviews Ben Turok's 50-year outline
of the evolution of our movement's policies




C
             de Ben Turok’s From the              I have no doubt that From the Free-
             Freedom Charter to Polok-          dom Charter to Polokwane will also be
             wane is well timed. First, it is   considered in that light – a compendium
             published amid global finan-       of ANC economic thought in one book.
             cial turmoil, affecting mostly     The difference is that in this current in-
developed economies, heralding state            stallment, cde Turok brings his enor-
intervention in the US, such as has not         mous experience to bear. The book is
occurred for decades. Secondly, it comes        also a collection of his various reflections
as South Africa is poised for general and       on the question of development gar-
provincial elections on 22 April 2009.          nered through his many years as an ac-
  The book is a useful contribution to          tivist, academic and more recently as a
the management of economic policy               member of parliament. He also brings
during these turbulent and                                     his practical experiences of
interesting times. Cde                                         post-colonial Africa to the
Turok must be congratu-                                        project, probably explain-
lated for taking the time to                                   ing the inordinate amount
chronicle, in a single book,                                   of time devoted to the pit-
ANC economic thought                                           falls of BEE and neo-colo-
from the struggle years, the                                   nialism. The book is acces-
transition and the first                                       sible and engaging and
decade and half of post-                                       written not only for spe-
apartheid South Africa. He                                     cialists in the field or those
has unintentionally re-                                        with extensive knowledge
peated the feat accom-                                         of ANC policies and devel-
plished with the publica-                                      opment studies. It is not
tion of Revolutionary               FROM THE FREEDOM           necessary to read it in full:
Thoughts of the Twentieth CHARTER TO POLOKWANE the chapters are relatively
Century, the anthology of          The Evolution of ANC        self-contained.       Anyone
major thinkers and revolu-            Economic Policy          wanting to understand the
tionaries on the subject in            by Ben Turok            evolution of ANC eco-
one book. For many ac- Publisher: NEW AGENDA nomic thinking from the
tivists the compendium is a                  (SA)              rudimentary           “African
useful and easy reference in ISBN: 978-0-620-42565-0 claims” through to the
one place.                             Price R150,00           Freedom Charter, RDP and
                                             71
                         AFRICAN COMMUNIST | April 2009

Gear, must read the book.                         outside the ranks of the ANC. Debates
   The book deals with many themes,               have already been raging post-Polok-
difficult to evaluate in such a short re-         wane as to whether the ANC will
view, which addresses three of the more           change its overall approach to the econ-
crucial: how ANC economic thinking                omy after the April elections. The ANC
can be characterised; the relation be-            leadership has also displayed enormous
tween Gear and previous ANC eco-                  caution by suggesting that there will be
nomic positions; and finally the way for-         “continuity and change” without
ward.                                             spelling out clearly what will change.
   On the first theme, the book goes be-             In relation to the second theme, cde
yond the unhelpful characterisation of            Turok dispels the myth, assiduously cul-
the ANC as neither capitalist nor social-         tivate by some of our cadres who pro-
ist, discourse that characterised debates         pounded economic orthodoxy, that
in the 1990s. Though cde Turok avoids             there is a linear progression from the
using ‘isms’ it is clear that ANC eco-            Freedom Charter, to the RDP to Gear.
nomic policy can be characterised as a            Much has been written and said on the
hybrid of radical African nationalism; so-        subject and the intention here is not to
cial democracy and socialist ideals. Even         rehash the debate. However, the argu-
if one were to accept the various inter-          ment boils down to this: Gear might
pretations of ANC economic policy, no-            contain social objectives embodied in
body can with a straight face argue that          the Charter and RDP, but it represented
the ANC stood for laissez faire capital-          a major departure from the develop-
ism. The chief concern that has driven            ment approach contained in the RDP
the ANC is building an inclusive, pros-           and that has influenced the movement
perous and equitable society. Histori-            for decades. The outcome was to sta-
cally, and as explained in the book, the          bilise government finances by reducing
ANC sought to avoid the lo- intensity             fiscal deficit and by radically bringing
democracy that characterised many post            down inflation. This was however
colonial societies in Africa.                     achieved at a major cost to the transfor-
   From Morogoro to the more recent               mation project as a whole. In the first in-
pronouncements, the ANC sought to                 stance, developmental goals were sub-
avoid the revolution stalling at the in-          ordinated to the goal of fiscal rectitude
stallation of a popularly elected govern-         and there was a stubborn refusal to con-
ment while the material basis of oppres-          sider alternatives. Elevating financial
sion remained intact. The ANC project is          products, coupled with other packages,
intended to empower the masses of our             like rapid trade liberalisation, privatisa-
people and overcome the schisms of                tion (“restructuring”) clearly hobbled
race, class, gender and space: the ANC’s          the capacity of the state to lead transfor-
project is aimed at avoiding elite capture        mation. The task was given to private
of the transformation project akin to             capital or, more specifically, to foreign di-
many projects in post-colonial Africa.            rect investment. But an export-led strat-
The book’s scathing argument that the             egy did not take off outside of autos,
post-1994 project has been more ‘re-              heavy chemicals and minerals, and the
formist than revolutionary’ will un-              South Africa’s productive capacity was
doubtedly generate debate within and              severely undermined by rapid opening
                                             72
                         AFRICAN COMMUNIST | April 2009

up of the economy.                                mines the neo-liberal orthodoxy with-
   The beneficiaries of fiscal and mone-          out carrying with it the rest of the SADC
tary conservatism have been white cap-            and the African region. Nepad has
ital, especially interests located in fi-         proven ineffectual and also not appro-
nance and globally connected corpora-             priate to a regional development strat-
tions. A smattering of black individuals          egy.
as capitalists or the middle class have             Although cde Turok writes primarily
also reaped the benefits of post-                 about the ANC, the inescapable ques-
apartheid South Africa. Neo-liberal or-           tion that the left confronts today, in the
thodoxy has rewarded those with en-               midst of the global financial crisis, is for
dowments at the expense of the masses.            how long will we be trapped in a Keyne-
This does not mean to say that the wel-           sian box? I have no doubt that if Keyne-
fare and social service measures were             sian policies that have suddenly found
not important. But these pale into signif-        favour were implemented in South
icant when compared to the wealth                 Africa, they will go a long way in im-
amassed by a few white and black cap-             proving the lot our people, but the prop-
italists                                          erly relations will be largely undis-
   This raises a strategic question not           turbed. Is it not time that the ‘S-word’
fully addressed in the book. Can the              come back in the equation. However, it
ANC tame capital, including the minor-            must not be some antiquated notion of
ity black capitalist class, to support its        socialism but a vision that serves as a
economic vision of building the produc-           pole of attraction for those seeking a
tive base of the economy and realising            new vision and society, be it environ-
mass empowerment? The searching                   mentalist, gender or other activists.
open-ended question in the book is                  Still cde Turok must be congratulated
whether the black bourgeoisie can be re-          for putting the issues on the table, and I
lied upon to build new site of accumula-          urge that the terms of reference of the
tion to challenge the entrenched power            debate be expanded. Otherwise we run
of white monopoly capital, or has it              the risk of navel-gazing while the world
been co-opted or simply powerless in              passes by. In essence I am challenging
the bigger scheme of things.                      socialists to start putting content to the
   Finally, looking ahead.. Cde Turok             task of laying the foundations of social-
more-or-less argues for a return to an            ist transition. Otherwise once this crisis
RDP project with a strong emphasis on             eases, it will be back to business as usual
the developmental state. However, there           as occurred in other recent global eco-
is no clear account of whether the cur-           nomic crises.                             ★
rent balance of forces will make such a
project viable. What is equally missing is        Cde Bodibe is an SACP activist, a former
what should be the strategy for the re-           Cosatu researcher and currently works
gion. South Africa alone will not be able         for the Competition Commission
to carry forward a project that under-




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                         AFRICAN COMMUNIST | April 2009

THE MEDIA

Too many capitalist voices,
no working class voices
David Niddrie sets out the inevitable consequence
of newspaper ownership by one class




C
            urrent debates on how best             an ever less professional willingness to
            to address abuse by various            rush into print gross and damaging inac-
            newspaper journalists of               curacies; unverified allegations; and
            South Africans’ hard-won               righteous mediocrity and jaundiced
            right of freedom of expres-            bourgeois opinion masquerading as fact
sion focus on the symptoms rather than             and logical deduction.
the causes of a major failing of South               The bizarre story by journalist Fiona
Africa’s post-1994 democratic system.              Forde, headlined ‘All the President’s
  Section 16 of the South African consti-          women’ and blazed across the front
tution grants ‘everyone … the right to             page of the Sunday Independent in Jan-
freedom of expression, which includes              uary this year is the most immediate
… freedom of the press and other media             and obvious example2: an untested and
… freedom to receive or impart infor-              baseless allegation that the President of
mation or ideas …’1                                the country was engaged in an intimate
  These rights are explicitly intended to          relationship with a 24-year-old Lut-huli
protect the media against the kind of              House clerk while continuing a relation-
draconian censorship imposed on pre-               ship with his permanent partner. Two
democracy generations of South Africa’s            weeks after publication of the original
journalists. The current generation, in-           inaccuracies the Sunday Independent re-
cluding those on the left, jealously guard         tracted it and acknowledged that its
against any infringement of what is one            only source – the young woman al-
of the freest publishing regimes in the            legedly intimately involved with the
world. For many of the journalists con-            President – had lied. When asked why
tinuing this country’s proud tradition of          she had done so, she gave an instructive
exposing abuse and exploitation, the               response: ‘I told you what you wanted
constitutional rights provide a bulwark            to hear.’
against those who might otherwise have               A month earlier the Sunday Independ-
the economic or political power to si-             ent ran another front-page lead to the
lence them.                                        effect that SACP General Secretary
  But the right of freedom of expression           Blade Nzimande was responsible for
has in the 15 years of South Africa’s free-        spreading allegations of the President’s
dom been used to justify retention of              private life to undermine his political
massively skewed and increasingly par-             prospects3. Faced with a similar lack of
tisan information media, and to protect            credible sources, the paper ran a grudg-
                                              74
                         AFRICAN COMMUNIST | April 2009

ing and almost invisible acknowledge-             Joost van der Westhuizen is currently
ment a week later that Nzimande was               suing Afrikaans Sunday Newspaper
not behind the allegations. But it did so         Rapport and check-out counter maga-
in one paragraph at the bottom of page            zine Heat over publication of stills from
2. Few saw it, and most readers will re-          a video apparently showing him semi-
main with the impression that Nzi-                naked with a woman who is not his
mande was responsible for using smear             wife, and apparently snorting some sort
tactics to attack a political opponent            of drug5. Why either publication is enti-
(several newspapers – notably City Press,         tled to intrude on Van der Westhuizen’s
routinely inaccurate on the subject of            right to privacy (protected under Section
the ruling party – continue to insist,            14 of the constitution) in this way is un-
without any visible evidence, that Nzi-           clear – assuming he is the male in the
mande is seeking the deputy presidency            video, which he denies. Heat offers the
and views Motlanthe as a rival for the            video on its website.
position).                                          This level of invasion of privacy and
  Stories like these leave South African          personal – to say nothing of routinely
readers, dependent on newspapers for              inaccurate – pillorying of public and
information enabling them to interpret            semi-public figures is a relatively new
and understand events around them,                phenomenon to the South African press,
with an impression that is inaccurate,            raising the questions: Why? Why now?
unfounded and provided as ‘fact’ simply           and: Why are so many journalists pre-
because many journalists are predis-              disposed to believe sources making of-
posed to believe anything that fits a par-        ten ridiculous allegations, and to rush
ticular – and usually anti-Alliance – per-        into print without establishing even the
spective, and to impose it on their read-         probability of truth, much less truth it-
ers.                                              self?
  Another example, also featuring Nzi-              It is useful to recall how South Africa’s
mande and Luthuli House, comes from               newspapers ostracised veteran journal-
the Mail and Guardian4: an equally                ist Max du Preez for suggesting in 2001 it
untested and unsustainable allegation             would be in the public interest to report
that he heads a non-existent ANC ‘war-            on the private life of Motlanthe’s prede-
room’ located in Luthuli House, whose             cessor. Many of those, editors included,
task is to work out ways to smear Cope            who cut Du Preez dead on the basis of
leaders. The story was remarkable for             one President’s right to privacy, argued
containing not a single verified fact. It         equally strongly this year in favour of
was entirely untrue, as a glance at the           the Sunday Independent’s right to invade
meetings’ schedule and attendance reg-            another’s – on the basis of an entirely in-
ister at ANC headquarters would have              accurate allegation.
demonstrated.                                       This change has been driven by a
  Barely a week goes by without simi-             range of objective and subjective factors.
larly inaccurate and unverified stories in          Newspapers traditionally viewed
South Africa’s newspapers. The targets            themselves as conduits for information
are normally, but not inevitably, on the          which enabled their readers to under-
left of the Alliance.                             stand, and make informed decisions
  Thus former professional rugby player           about the world, in which they lived.
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                          AFRICAN COMMUNIST | April 2009

The test for most stories, but particularly         this millennium thus saw a steady ero-
controversial stories, was whether they             sion of newsroom staffing levels and a
were true and in the public interest;               steady decline in journalists’ relative in-
with ‘public interest’ meaning that it              come levels. The average newsroom age
was important and to the benefit of the             has dropped consistently over the pe-
broader society that the facts presented            riod, with less and less experienced jour-
became generally known (rather than                 nalists being responsible for decisions
simply being gossip-level ‘interesting’).           over what could legitimately be pub-
This is a complex issue with vast grey              lished. This process was compounded,
areas. But none of the examples used                ironically, by the democratic break-
above passes the test of being both true            through of 1990-1994. Literally dozens of
and in the public interest.                         journalists who had learned their trade
   The economics of the newspaper in-               (and their understanding of the complex
dustry have played a key role in the                and nuanced reality of South African
move away from this role. The challenge             politics) covering the intense struggles of
of commercial television to newspapers’             the 1970s and 1980s departed en masse
established advertising revenues in-                in the first half of 1994 for public sector
creasingly exposed the profit motive un-            posts, stripping newsrooms of some of
derlying the provision of information.              their most experienced – and, impor-
Newspapers responded in two ways:                   tantly, progressive – personnel. The re-
   To get advertising, newspapers needed            sult was newsroom – and, increasingly,
to get readers (media broadly works on              editorial executive positions – primarily
the equation of the more readers, the               staffed by relatively young journalists
more advertising), and the ‘true and                with little experience or understanding
public interest’ imperative has increas-            of the complex interplay of race, class,
ingly given way to winning readers by               culture and ideology that had moulded
whatever means – competitions, give-                the emerging and formally democratic
aways and, increasingly, stories that are           society which it was their task to accu-
‘interesting’ rather than ‘in the public in-        rately record.
terest’. With this imperative, accuracy                They did so in a world rapidly remak-
has become less central than mar-                   ing itself after Francis Fukuyama’s ‘end
ketability. This leads inevitably to the            of history6’ into a uni-polar, neoliberal
Van der Westhuizen video-tape ap-                   and globalised economy in which Amer-
proach.                                             ican held hegemonic sway; vast wealth
   While chasing readership helped re-              accumulated through the virtual econ-
tain or increase revenues, maximisation             omy was ‘aspirational’; and the expecta-
of profit also required trimming the cost           tions of the ‘South African miracle’ en-
side of the commercial equation –                   couraged the educated middle classes
steadily lowering costs, and specifically           (journalists among them) to believe they
staff costs, one of the three major cost            were part of a global cycle of perpetual
items in newspaper publishing (along                growth and conspicuous brand-name
with printing and distribution, neither of          consumption. South Africa’s macroeco-
which lend themselves easily to slashing            nomic stabilisation, the conservative
savings).                                           economic approach this required and
   The 1980s, 1990s and the first years of          the appearance of economic growth
                                               76
                          AFRICAN COMMUNIST | April 2009

overlaid with the ‘two economies’ ratio-             served on Mbeki’s international invest-
nalisation for the growing disparities in            ment council) has continued unabated
society combined to create a newsroom                since, particularly as his Irish and other
perception of centre-right policies and              titles battled to maintain revenues and
thinly disguised greed as politically and            ‘repatriated’ profits from the South
socially ‘normal’, ‘right’, ‘natural’ and in-        African operation were used to cushion
evitable. Differing views were deviant,              the blow. His most recent rationalisation
‘populist’, ‘ultra-left’ and generally con-          in December has seen more than 50
temptible. The Mbeki decade of increas-              journalists axed from the South African
ingly centralised government ever-more               operation. This is no mean feat in a
intolerant of debate (much less criticism)           group already dangerously understaffed
has reinforced this view of ‘normality’.             as a result of earlier rounds of rationali-
  The consequences of ‘cost-efficiencies’            sation.
and ‘down-sizing’ have been most                       At the same time, the combination of
vividly witnessed in the Independent                 South Africa’s already highly concen-
Group of newspapers (publishers of the               trated media ownership and control
Sunday Independent, The Star, The Ar-                contracted further in the face of compe-
gus, The Daily News and others). Once                tition for revenues from television and
South Africa’s biggest newspaper group               elsewhere – outdoor advertising, com-
(called the Argus group), controlled by              mercial radio and so on – to the extent
mining capital, the group was acquired               that, today, a single company owns and
by Irish media owner Tony O’Reilly lit-              controls not only South Africa’s pay-tel-
erally days before South Africa’s first              evision operation, DStv, but also:
democratic election – and with the un-                 More than 40% of newspapers sold
fortunate blessing of the ANC because it             daily – with more than half the newspa-
represented the biggest foreign invest-              per readers;
ment in South Africa post-1990. O’Reilly,              More than 60% of South African mag-
notorious elsewhere as a penny-pinch-                azines sales (5,9-million individual sales
ing, profits-first-last-and-always propri-           a month); and
etor, showed his intentions early, re-                 Nearly a quarter of community and lo-
structuring to such an extent that the               cal newspapers7.
group’s most senior editorial executive                The company that owns these,
quit within the year, prompting a warn-              Naspers, has its foundations in Nasion-
ing from the Freedom of Expression In-               ale Pers, the formal media mouthpiece
stitute that ‘the (new) management of                of the Cape-based National Party of PW
the company is more interested in prof-              Botha. Naspers today dwarfs its original
its than in protecting free and independ-            incarnation, but remains essentially un-
ent speech’. Massive ‘rationalisation’ of            transformed. Some BEE ownership has
the South African operation followed,                been grafted uncomfortably on to some
cutting swathes through the group’s ed-              elements of its local and global opera-
itorial personnel, substantially narrow-             tions (now stretching across four conti-
ing down the range of perspectives ? by              nents). Naspers remains a highly conser-
consolidating political coverage into a              vative entity generally antagonistic to
single political bureau serving all news-            anything but the most business friendly
papers in the group. O’Reilly (who                   political environment.
                                                77
                          AFRICAN COMMUNIST | April 2009

  This level of concentrated media                   recovering. Now owned by Avusa
power is unprecedented in a democracy,               (which also owns the Sunday Times, its
even in Silvio Berlusconi’s Italy and Mar-           daily offshoot The Times and half of
garet Thatcher’s Britain, but has passed             Business Day) the Sowetan limps along as
virtually without comment in South                   a pale imitation of the Daily Sun, no
Africa – or serious examination by the               longer haemorrhaging money, but liter-
Competition Commission. And the bulk                 ally hundreds of thousands in sales and
of South Africa’s print media – with                 millions in readers behind its competi-
more titles per capita than are available            tor.
in the USA – are directed at a compara-                Whatever criticisms of the Daily Sun
tively tiny middle-class audience. The               there may be – and any paper willing to
massively successful Daily Sun (a Nas-               run ‘Tokolosh ate my grandmother’ as a
pers title) is the only daily title aimed ex-        front page headline will have many crit-
plicitly at the working class – known in             ics – its tearaway success has turned
the trade as ‘the mass market’.                      conventional wisdom among media
  Media owners’ obsession with middle                strategists on its head, demonstrating
class readership is at the heart of the              that the chronically over-saturated mid-
tragic story of the Sowetan. The paper               dle-class market has little potential fu-
entered the 1990s as the media success               ture growth. New readers are to be
story in South Africa, with daily sales              found in the working class and in the
routinely around 250 000. Under apart-               denizens of the ‘second economy’ the
heid it had been the poor relation of the            mainstream press continues to regard as
Argus group, as South Africa’s only daily            a separate and not-too-interesting soci-
targeting black readers. Political opti-             ety:
mism and a dynamic and uncertain so-                   The working class is a vast and barely
cial environment encourage newspaper                 tapped market that wants to read news-
sales, and the Sowetan was set for a glo-            papers – the Daily Sun’s readership after
rious future as the doyen of black-read              less than a decade in the field is almost
newspapers. The Sowetan was not part                 the same size as that of all other South
of the O’Reilly package. It was sold sep-            African dailies combined – and is still
arately to BEE company, Nail. Under or-              growing.
ders from Nail chief executive Saki Ma-                Working class readers may want
cozoma it moved upmarket to serve                    newspapers, but they are discriminating:
black readers in the top two income                  they consistently don’t buy newspapers
brackets – the BMW class that had                    with which they can’t identify – witness
moved out of the townships and into                  the Sowetan’s sad history under Maco-
the historically white suburbs. The                  zoma and the fact that more than 15% of
BMW drivers ignored it in favour of pa-              Daily Sun readers today had never
pers other (white) middle class readers              bought a newspaper before they bought
supported, while its loyal working class,            their first copies of the Daily Sun. They
township readers abandoned the up-                   don’t buy newspapers targeting the
market Sowetan in their thousands. The               middle-class readers, even when those
Sowetan lost half its sales in less than a           papers attempt to broaden their appeal
year, leaving working class readers wide             (as is the case with the Independent
open for the Daily Sun and never fully               Group papers) by attempting to visually
                                                78
                          AFRICAN COMMUNIST | April 2009

and in terms of their content to ‘popu-             has literally characterised the South
larise’ their images.                               African majority (whose representatives
   A final factor in answering the ques-            played such a central role at Polokwane)
tion ‘why?’ has been the slow-burning               as being a separate society, a ‘second
political contest within the ANC and the            economy’ which was not part of the us
broader Alliance over the ANC’s policy              for whom the newspapers are produced
direction and the attempt to streamline             and by whom they are written. Looked
accountability in both the party and the            at over a longer period, it is the in-
government. Opposition to the manifes-              evitable outcome of the failure of the Al-
tations of the 1996 Class Project in gov-           liance to drive its original media objec-
ernment and the ANC were slow to co-                tive, reflected in the original Reconstruc-
alesce, and remained largely unrecog-               tion and Development Programme
nised by South African newspapers un-               (RDP), of facilitating diversity in the me-
til shortly before they culminated in the           dia8. The removal of any class compo-
breakthrough at Polokwane.                          nent in the thinking of the ANC in the
   The newspapers’ response to the                  formative years of the democratic era
sharpening contest within the Alliance,             distorted achievement of ‘diversity’ into
a contest with clear ideological over-              a vulgar racial numbers game. ‘Diversity’
tones and an explicit class character, was          was assessed by the number of black
unsurprising.                                       journalists, of black managers and of
   Their owners had increasingly cast               black shareholders. The result was a de-
aside the covering of ‘independence’ in             crease in diversity.
their drive for profit; their newspapers               Of more immediate significance, it has
were and remain commodities for con-                demonstrated that media owned by the
sumption by the middle-classes and ac-              bourgeoisie, and operated by middle-
cordingly reflect the world from a mid-             class functionaries in the thrall of bour-
dle class perspective; their editorial staff        geois ideology will ultimately respond as
had been subject to a sustained juniori-            the voice of the bourgeoisie if its domi-
sation and ‘downsizing’ leaving them                nance is challenged.
less competent than in the past to accu-               There may be merit to the Polokwane
rately assess and record the process un-            resolution for a state-run media tribunal
folding before them and the claims and              rather than the current self-regulatory
counter-claims of different players;                system – it is useful to note the views of
newsrooms and editors’ offices were                 Commissioner of the Competition Com-
also witnessing a growing challenge to              mission Shan Ramburuth, who has
policies and practices they had been ac-            some experience in matters of regula-
climatised into accepting as ‘natural’,             tion. He believes that ‘self-regulation is
‘normal’ and ‘right’. They responded,               to regulation what self-interest is to in-
perhaps understandably, initially with              terest’. And the current press ombud
bewilderment and subsequently with                  system has manifestly failed. But what-
disapproval, and in some cases with out-            ever the merits of the Polokwane posi-
right hostility.                                    tion, there is little prospect that state-
   This has been less a conspiracy than             mandated regulation will fundamentally
the logical outcome of the 1996 Class               change the perspective of currently pub-
Project – a hegemonic initiative which              lished newspapers. While the extremes
                                               79
                          AFRICAN COMMUNIST | April 2009

of journalistic irresponsibility referred to        sification of media control and on
above may be curbed by a more rigorous              broadening access to the media, and the
system of regulation, newspapers will               organisation has taken no steps towards
continue to disapprove of much of what              investigating the establishment of a
the ANC and the Alliance stand for, and             medium reflecting events from the per-
will continue to exercise their right of            spectives of its overwhelmingly working
freedom of expression to articulate that            class support base.
disapproval and opposition. They will                 Its own publication, Umrabulo, theo-
continue to reflect the norms and stan-             retically published quarterly, managed
dards of their economic and social base,            just one edition in 2008 and none at all
owned by capital and operated by mid-               this year. Alarmingly the ANC has opted
dle classes subject to capital’s hegemony.          instead to direct its energies at publica-
These norms and standards overlap only              tion of what spokesperson Jesse Duarte
partly with those of the working class              refers to as ‘newsletters aimed at partic-
and related classes. It is in these areas of        ular communities’, in practice, occasional
divergence (ranging from views on state             publications directed at sympathisers in
involvement in the economy to attitudes             the business community and at racial
towards foreign residents in South                  minority communities – in other words,
Africa – as demonstrated in the Daily               to provide additional media to those
Sun in April 2008) that the complete ab-            communities already saturated by other
sence of diversity of perspective is felt           media.                                  ★
most strongly.
   The solution, if South Africa is to              David Niddrie is a Johannesburg-based
achieve the right of freedom of expres-             media consultant
sion for all sectors of society rather that
just for the owners of the media (free-             Notes
dom, that is, to express their collective           1 Section 16 (1)(a) and Section 16 (1)(b),
interests and perspectives), is to revert           Constitution of the Republic of South
to the RDP objective of diversifying                Africa Act, 2006
ownership and control of the media.                 2 Sunday Independent, 25 January 2009:
   The need for diversification is clear            All the President’s women
and recognised through the near-con-                3 Sunday Independent, 21 December
stant refrain from the ANC communica-               2008: Knives out for Motlanthe
tion’s department that the print media              4 Mail and Guardian, 27 February 2009:
is hostile to the organisation. This recog-         ANC’s dirty war on Cope
nition is backed by resolutions from the            5 News24.com, 24 February 2009: Joost
most recent national congresses of all              in seks-video
three partners in the Alliance for the es-          6 Fukuyama F, The end of history, 1989,
tablishment of popular newspapers.                  The National Interest. The title is a play
Which makes it all the more surprising              on Marx’s references to ‘the end of pre-
that 18 months after the ANC’s 52nd na-             history’ and to ‘all previously recorded
tional conference at Polokwane and                  history (being) the history of class strug-
nearly three years after Cosatu’s                   gle’.
Midrand congress, the ANC manifesto is              7 Audit Bureau of Circulation, Naspers
entirely silent on the question of diver-           Annual report 2007, South African Info
                                               80
                       AFRICAN COMMUNIST | April 2009

8 The Media Development and Diversity           munity media – effectively media
Agency (MDDA), established under the            through which communities speak to
MDDA Act in 2002 exists to assist ‘his-         themselves – and does not have the re-
torically disadvantaged communities             sources to contribute to national media,
and persons not adequately served by            much less to facilitate diversification of
the media’ to gain access to the media.         what is currently a closed shop of bour-
In practice is focuses primarily on com-        geois media.




                                           81
                          AFRICAN COMMUNIST | April 2009

COPE

The unusual life of
Mr Terror Lekota
Dan Sechaba Montsitsi tracks support for Cope
to shallow roots in the Congress Movement




T
            hrough our participation in              the 70s. He was a member of the South
            political structures for the lib-        African Students organisation (Saso),
            eration of our country, or cur-          which organised at tertiary institutions.
            rently for the transformation            It was formed in 1968. The leadership of
            of our country towards a non-            Saso constituted important intellectuals
racial, non-sexist, united and democratic            who preached the philosophy of Black
South Africa, we inevitably and uncon-               Consciousness. At the time, we were the
sciously write a political history of our            young student activists of the South
lives. The history that we carve through             African Student Movement (Sasm), or-
our actions has the tendency of follow-              ganising in high schools. Sasm was
ing us.                                              formed around 1970. The National Youth
   Unfortunately for some leaders, their             Organisation (Nayo) and Transvaal
history comes back to haunt them.                    Youth Organisation (Tryo) catered for
There are certainly aspects of Mr Mo-                youth who were not in school. Many
siuoa Terror Lekota’s history he would               community organisations, trade unions
not wish to recall. In the process of our            and other organisations, operated under
political development, we commit er-                 the umbrella of the Black Consciousness
rors, most of which would be pardon-                 Movement (BCM ).
able given our lack of experience. Have
some of us – including Mr Lekota –                   Missed opportunity with
reached the level of maturity where we               the ANC underground
are capable of pinpointing some of our               The aftermath of the Sharpeville mas-
errors and begin to have a hearty laugh              sacre saw both the ANC and PAC
about them. Cde Nelson Mandela re-                   banned. The National Party regime was
called how he had challenged and mo-                 convinced that it had cut off the head of
bilised against a correct view held by               the snake and destroyed the ANC. It fol-
former ANC NEC member Cde ZK                         lowed up its offensive strategy by up-
Matthews. Cde Mandela’s view, incor-                 rooting residents of townships like
rect as it was, won the day. On reflec-              Alexander, Sophiatown, Sharpeville and
tion, he jokes and laughs about this and             others, to crushing any attempt to re-
other matters when he recalls these and              group and reorganise.
other stories.                                         Months after the bannings the ANC
   Let us begin with Mr Lekota as part of            leadership convened its underground
the Black Consciousness Movement in                  conference at the Orlando Community
                                                82
                        AFRICAN COMMUNIST | April 2009

Hall in Orlando East. Shortly thereafter,          They seized every opportunity they
another meeting took place in Pieter-            could to learn about the history of strug-
maritzburg. Both meetings were                   gle, receive and distribute political ma-
charged with the responsibility to con-          terial and carry out certain assignments
sult broadly with members of the ANC             on behalf of the structures. It was com-
and communities about the road ahead             mon knowledge then that within the
given the banning orders. The question           womb of the BCM, the heart-beat of
on the agenda was to surrender or sol-           both the ANC and the PAC could be
dier on. Comrade President Oliver                heard. It is therefore not an understate-
Tambo delivered his opening address to           ment to assert that some debates about
the first ANC Conference since the un-           the definition of Black Consciousness as
banning in Durban on 1 July 1991 and             a philosophy were in essence debates of
elaborated on the challenge that faced           the battles of ideas between proponents
the ANC then and said;                           of the Freedom Charter and those of the
   “It must be remembered that the fun-          Pan-Africanists.
damental question that we then had to
resolve was how to transform our move-           Mr Lekota and others form BPC
ment to meet the new situation in South          The BCM had come of age. It had be-
Africa. The choice confronting us by the         come a formidable force in the tertiary
vicious and violent regime was, ‘to sub-         institutions across the country; the
mit or fight’. Rather than surrender we          break away from Nusas by black stu-
chose the path of armed struggle. Our            dents ensured a focused approach to
role outside was to prepare conditions           problems confronting them and their
for the politico-military training of            community in general; the philosophy
Umkhonto we Sizwe. Here at home the              united all sectors involved in the strug-
leadership was recruiting cadres to go           gle for liberation. The workers’ strike in
for military training as well as building        1973, the formation of the Omanyano
the underground.”                                Woman’s organisation, the activities of
   Both these duties were accomplished           Sasm and youth organisations Nayo and
with distinction not withstanding the            Tryo – all these activities provided an
challenges encountered and the prob-             overt political platform for organisations
lems which were overcome. We have be-            to flourish and express themselves. In
come wiser and more informed about               the period 1972-1978, the BCM had
these events. Few can now dispute that           reached its peak. Morale was high, mass
the ANC underground structures were              political activity was the order of the
alive and kicking during the period 1966-        day; fear of the security police and ar-
1976 and later. The early and mid 60s            rests had dissipated.
were obviously most challenging as the             It was this electrifying environment
ANC begun the process of acquainting             that prompted the BCM leadership to
itself with new forms of struggle, estab-        call for the formation of a political party,
lishing itself underground. During this          namely BPC, the Black People’s Conven-
period of reorganisation and realign-            tion. When Mr Lekota and others vigor-
ment of structures, some leaders of the          ously pushed for the forming of an inde-
BCM organisations, in particular the             pendent and unique political party, it
youth, became aware of this initiative.          was we, the youth, who remonstrated.
                                            83
                         AFRICAN COMMUNIST | April 2009

They had to justify their ascension to            the ANC. Some of those then involved in
power. They argued that the people in             BC were clear that this was a trend that
the country were ready to be led by an-           was not shared by the general member-
other political force; that an alternative        ship.”
political voice, to replace the banned po-           It was fortunate that the ANC was still
litical organisations, was imminent; that         respected, loved and recognised by other
a legitimate people’s organisation to             leaders of the BPC, despite its right wing
champion their cause as reflected in the          off-shoot of Mr Lekota and others. The
events of the 70s was overdue. They               scepticism which concerned the ANC
challenged us to point out mass activi-           was dealt with by Ray Alexander in
ties which had been organised by the              Vivien Taylor’s book, Social Mobilisation:
ANC and the PAC since their banning in            “The BCM, Saso, BPC and other organi-
1961. We were all impatient with the              sations must be regarded as important
slow pace of struggle, and wanted the             tributaries to the great river of the Lib-
ANC to speed up its activities. But none          eration Movement headed by the ANC,
of us had ever thought of a new political         tributaries which will tap new resources
party. The idea then was to us very               and add new strength to the main-
weird and difficult to comprehend.                stream, help to swell it into an irre-
   It was clear to us that Mr Lekota and          sistible force capable of overthrowing
his colleagues were bent on pulling the           the white racist regime and winning the
carpet from under the feet of what we             National Democratic Revolution which
perceived as the legitimate, tried and            will bring freedom and democracy to the
tested political organisations of our peo-        people of South Africa.” It is obvious
ple. We demanded to know if the ANC               that the ANC was at this stage confident
and PAC were suddenly wished away as              of its underground potential to keep
though they did not exist. They replied           checks on this new structure.
they “cannot speak on behalf of the                  BPC could not constitute that political
ANC and PAC”. We charged that the                 force and vehicle that could have em-
BCM was a caretaker formation to keep             braced the campaign to call for the re-
the home fires burning. They detested             lease of Nelson Mandela and other po-
this analogy, and we used it to provoke           litical prisoners; it would not also call for
them. They retorted “not anymore”. In             the un-banning of all banned political
their quest to replace the ANC and PAC,           organisations. It was therefore the task
they had hoped that these two organi-             of the youth formations of the BCM
sations would soon fade away in the               (who kept in contact with the banned
minds of our people. History proved               underground operatives and veterans of
how wrong they were…                              the ANC) who led the June 16, 1976 un-
   In his new book, The ANC Under-                rest; and who championed the cam-
ground in South Africa, Professor Ray-            paign for the release of Nelson Mandela
mond Suttner alluded to some of these             and other political prisoners. It was not
arguments: “Some BC leaders dismissed             surprising therefore that when this crop
the ANC and the PAC and regarded                  of youth leaders was detained, we faced
themselves as the vanguard of the strug-          security police interrogation centred
gle or were ignorant of the history of            around our association with the ANC,
struggle or the continued existence of            not BPC. When we faced trial in the
                                             84
                         AFRICAN COMMUNIST | April 2009

Kempton Park Supreme Court in 1978,               other ANC leaders were staying in B
the state tried to associate us with the          Section. Mr Lekota, who was then stay-
ANC, and as sentenced political prison-           ing in A Section, began to have access to
ers we arrived on Robben Island, and re-          wisdom he had never been exposed to
ported to the leadership of the ANC, not          before. He finally stayed permanently in
BPC. Mr Lekota was part of the BPC                B Section, with the assistance of com-
leadership when we arrived on Robben              rade Nelson Mandela, and the years he
Island.                                           spent with the leadership must have
  As the third president of the Soweto            been the most memorable years of his
Student’s      Representative     Council         political life.
(SSRC) in 1976, together with my com-               In the eyes of the leadership, he was
rades, I led the march on the morning of          this bright, young man, daring, fearless,
the 16 June with placards calling for the         eager to learn, and for whom a bright
un-banning of political parties, and the          political future lay ahead. They invested
scrapping of apartheid, Bantu Educa-              their energy their time, their soul to
tion, Afrikaans as medium of instruction          build a political cadre and revolutionary
in schools, and, of course, the release of        in him. The leadership was mindful of
Nelson Mandela. Apart from the fact               the fact that he had very little time left
that we took up the campaign out of               before his release, hence the urgency
conviction, it was also a snub to the             with which they treated his political de-
leadership of the BPC.                            velopment.
  Mr Lekota was one of the accused in               Our Black Consciousness hero came
the Black Consciousness trial that took           out of B Section after spending four
place in 1975. They were sentenced to             years with the ANC leadership a “trans-
Robben Island. Mr Lekota was a staunch            formed cadre and leader of the ANC” to
member of the BCM, not a member of                join other political prisoners in the gen-
the ANC! He has no roots in the ANC.              eral sections of F and G in 1981. Without
He did not grow up in the Congress tra-           any waste of time, he joined the Political
dition and customs. He never interacted           School (Umrabulo) classes, not as a stu-
or learnt from the underground activists          dent, but as a political tutor. Only Mr
of the ANC.                                       Lekota would have the “guts” to teach
                                                  ANC politics to veteran comrades who
Mr Lekota’s political development                 had been in the ANC for the past 30
on the Island                                     years.
Mr Lekota’s six years on Robben Island              Comrade Kgalema Motlanthe, who
helped him to catch up with the politi-           had been an underground operative of
cal training he missed out on. It is amaz-        the ANC and was sentenced to Robben
ing that it took the Robben Island lead-          Island headed ANC leadership struc-
ership of the ANC to convert him into a           tures in the general section with com-
member, while the underground leader-             rade Curnick Ndlovu, Stanley Nkosi,
ship was just under his nose.                     Sibusiso Ndebele, Mjombe and the late
  The gate was later opened between               Mpanza (Gizenga). The two latter com-
the B and A Sections of Robben Island.            rades were veterans of the Umkhonto
Cdes Nelson Mandela, Walter Sisulu,               we Sizwe and trained in the 1960s. Mr
Govan Mbeki, Amhed Kathrada and                   Lekota reckoned he belonged to this
                                             85
                         AFRICAN COMMUNIST | April 2009

layer of leadership and thus worked                cadreship that would continuously
with them.                                         learn, listen, engages politically and
  The leadership in B section agreed that          serve their people until they also
he should be given more political re-              reached the afternoon and sunset of
sponsibility so that he should speak and           their lives.
engage in more ANC structures. They                   It depends on the type of soil a farmer
hoped that this would assist him in ac-            is using to sow his good seeds. If the soil
celerating his understanding of the or-            is not in the first place fertile and well
ganisational culture, customs, traditions          treated, or if the PH count of the soil is
and values of the ANC. It was however              too alkaline or too acidic, the harvest at
too little, too late. The leadership had           the end of the season will definitely be
tried everything in their power to help            poor. Our leadership therefore, cannot
him.                                               be held responsible for any “factory
  The late cde Mpanza, an MK combat-               fault” that may have occurred as a re-
ant of the Wankie operation in 1969, said          sult.
of Mr Lekota when we were still on the
Island in 1982: “Your leader (referring to         Participation in UDF
my association with Lekota in the BCM)             The majority of comrades who were re-
reached the ranks of the ANC leadership            leased from Robben Island were de-
too quickly. This does not usually hap-            ployed by the ANC leadership in various
pen in the movement. He must be very               sectors. So was Mr Lekota. He was de-
careful not to cut corners, otherwise he’ll        ployed to join the internal leadership
blow his fuse very quickly.” Mr Lekota             who had been tasked with the responsi-
was released from Robben Island in                 bility of building the United Democratic
1982.                                              Front (UDF), formed on 20 August 1983
  The Robben Island community was                  in Mitchell’s Plain.
proud of the heritage that resided in B              Mr Lekota was elected its national
section – the best political brains the            publicity secretary, and this saw his
country and the African continent has              stature grow. As soon as campaigns
produced. They were the cream of the               were launched by the UDF, the National
South African leadership in Nelson                 Party government pounced on him
Mandela, Walter Sisulu, Govan Mbeki,               again, and he was detained and charged
Harry Gwala, Ahmed Kathrada, Laloo                 with 22 other political activists in the
Chiba, Andrew Mlangeni and others.                 now-famous Delmas Treason Trial
This leadership spent sleepless nights to          which begun in November 1985 and
ensure the transfer of political knowl-            ended in November 1988. The state tar-
edge took place; that ordinary political           geted four political prisoners and sen-
activists were transformed into political          tenced them to Robben Island: Popo
catalysts for change. Their investment in          Molefe, Thomas Manthata, Moss
cadres like the current President of the           Chikane and Mosiuoa Lekota. They
country, cde Motlanthe, and other polit-           were all released in 1989 after serving
ical prisoners, down to the former young           only one year, through a successful ap-
generation of stone-throwers in 1976, be-          peal process.
came a true, living testimony and em-                At that stage, the UDF had survived
bodiment of ANC cadreship. It was                  four states of emergencies imposed by
                                              86
                         AFRICAN COMMUNIST | April 2009

the state.                                          The agenda of the meeting of the NEC
  Among the campaigns waged by the                of the UDF on 29 April 1990 indicates
UDF were rent boycotts, stay-aways, the           that no strategy was being put into place
million signature campaign, “Black                to assist with plans to establish units of
Christmas” against the detentions and             the ANC on the ground. The responsi-
banning of activists, boycott of white            bility of establishing ANC structures
shops and the campaign to popularise              rested squarely on the shoulders of the
the Freedom Charter. During much of               ANC. But it was the internal leadership
this period Mr Lekota was in prison.              of the Mass Democratic Movement who
  With the release of leaders like cde            understood the terrain and were best
Govan Mbeki, and later Walter Sisulu,             placed to make proposals.
Elias Motsoaledi, Andrew Mlangeni,                  A UDF General Council Report of 22
Amhed Kathrada and others, the UDF                April 1990 reports as follows on the
structures formed Local Reception Com-            phasing out of the National Reception
mittees to receive and integrate the              Committee: “The decision to phase out
leaders into communities.                         the National Reception Committee does
                                                  not affect local reception committees. It
UDF to continue as political party?               was communicated to Cosatu and it has
Mr Lekota was released from prison be-            agreed to this position.” It was easy to
fore cde Mandela. The infrastructure for          dissolve the NRC but not the UDF.
the reception of leaders was established.           During a national workshop on the
The release of the leaders and the un-            Programme of Action on 6-7 April 1990
banning of political organisations took a         in Cape Town, a Satco activist from the
lot of UDF activists by surprise. Sud-            Western Cape asked when the UDF was
denly there were leaders of the ANC               going to disband. Mr Lekota responded,
from exile and prison, and leaders of the         “Disband the UDF? What do you mean
Mass Democratic Movement in the                   just disband the UDF? This thing is
country. To ordinary members this was             huge, and it can stand on its own. It does
not an issue. To ordinary South Africans,         not need to lean on anything or any-
the atmosphere was electrifying. South            body. You are too fast comrade, we are
Africans citizens walked kilometres to            not discussing that issue here….” It is
see cde Nelson Mandela when he spoke              these views of the UDF standing alone
across the country. A festive and jubilant        (against what? Or in opposition to
mood filled the air.                              what?) that prompted mostly comrades
   As the country experienced holiday             from the youth movement to develop a
fever with the release of former Presi-           negative attitude to the leadership of the
dent Mandela, a few leaders worried               UDF, particularly, Mr Lekota.
silently and spoke in murmurs. We were              A month before the National General
about to experience the recurrence of             Conference of March 1991, in his secre-
what transpired in 1975 with the forma-           tarial report, Mr Lekota did not pull
tion of BPC. Mr Lekota reckoned with a            punches. He quoted from an earlier con-
few leaders that it was not yet oppor-            ference report: “Since the National Con-
tune for the UDF to dissolve and give             ference debates are taking place in the
way to the ANC structures to be estab-            UDF regarding its future and role. Some
lished.                                           thoughts are beginning to crystallise ...
                                             87
                         AFRICAN COMMUNIST | April 2009

yet there are also strong views that the          their problems. In the process of doing
UDF should dissolve completely.”                  our political work in the various
  There was impatience amongst youth              provinces we see there are comrades
activists, like in the 1970s when Mr              who are walking back into the ANC af-
Lekota and others decided to form BPC.            ter a spell of confusion, a promise of lu-
The youth in the 1990s were not im-               crative positions and the incentive of a
pressed by his statements. He neverthe-           good bank balance. Genuinely confused
less continued: “The perception is crucial        members would always come back to
in our discussion of the future of the            their movement, and the door will re-
UDF and the National Civic Organisa-              main open, especially for those com-
tion. We need to assess whether it was            rades who might have been wronged in
strategically correct to have adopted the         one way or another. The challenge is
Freedom Charter. To what extent have              those who are lying low in our organisa-
we made any strategic advances by                 tion with the intension of jumping ship
adopting the Charter?”                            later. The ANC will continue to urge
  The ANC was unbanned. He was still              them to leave without any waste of
worried about the UDF and the affili-             time. They constitute an unprincipled,
ates! When the Freedom Charter was                uncommitted, opportunistic and unreli-
adopted during the 30th anniversary               able membership, the kind that would
campaign in 1985, he was in prison and            have sold you for a song during the
comrades were not keen to open discus-            heavy repression of the apartheid
sions on the pros and cons of the adop-           regime.
tion of the Freedom Charter by the                  In 1985 Cde Mandela responded to the
UDF. He couldn’t have succeeded in di-            offer of conditional release from prison
verting the UDF and channeling it to              by PW Botha by issuing a statement,
any direction he wished. Most youth               part of which read: “I am a member of
and student organisations were from the           the African National Congress. I have al-
Congress tradition. The ANC and its               ways been a member of the African Na-
leaders were extremely popular. Nobody            tional Congress and I will remain a
or anything could have swayed South               member of the African National Con-
Africans away from the ANC during that            gress until the day I die.” It is by this
period.                                           yardstick that we will always judge a
                                                  true cadre of the movement and distin-
Mr Lekota today                                   guish the cadre from the one who only
It is unfortunate that Mr Lekota has              seeks glory and opportunities in the
now decided to abandon the organisa-              struggle and only favours from the ANC.
tion to which he belonged and con-                  Having lost elections in Polokwane
tributed so much. The ANC cherishes all           cannot thus constitute a valid reason for
its members without exception. Losing             Mr Lekota and others leaving the ANC
one member is something not taken                 and mobilising against the liberation
lightly within the ranks of the move-             movement that built and groomed him
ment, in particular during the period of          into a leader. It is a snub for the loyalty
struggle. Mr Lekota and other members             and benevolence with which the leader-
who left the organisation should have             ship treated him. To some, it is in keep-
used all available avenues to address             ing with his tradition of founding new
                                             88
                          AFRICAN COMMUNIST | April 2009

political parties to rival the ANC when             class of the 70s of Soweto
it suits him. This is old habits rearing its          We are coming of age, and can pro-
head or rather refusing to die!                     nounce as Madiba did: “We are mem-
   The youth of 16 June, 1976, would for-           bers of the African National Congress.
ever be grateful to the stalwarts of the            We have always been members of the
ANC underground structures - including              African National Congress and will re-
Albertina Sisulu, Nthato Motlana, Joe               main members of the African National
Qwabi, Winnie Mandela, Mthenjane,                   Congress until we die.”             ★
Spider, Beyers Naude, Cedric Mayson,
Thenjiwe Mthintso, Paul Langa and                   Cde Montsitsi is a former president of the
many others who politically guided us               Soweto Student’s Representative Council,
and continuously cared for the emo-                 MK Regional Commander, Robben Is-
tional and political development of the             lander and SACP activist




                                               89
         WHERE TO CONTACT THE SACP
Head Office                             Mpumalanga Province
3rd Floor Cosatu House,                 NUM Offices, Smart Park Building,
1 Leyds Street,Cnr Biccard,             Eddie Street, Nelspruit
Braamfontein, Johannesburg 2000           Tel: (013) 656 – 2045
    Tel: (011) 339-3621/2                 Fax: (013) 690 1286/656 0291
    Website: www.sacp.org.za              email: mpumalanga@sacp.org.za
                                          Secretary: Bonakele Majuba
Eastern Cape Province                     082 885 5940
178 Buffalo Road,
King William’s Town 5601                Northern Cape Province
Tel/Fax: (040) 635-0463                 Sanlam Building, 1st Floor,
   email: ecape@sacp.org.za             Johnes Street, Kimberley 8300
   Secretary: Mandla 082 419 3336          Secretary: Norman Shushu
                                           082 376 8311
Free State Province                        Organiser: Tsepho 073 094 6027
1st Floor Moses Kotane Bldg,               Tel: (053) 831 2512
44 Fichardt Str, Bloemfontein 9300         Fax: (053) 832 9464/5855
    Fax: (051) 448 5584
    email: freestate@sacporg,za         Limpopo Province
    Secretary: Phel 082 576 6331        1st Floor Mimosa Bldg, Room 22,
    Admin: Dorothy 084 693 9822         58 Market Str, Polokwane
                                            Tel: (015) 291 3672
Gauteng Province                            Fax: (015) 295 7773/ 291 3232
7th Floor North State Bldg,                 email: limpopo@sacp.org.za
Cnr Kruis & Market Str,
Johannesburg 2000                       North West Province
   Tel: (011) 333 9177                  2nd Floor Jacob Bldg,
   Fax: (011) 333 6394                  Cnr Kerk & Boom Str, Klerksdorp 2570
   email: gauteng@sacp.org.za              Tel: (018) 462 5675
   Secretary: Zico Tamela 083437 8654      Fax: (018) 462 4322
   Chair: NKolisile 082 939 4035           email: northwest@sacp.org.za
   Admin: Phindi 083 345 7198              Secretary: M Sambatha 072 360
                                           6861
Kwazulu Natal Province                     Chair: W Sebolai 083 613 1904
Room 602 General Bldg,                     Admin: Kelebogile 073 253 4452
47 Field Str Durban 4000
   Tel: (031) 301 3806/304 1169         Western Cape Province
   Fax: (031) 304 1169                  No1 Church Str, Dumbarton House,
   email: kzn@sacp.org.za               Cape Town 8001
   Secretary: Themba 083 303 6988         Tel: (021) 425 1950
   Admin: Nokulunga 072 010 2602          Fax: (021) 425 1956/424 4667
                                          email: wcape@sacp.org.za
                                          Secretary: Khaya Magaxa - 083 274
                                          3941
                                          Org: X Ndongeni 072 290 2153

				
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