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Umsebenzi Online

Volume 3, No. 14, 21 July 2004

In this Issue:


Red Alert

South Africa’s democracy: Deepening class contradictions

By Blade Nzimande, General Secretary

In the last issue of Umsebenzi Online (7 July 2004) we argued that capitalism has failed our democracy. In the two weeks since there have been some very significant developments underscoring this perspective.

In the first place, the Employment Equity Report, released by the Minister of Labour last week, shows the extent to which private capital is actually resisting transformation of the racial and gender demographics of middle and top management in South Africa’s companies. It shows the inherent and systemic racial character of South African capitalism. Racial and gender exclusion are not just a past legacy, they continue to be reproduced as an ongoing reality under capitalism. It is an illustration that South African capitalism has, for more than a century, relied on white male middle and top management as its most trusted “lieutenants” for its accumulation needs.

South African capitalism is liable to reproduce the relative marginalisation of black and women professionals. But events of the past weeks also illustrate that, left to their own devices, the narrow class and personal aspirations of black (and women) professionals are equally incapable of providing an effective transformational leadership.

The substantially privatised Telkom, for instance, presents itself as a leader in black economic empowerment (BEE), citing the demographic and gender profile of its top management cadre. It has just declared a huge profit of R4,5bn and paid its black CEO an obscene R11,4m in salary and bonuses. In the same week as these figures were released, Telkom announced its intention to retrench thousands more workers over the next three years. This follows the cutting of the number of fixed line employees by 24,453 since 1997. While delivering “share-holder” value, with a spectacular 175% increase in Telkom shares since listing last year, Telkom tariffs have skyrocketed. A local call in 2002 was five times what it was in 1996. Last year local and national call prices increased by a further 12,5%.

Even the much-trumpeted “broad” black economic empowerment component of the share-offering privatisation process of last year has come to very little. The Khulisa shares, offered at a discount to the historically disadvantaged, account for less than 1% of the company’s shareholding.

In short, submitting Telkom increasingly to the profit-maximising laws of the capitalist market, has made a few individuals, including some blacks, very rich, while increasing the cost of “doing business” in South Africa for all, including for capitalists. But it is working people and their families who are most disempowered, depriving thousands of their only means of livelihood. What is happening at Telkom is an elite empowerment where the working class, and particularly black households, are impoverished.

Again, in exactly the same week that Standard Bank announces a huge black economic empowerment deal, the banks were busy evicting black bond-holders in Protea Glen in Soweto. This happens against the backdrop of unrest in Diepsloot, again a symptom of, amongst other things, the dismal failure of capitalist banks to finance low-cost housing. We note that as the capitalist banks do this, it is the state, through the Minister of Housing, cde Lindiwe Sisulu that has had to come to the rescue of some of those being evicted. For the capitalist banks, profits are the bottom line not the social needs of Protea Glen residents.

Nor are some black professionals in the financial sector providing much of an inspiring example. As a direct result of our financial sector campaign, a significant sum has now been earmarked for low-cost housing, for access to banking services for workers and the poor, and for infrastructural development in poor areas. But some of these financial sector black professionals are now advancing the shameless argument that half of this sum should be allocated to them, so that they can buy shares in the financial sector!

Also in the past fortnight, the Food and Allied Workers’ Union has launched the first ever Section 77 notice, with a planned strike against a black economic empowerment deal at KWV. These are the first signs of deepening class contradictions between various classes within the black community as a result of competing models of black economic empowerment. The national contradiction cannot be addressed without simultaneously tackling the class contradiction in South Africa.

An emerging cadre of black professionals and managers in the private and public sectors can, potentially, play a progressive role. In fact, they must be assisted to play such a role. But it is only the hegemony of a consistent working class perspective, organisation and mobilisation that will ensure that they do indeed play such a role. If they are allowed to pursue their own narrow class and strata aspirations, they will simply ensure the continued dominance of a capitalist accumulation path that oppresses the great majority of blacks, women and, of course, workers and the poor.

South Africa is currently faced with a number of labour disputes and possible strikes in major sectors of our economy – the metal and motor industries, the mining industry, the public sector, media and communications, etc. In part, these are the usual, cyclical, two to three-year rounds of wage negotiations, as existing agreements begin to expire. But this year they occur in a particular context. In many sectors, organised workers cannot but help notice that the capitalist accumulation path has brought immense rewards to capitalists, while the earnings of workers (those still in employment) have declined.

This year’s round of wage negotiations will naturally reflect this understanding. The intensity of these disputes will, in part, be about different class interpretations of our decade of democracy, and of the ANC’s 70% electoral mandate. Some in the media and in big business have tried to interpret the ANC’s April election victory, as a mandate to continue with “business as usual” in economic policy. This is certainly not the view of the millions of workers and poor who actually voted for the ANC. Nor are they the views of the ANC leadership, as illustrated by the Letter from the President (“The poor of this world rich in faith”) in last Friday’s ANC Today.

For the SACP, the lessons of the last decade, like the lessons of the past two weeks, are clear: if we are to properly understand the character of our economy and the challenges of its transformation, the only route is a consistent working class analysis and perspective. And it is only from this perspective that progressive forces in general and the working class in particular, will be able to evolve a developmental path to transform our economy to serve the overwhelming majority of our people.

The struggle to overcome the crisis of underdevelopment entails purposeful, strategic anti-systemic measures, measures that counter the profit-maximising anti-social trajectory of capitalism. There is a growing consensus that this requires strong state intervention. It also requires active popular mobilisation, with the working class at the head, to assert worker power at the point of production, and popular consumer power and cooperative activism in our townships and rural areas. These strategic, anti-systemic measures are absolutely essential to counter the continuous reproduction of mass poverty by capitalism in our society. To counter the political economy of capital, we must foster the political economy of workers and the poor. We must build an economy and a society increasingly based on meeting social needs, not private profits. This is precisely what we are referring to in our strategic slogan – “Socialism is the future, Build it now!

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