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Umsebenzi Online

Volume 3, No. 15, 4 August 2004

In this Issue:


Red Alert

The essence of BEE should be about the workers and the poor

By Blade Nzimande, SACP General Secretary

The renewed public discussion on the nature of black economic empowerment requires strategic input from the perspective of poor and working people. In our last edition of Umsebenzi Online we highlighted a few of the more recent BEE developments, typifying the deepening class contestation of South Africa’s democracy. But what has been happening more generally over the last ten years in terms of BEE?

What has passed for “black economic empowerment” over the last decade has been essentially the accommodation of an elite. There has been nothing broad-based about it. And there has been little that is transformational about it. It has been about changing some of the leading agents of the existing system, leaving intact the entire system itself, a system that generates and reproduces inequality in our country. Racialised capitalism persists.

It is important, however, that the assessment of BEE and of those behind it, and of those benefiting from it, is not confined to moral outrage. The SACP is, of course, fundamentally opposed to capitalism, it is an inherently exploitative system. But we are not utopian dreamers, we recognize that we have to advance, deepen and defend our democracy in conditions not of our own choosing. What is more, Marxism has, from the outset, always recognized that capitalism has a positive, revolutionising side. Despite itself, in the midst of pursuing profits, historically, and even in the present, capitalism sometimes revolutionizes the forces of production – expanding science, technology, the skills of the working class. Of course, profits always rule supreme under capitalism, capitalist corporations will suppress technologies, shut down perfectly workable factories, and retrench highly skilled workers when these things are “necessary” from the perspective of the oligarchs.

The SACP is not remotely convinced that the huge challenges of our society (and our world) can be effectively addressed within the closed parameters of capitalism. But even within capitalism a lot can be done. Take the challenges of our own economy. The current accumulation path is continuing to reproduce, even exacerbate racialised poverty and inequality. Our economy is excessively export-oriented and import-dependent; it is capital-intensive and growth tends to be job-shedding; the national market remains narrow; there is very little robust entrepreneurship; there are high levels of liquidity and a serious lack of fixed capital investment; while some progress is being made, the skilling of workers lags; and the role of our corporations in our region and continent is mostly predatory rather than developmental.

Even within the confines of capitalism, and even from positions of privilege within the corporate board-rooms something can begin to be done about the skewed character of our economy which threatens the medium-term sustainability of our democracy (capitalist or otherwise).

The question is: Have ten years of increasingly frenetic, head-line hitting BEE deals remotely contributed to addressing any of these systemic challenges? With some few arguable exceptions, we believe that most of the celebrated BEE deals have had a neutral, and probably a negative impact on addressing the real transformational challenges of our economy.

The dominant approach is to implement a narrow BEE, focusing on the advancement of a black minority through equity acquisitions and individual promotion into the senior management ranks. Apart from the narrowness of this approach, the equity acquisitions and similar financing arrangements in most of these deals amount, in practice, to diverting surplus into debt, instead of investing it productively, let alone developmentally. Our white captains of industry and finance much prefer the short-termism of lending an aspirant upwardly mobile elite the membership fees to the country club and the keys to the Porsche, than taking on the more challenging tasks of labour-intensive investment, or skills development, or ensuring that poor communities enjoy banking facilities. In this way they hope to advertise their rainbow credentials and keep in with the dominant political party, and maybe, who knows, pick the next president.

The arguments for and against narrow BEE have tended to be moralizing and individualistic. Arguing for it have been the upwardly mobile aspirants, and the arguments have been about getting their “fair share”, with “equity” in the broad sense quickly becoming “equity” in the narrow JSE sense. Empowerment starts to be reduced to quotas.

However, the arguments against narrow BEE have also sometimes simply focused on the country club, the Porsche, and all the other perks. The test of BEE, narrow and broad, must be about development and transformation. It is only by doing this that narrow BEE can be assessed for whether it is contributing to broader empowerment or not.

It is possible, but not given, that black board-members or senior managers will be more sensitive to the developmental challenges of the great majority of workers and the poor in our country. It is possible, but not given, that new mining magnates operating the marginal mines (that the established corporations were happy to let go) may save jobs and even create more.

The SACP believes that the kind of elite BEE we have seen over the last years can be considered if (and only if) it can really be shown to contribute to the development of the forces of production, and to transformation that benefits the great majority. The case cannot for it cannot be made abstractly, arithmetically, or on the simple basis of quotas.

BEE must principally be about addressing the needs of the overwhelming majority of our people, black workers and the poor – i.e. the basic economic empowerment to millions of our people through access to jobs and through the provision of affordable and reliable electricity, housing, transport, telecommunications and so on. It should also be about transforming the current accumulation path in our country. The question of transaction shareholding should be subjected to these objectives, rather than what is happening now – big transaction deals for a few completely disconnected from, and sometimes directly undermining, these objectives. Approached in this way, then BEE becomes what it should be – broad-based.

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