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Umsebenzi Online

Volume 2, No. 15, 30 July 2003

In this Issue:

 

Red Alert

Is the bourgeoisie capable of leading Africa’s revival?

By Blade Nzimande, SACP General Secretary

On July 30, 1921 our Party was launched, the first Communist Party on African soil. This week marks our 82nd anniversary. In our founding Manifesto, the Party vowed to “proceed neither timorously nor tactlessly” in the struggle to put working class politics at the centre of the national agenda.

Given that over the last few weeks a number of significant, often troubling events and issues have caught the head-lines, that commitment, it seems to us, is more relevant than ever before. How should our new democratic state relate to capital and to capitalists? Are there any strategic lessons to be learnt from recent experiences?

Global challenge

At the Progressive Governance Conference in London in mid-July, President Mbeki joined a number of other leading international political figures – including Tony Blair, Bill Clinton, Gerhard Schroder, Goran Persson, Jean Chretien, and Javier Solana, names often associated with the re-invention of social democracy, the so-called “Third Way”.

Comrade Mbeki used the occasion to launch a blistering attack on neo-liberalism, and on the assumptions of “free market” fundamentalism. He identified global poverty as “the most challenging structural fault in the contemporary world economy and global human society.”

“It is impossible”, he said, “to solve the problem of global poverty solely through reliance on ‘the market’. Billions across the world, including Africa, are too poor and underdeveloped to achieve full and beneficial integration into the global market, even if they succeed in creating the macro-conditions supposedly attractive to capital.”

What is to be done?

In his speech, cde Mbeki poses a dilemma. The crisis of global poverty requires growth and development, but:

“In contemporary society, the capital needed for this growth and development is privately owned, and the publicly owned fraction of capital is but a tiny proportion of the stupendous volumes of capital in the global economy.”

Cde Mbeki draws the conclusion that, therefore, the fight against global poverty must, fundamentally, involve a partnership with privately-owned capital. However, the dilemma is even more complicated:

“in its functioning and reproduction, capital, as distinct from capitalists, is not informed by any sense of social responsibility. It has no soul. Money and its multiplication constitute its motive power. No thinking person would therefore contest the view that profit maximisation is a necessary condition for the existence of capital. Without this, capital dies and humanity perishes.”

In other words, the dilemma appears to be this: the soulless capitalist accumulation process is sinking billions of people across the globe into grinding poverty and early deaths as it pursues profit maximisation. Yet this is the only way capital can exist, and without capital, “humanity perishes”.

What is the way out of this dilemma? Cde Mbeki seems to offer an exit-point in the fleeting, almost unnoticed distinction he makes between “capital” and “capitalists” “capital, as distinct from capitalists, is not informed by any sense of social responsibility. It has no soul.”

Could it be that capitalists have a sense of social responsibility, a soul? Obviously, some do, even if it is only on Sunday morning in church, or when there is a photo opportunity with ex-President Mandela. Can we build a progressive national, or even global, politics on the basis of capitalists’ “sense of social responsibility”? And if so, how?

Speaking truth to capitalist power

It is here, in cde Mbeki’s argument, that “the school of progressive politics” must step in.

“Only, and only, a vigorous, sustained and successful intervention by the school of progressive politics will save humanity from the impending catastrophe.”

But what does this vigorous intervention consist in? It seems, essentially, that it is about persuading capitalists, appealing to their sense of rationality and social responsibility.

“Do the progressive politicians have the necessary courage? They need it because they have to present the reality, boldly and frankly, that it is impossible to solve the problem of global poverty solely through reliance on `the market’.”

Cde Mbeki concludes this powerful and important intervention with the observation that, if the “school of progressive politics” and capitalists do not wake up, others will step into the breach:

“The billions of African and world masses are watching and waiting, hoping and praying that a progressive agenda will emerge as the defining feature of the process of globalisation. Nobody knows how long they will watch and wait.”

Yes, but…

Cadres within the SACP and broader ANC-led movement should read, analyse and debate this important intervention. (An edited version was published in the Mail&Guardian, July18, and the full text is available at www.progressive-governance.net). It should be a matter of national pride to note that, in its relevance and radical analysis, it easily surpasses the interventions of the other global leaders gathered at the London conference.

In the spirit of our Party’s vow 82 years ago “to proceed neither timorously nor tactlessly”, we would like to engage with the President’s London intervention.

In its analysis of the key global challenge (poverty), and in its searing criticism of neo-liberalism, the intervention is absolutely spot-on. It is also, surely, not wrong to appreciate that any progressive politics cannot simply wish away the fact that huge resources (financial, technical, intellectual, managerial) are in private capitalist hands, and that some kind of strategic engagement is, therefore, required. But how do we empower such an engagement?

There are two interrelated areas in which progressive power needs to be consolidated in South Africa – in the state, and in mobilised popular power.

Consolidating the developmental state

Whatever the debates and strains in our alliance, the SACP is unshakeably committed to ensuring a continued and massive ANC electoral majority. Publicly-owned capital might be, as cde Mbeki puts it, “but a tiny proportion of the stupendous volumes of capital in the global economy.” But a two-thirds electoral majority at least gives progressive politics in South Africa a leg to stand on in a tough global and national reality.

What is more, state power and parastatal resources, however “tiny”, do provide financial, technical, intellectual and managerial leverage, with which to drive a developmental agenda – even if public resources cannot do this alone. Individual capitalists may, or may not, have “a sense of social responsibility”. The public sector, as the ANC Stellenbosch National Conference resolved, must be made to have social responsibility at the core of its mandate.

The danger of under-rating the significance of public and parastatal resources is that we might treat their strategic potential neglectfully, we might run them down, we might approach them as if they were corporations like any other, or even sell them off in order to attract the “real” capital.

Popular power

In his London intervention, cde Mbeki speaks of the African and world masses as “watching and waiting, hoping and praying”. We believe that, if a progressive politics and a democratic state are to have any real transformational impact, then popular forces will have to be much more organised, mobilised and active than this.

There are at least two key sites within our country in which a progressive politics needs to consolidate popular mass power – at the point of production, and in the zones of social and economic reproduction.

Cde Mbeki is quite right that the market cannot be left to itself. But the market cannot be left to progressive politicians working on the “social consciences” of capitalists either. As this past week’s massive mineworker mobilisation has shown, trade union power at the point of production is a critical factor in inducing the inklings of a “social conscience” in the “soul” of the Chamber of Mines.

Tony Blair and Bill Clinton might regard trade unions as “old politics”, not part of a “third way” fad. A genuinely progressive politics, however, as the ANC has repeatedly underlined, must foster, encourage and help to build a powerful, strategically effective trade union movement.

Sustainable communities, sustainable households

But it is not just at the point of production that we must build popular power. The sites of mass social and economic re-production are also absolutely critical. In our society these are, in particular, the townships, sprawling zones of under-development, of semi-marginalisation. In our struggle against apartheid the township was absolutely decisive. It was here that we built semi-liberated zones. It was here that we built people’s power. It was here, organising along the fault-lines of (racial) exclusion and (labour and consumer) inclusion, that we delivered blows to the apartheid economy, through temporary, mass self-exclusion from the points of inferior inclusion – through boycotts and stay-aways.

It is in our townships (urban, peri-urban and rural) that the global crisis of poverty, that cde Mbeki evokes so vividly, is most brutally experienced within our country. The townships, despite many important advances since 1994, are the epicentres of unemployment, poverty, and the HIV/AIDS epidemic.

The townships are dependent on the capitalist market in a thousand ways, they are the dormitory zones of workers and consumers and of those who sustain them. But the townships are also neglected by the capitalist market – unbanked, under-invested, red-lined, black-listed, dumping grounds for the sick, the unemployed, the unemployable. This neglect is both a problem and a significant opportunity.

We cannot, in any foreseeable future, simply boycott capitalism, or stay-away from globalisation. But nor, as cde Mbeki so eloquently explains, can we simply comply with the rules of the “free-market” game. Those rules are based on soulless profit maximisation:

“No thinking person would…contest the view that profit maximisation is a necessary condition for the existence of capital. Without this, capital dies and…”

(and then cde Mbeki appends a puzzling addition)

“…and then humanity perishes.”

It is a puzzling addition because humanity existed long before the profit maximisation accumulation path of capitalism, and humanity will surely survive long after the abolition of capitalism. (Indeed, unless we are able to halt and transform the current ecologically unsustainable, profit maximisation path of capital, humanity WILL perish.)

Throughout the apartheid years, and still today, the townships survive, at least partially, beyond (or perhaps below) the profit maximisation circuits of capital. Through burial societies and stokvels, through church groups and sports clubs, through household and intra-household networks of sharing and redistribution, and, in more recent times, through street committees, neighbourhood watches, voluntary care-givers, and a thousand others forms of household and community co-operation and solidarity. These were the networks of popular self-empowerment that were the bed-rock of the resistance struggle.

Since 1994 we have sometimes inadvertently weakened this popular power base. We have sometimes advised stokvels and burial societies, cooperatives of ancient origin, to once more re-fashion themselves, this time as “micro” businesses, whose road to sustainability lies in becoming “medium-sized” businesses (exploiters of the labour of others) in the “formal” economy (operating according to the laws of profit maximisation).

But, in many other ways, we have strengthened the independent viability of poor house-holds and communities. We have begun to de-commodify basic levels of water and electricity provision. We have sought to partially insulate health-care, housing provision, and education from the iron laws of the market. We have introduced the small beginnings of a comprehensive social security system, conceived not as a dependency-building dole, but as a catalyst for household and community self-development. We have legislated for local-level, integrated development plans that should be discussed and approved by communities themselves. We have developed community policing forums and school governing bodies. We have nurtured, unevenly, a burgeoning co-operative movement, de-linking entrepreneurship from exploitation and profit maximisation.

We need to appreciate more clearly the strategic significance of all that we are doing. This is not charitable work, it is not about winning elections. It is, above all, about building power, popular power, relatively insulated from the empire and depredations of capital. Unless we do this, unless we create the conditions for communities and households to build their own capacity, our shared progressive political agenda will not succeed.

But what about the capitalists?

Co-incidentally, in the week that the Chamber of Mines backed down in the face of National Union of Mineworkers mobilisation, in the week of the SACP’s 82nd anniversary, Mashudu Ramano, chairperson of African Legend and Johncom, has written for the Opinion & Analysis section of the Business Day (July 28). The editor so much appreciates Ramano’s line of argument, that it is also generously summarised in three paragraphs on the front page.

Ramano complains that:

“every time a black person has to do business in SA, he or she must show that the company has a broad shareholder base.”

Of course, Ramano’s conscience concedes that

“there is a dire need to address the disparities of income and wealth in SA…”

But his conscience is over-ridden by another voice, the voice of the market that tells him that

“Many listed companies with a large number of shareholders holding a small number of shares have to contend with the huge administration costs associated with this situation. In the end it does not make commercial sense…”

Why should black capitalists be saddled with non-profit maximisation expectations, Ramano is asking, when their competitors can simply behave like any other capitalist?

He concludes his argument:

“The philosophy of ‘from each according to his ability, to each according to his need’ has not worked…It is time that we balance this with the approach of ‘from each according to his ability, to each according to his ability’…”

And so we end up with individualistic liberalism! And so we go around in a neat circle, from arguments about “solidarity” from those once aspiring to capitalist empowerment, to arguments against the commercial non-viability of solidarity from the now newly empowered. How quickly the ladder is tossed away.

Perhaps there is a difference between “capital” and “capitalists”. Perhaps capitalists have a “conscience” and a “soul”. Perhaps by promoting a new cadre of black capitalists we can have more “conscience” and more “soul” in the board-rooms.

But perhaps, conversely, it is the board-room that will change the newly empowered. And perhaps, of even more concern, the newly empowered will impact upon the strategic direction and the morality of our liberation movement. Mashudu Ramano and Tony Blair might believe that solidarity is old-fashioned, that is “does not make commercial sense”, but for tens of thousands of NUM members, and for millions of township dwellers, solidarity is the only prospect for survival, and in solidarity lies alternative power.

On this 82nd anniversary of the Communist Party in South Africa, the struggle to place a working class politics and morality of social solidarity at the centre of our agenda is more essential than ever.


The Financial Sector Charter: where is it?  

The long awaited Financial Sector Charter is now in its umpteenth draft, and must be finalised in the near future. The Charter will follow the August 2002 NEDLAC Financial Sector Summit and the June 2003 Growth and Development Summit.

These developments together represent an important shift in the terms of the debate on the financial sector. A few years ago, the debate was dominated by “explanations” and excuses from mainstream formal financial institutions as to why they were progressively withdrawing from the provision of services to low income customers, why bank charges were continually rising, and why they could not become involved in developmental financing. Today we are seeing professions of commitment both by individual financial institutions and the sector as a whole to contributing to rolling out of various services to the poor as well as providing funds for developmental purposes.

The SACP is proud of the fact that the financial sector campaign, which it launched in “Red October” 2000, has contributed to shifting the terms of this debate. The SACP has been involved, both in its own right and through its participation in the Banks Campaign Forum and in the NEDLAC community constituency. The SACP continues to engage both individual institutions and the industry as a whole.

Why we launched the campaign to make banks serve the people?

When we launched the financial sector campaign three years ago, we did so in response to a growing ground swell from our constituency – the workers and the poor. There were two main categories of concerns. The first can be described as “consumer issues” and focused on the fact that working people and the poor were being progressively excluded from access to affordable financial services. Banks were closing accounts of lower income customers, and bank charges were rising. “Red-lining” and discrimination were rife. Access to credit for most working people was available only at extremely high cost through micro-lenders, and financial institutions made no contribution to providing “lifeline services” to social security recipients through “smart card” and ATM facilities. Credit Bureaux, operating outside of any effective regulatory framework, had enormous influence not only on decisions about granting or withholding credit, but also over unrelated matters like access to employment.

The second category of concerns was that formal financial institutions were demonstrating considerable resistance to any serious involvement in the provision of finance for developmental purposes – SMME development or infrastructure development in poor areas. All of this was explained to us at the time as the product of inescapable “market forces”. The opening up of the sector to foreign investment and the introduction of “online banking” had created an imperative for banks to privilege merchant banking and the provision of computerised services to corporate and high income clients and to remove “cross subsidization” of services to lower income clients. If they did not follow this path, the inescapable logic of capital accumulation would simply wipe them out.

From this the SACP concluded that there was a need for state intervention. Our 2000 “Red October” campaign called for NEDLAC to convene a Financial Sector Summit to discuss all the above issues, and to support for the development of cooperative financial institutions. Despite initial resistance, the NEDLAC summit took place in August 2002 sealing important agreements on all major issues raised in the SACP’s campaign.

NEDLAC Agreement

It is important to see the NEDLAC agreement and subsequent processes as the product of public pressure and popular mobilisation and not fundamentally of subjective change on the part of managements in the sector. Prior to the campaign, public pressure was relatively weak and unable to compete for influence in decisions with the “hard imperatives” of profit maximisation and delivering “shareholder value”. Now banks and financial institutions feel obliged to demonstrate some community and developmental involvement. While this is an important step forward, we need to be aware that without continued popular mobilization and vigilance these gains could easily become eroded.

Engaging the Charter

The SACP sees the Financial Sector Charter as a potentially important contribution. The Sector Charter process is, of course, also influenced by the government’s Strategy Document on Broad-Based Black Economic Empowerment. The SACP made a submission to the public hearings on the BEE strategy, in which we stressed our support for an approach which privileged BEE initiatives which empowered large numbers of poorer people over those which empowered smaller numbers – sometimes at the expense of workers and the poor.

While the Financial Sector Charter will quite correctly have to deal with issues of BEE within the sector, it is our view that the broader role of the sector in stimulating economic growth and development must not be lost sight of - and in many respects must be seen as more fundamental. The kinds of transformations called for by the NEDLAC agreement must therefore be reinforced by the Financial Sector Charter. Moreover, the involvement of the sector in financing BEE outside of the sector itself must aim at broad based initiatives – including finance for developmental activity and supporting cooperative ventures – rather than simply funding large scale corporate deals benefiting only the few.

We look forward to engaging with the Financial Sector Charter when it finally emerges and earnestly hope that it takes forward the broader process identified in the NEDLAC summit. What is clear is that although there have been important developments since our campaign was launched three years ago, the campaign itself is not over. We must maintain our mobilization on these issues, and find new ways to engage to push financial sector restructuring more in favour of the workers and the poor.

 

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