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Bua Komanisi Volume 4 - Issue 1 - September 2004



A Central Committee Discussion Document

?The history of all hitherto existing society is a history of class struggle?,

Communist Manifesto

This paper is based on a proposal for a research agenda and its point of departure is that there is an urgent need for a rigorous assessment of the present state of the NDR guided by Marxist theory. Its major contention is that this needs to be informed by an analysis of some of the major dynamics of class formation and class struggle in the period since 1994.

In the 1970s an extensive body of literature emerged seeking to analyse apartheid society from a perspective of class and class struggle. Although some of this work can be criticised as ?academic?, disengaged from the critical strategic issues of the struggle at the time and failing to give due recognition to the overarching reality of national oppression, it made a major contribution by generating important insights into the relationship between many of the major measures of racial discrimination and national oppression and the processes of capital accumulation. Far from being dysfunctional to capital accumulation (as writers within the previously dominant liberal paradigm asserted), a convincing case was made that many of the most important measures of racial discrimination and national oppression (including pass laws and racially discriminatory labour legislation) emerged precisely to create and sustain relations of exploitation of the black working class on which accumulation of capital in South Africa depended at particular historical periods. Various contributions also chartered the struggles between particular fractions and strata of the dominant classes and the way in which their evolution impacted on particular aspects of apartheid policies. A critical perspective in many of the more important later contributions was that the state and state policies could not be reduced to instruments of this or that class force, but rather needed to be identified as sites of continuing struggle and contestation.

Although influential for a period in theoretical and academic debates on the analysis of apartheid society, class and class struggle have been virtually non-existent as concepts in most analyses of the dynamics of ?post-apartheid? society. From the standpoint of the SACP this is a major lacuna.

As part of the liberation alliance the SACP has long agreed that the immediate task of the post-liberation period is the advancement of a National Democratic Revolution (NDR) whose main content is the liberation of black people in general, and African people in particular, from the oppression of colonialism, racism and apartheid. This liberation has long been seen by the alliance as a whole as involving more than the attainment of formal political liberation and installation of a political system entrenching formal democratic rights. It has also long been seen as necessarily involving the liberation of the black majority from the socio-economic legacy of poverty, underdevelopment, exploitation and inequality. The programme of the movement further recognised that the ?motive forces? for the attainment of the NDR were a bloc of class forces among the historically oppressed, with the working class playing a leading role. Emphasised more in earlier than in later documents, was a recognition that different class forces within the liberation alliance would have different perspectives and interests in relation to the course and content of the NDR and that the relationship established between these forces among the people, as well as between the alliance of motive forces and the former oppressors, would determine the content and trajectory of the NDR. These perspectives long held both by ourselves and our alliance partners would point to the imperative of assessing the state of the NDR, not simply in terms of programmatic content or particular achievements in this or that policy area, but also in terms of the dynamics of class struggle. This is doubly important for the SACP, which seeks to act as the vanguard of the main ?motive force? of the NDR ? the working class.

Any attempt to examine the dynamics of class in post-1994 South Africa must grapple with two realities. South Africa is a society in which the dominant mode of production remains capitalism. Our country, therefore, remains a society divided into classes with different and contending interests. Simultaneously, South Africa is a society that has experienced an important rupture. The 1994 democratic breakthrough and the transition that has ensued in the decade since have witnessed major changes both in the objective structural determination of important class forces and, perhaps more importantly, in the relations between them. This applies both to classes in the former oppressor bloc and to those among the historically oppressed. South Africa?s domestic transition has, moreover, been widely recognized as coinciding with a major change in the modus operandi of global capitalism. The so-called ?informational revolution? and the related processes of capitalist globalisation have impacted significantly on both the objective determination of (and on positions taken in struggle by) all class forces in South Africa.

What follows will be an attempt at a very sketchy outline of what seem to be some of the main contours of the state of the class struggle at the beginning of the second decade of democratic transition. Two elements will be analysed: First, some of the main changes at the level of class determination ? the objective place occupied in the social division of labour; and second some indication of the class positions taken by key class forces in the concrete class struggles of the first decade of democratic transition.

1. Key Trends in Class Determination

The period since 1994 has seen a number of new developments at the level of structural class determination.

On the side of capital, two processes have been particularly important. The first has been the trans-nationalisation of a significant number of former South African-based conglomerate corporations. Beginning around 1996, an increasing number of hitherto South African based companies large enough to secure a place in the FTSE 100 index (including Anglo American, Old Mutual, South African Breweries, Billiton and Didata) have shifted their primary share listing from Johannesburg to London. Such moves have generally been justified to the South African authorities as a means of raising foreign investment capital more cheaply (without having to pay an ?emerging market? premium) to finance activities in South Africa and the rest of the continent. They were probably equally motivated by ?uncertainty? on the part of the managements of such corporations about their future under a democratic government, and a sense that their position might be more secure relating to the new government as ?foreign investors? with options other than South Africa in investment decisions. Whatever the subjective motivations of the management of these companies, this move was clearly facilitated, in the first instance, by the integration of South African capital markets into the world system after 1994 ? a product both of the overall process of capitalist globalisation and of contested decisions about financial liberalisation taken by the democratic government in the post-1994 period. Secondly, it was facilitated by specific decisions taken by the government in terms of existing financial regulation to allow off-shore listing. Again, whatever the subjective intentions of either the managements or government officials concerned, the effect of this move has been to subject the companies involved to the logic of the operation of global market forces, and more particularly to pressures to perform against the expectations of delivering ?shareholder value? in the market to which they shifted their primary listing. A related process of significance, in some cases, was the ?demutualisation? of large long term insurance companies (Old Mutual and Sanlam). This had the effect of taking large sums of capital out of collective ownership, subjecting it instead to the vagaries of, in the case at least of Old Mutual, off-shore stock exchanges. The combined effect of these processes clearly seem destined to lead to at least some of former South African conglomerates becoming minor trans-national corporations, with the corollary of South Africa becoming only one ? and probably a progressively less significant ? focus of their operations.

The case of South African Breweries (now SAB-Millers) appears to illustrate this trend. Content to focus its operations on the South African market throughout the apartheid period, SAB began its ?off-shore? activity by establishing subsidiaries in neighbouring countries as and when these began to lower barriers to the entry of South African capital. Later, after 1994, SAB began acquiring interests in China and Eastern Europe ? self-consciously seeking to focus on ?emerging markets?. After its listing on the London stock exchange, and after the devaluation of the Rand in late 2001 adversely affected its performance in Pounds despite increased profits in Rands, it decided that it was compelled to boost its ?hard currency? earning capacity. Its response was to acquire Millers Breweries in the US in 2002, and the subsequent re-deployment of senior management to the restructuring of the Millers operation suggests that operations in the ?developed? world will increasingly become a central focus of its attention. A more detailed examination of the case of SAB would highlight some of the implications of this trend ? which would seem to include weakening the ability of the South African state to regulate, let alone exert leadership over, these corporations, and enhancing their leverage in struggles within the state by giving them options other than investing in South Africa.

The second major development at the level of capital has been the rise of a small, but increasingly influential, stratum of black capital. Increasingly inter-related and inter-connected with this stratum is a larger black professional middle class, including significant numbers of senior state officials for whom a career in ?the private sector? is increasingly seen as a logical progression. Although still proportionately small in relation to the capitalist and middle classes as a whole (which remain largely white) and miniscule in relation to the black population as a whole, black capital is clearly an increasingly influential force. Together with the somewhat larger black managerial and professional strata it is an important focus of state policy (black economic empowerment) as well as increasingly influential ideologically. Whilst the emergence of such a stratum was long anticipated and indeed widely seen as a welcome sign that ?job reservation? in the bourgeoisie was being ended, this phenomenon raises a number of fundamental questions for the direction of the NDR. In much of the discourse of liberation movement politics, the terms black bourgeoisie (or more likely black business) and patriotic bourgeoisie are used inter-changeably. Yet in reality the two terms have quite distinct meanings. The term black bourgeoisie refers to a particular component of the bourgeoisie defined in terms of its national character. The term patriotic bourgeoisie, strictly speaking, would refer to the conduct of a section of the bourgeoisie implying that it acted in a qualitatively different way from other sections of the bourgeoisie ? in seeking to promote the development of productive forces in South Africa and in looking to the country as the major focus of its activities in contradistinction to former white conglomerate capital now increasingly looking to trans-nationalise. This raises fundamental questions. How has black capital emerged and conducted itself ? Has the pattern of corporate empowerment deals that occurred in the first ten years of the NDR created conditions conducive to the rise of a capitalist stratum willing or able to act in any way different to that of the rest of the bourgeoisie ? Is there any real evidence of patriotic or developmental conduct? Why has ?black economic empowerment? ? defended programmatically as a broad concept intended to impact on the mass of black people ? had such limited success in promoting small business activity in disadvantaged areas?

All of this has taken place against the background of a remarkable degree of continuity in respect of the overall demographic composition of the remainder of the dominant and ?middle classes?. A feature of the transition to date is that the white minority has continued to occupy a disproportionate position in managerial and professional categories. This is a product, in part, of the negotiated nature of the settlement, which entrenched property rights and allowed redistribution only through ?market friendly? mechanisms. In part, too, it is a product of the impact of trends associated with globalisation. The past 25 years or so have seen a trend towards net job creation only in categories requiring post-secondary qualifications for which national minorities, and particularly the white minority, have been most equipped. Government has responded with policies of affirmative action, employment equity and black economic empowerment. While these have created some space for significant numbers of black graduates and professionals ? more in the state than ?private sectors? ? they have yet to alter the fundamental demographic imbalances created by colonialism and apartheid. Against this, a combination of the ending of South Africa?s international pariah status and the global trend towards liberalisation of cross border movement of highly skilled and professional personnel, has created unprecedented opportunities for ?global mobility? by these strata. Clearly, at this point it has mainly been younger white professionals (influenced also by a sense of Afro-pessimism) that have sought to re-locate abroad, but experience elsewhere suggests that it may not be long before this becomes a more ?non-racial? phenomenon.

On the side of the working class and other popular classes, again two main trends in class determination appear to have been important. First, the period since 1994 has seen a continuation and in some respects an acceleration of a trend evident since the mid-1970s, viz. the expulsion from employment of increasing numbers of less skilled, mainly black, workers. Structural unemployment has been identified as a major factor since the mid-1970s. It was initially associated with restructuring in the gold mining industry. Real wages for African mineworkers, which were lower in 1970 than they had been in 1889, became a particular target of workers? struggles and the union movement which began to be re-built in the mid-1970s. Mining capital responded to these pressures, and also to the opportunities created by the rising gold price in the 1980s, by restructuring and mechanising labour processes in the industry. This began what analysts have identified as a phase of expulsion of labour from the industry ? which was initially concentrated on neighbouring ?supplier states? ( Malawi, Mozambique and Lesotho) but later came to encompass also South African supplier regions. At the same time, the period since the 1960s witnessed a significant centralisation and concentration of capital in agriculture. Associated with this, initially, were apartheid?s notorious ?forced removals? of ?squatter communities? and later an ongoing reduction of unskilled employment in the sector. Processes associated with globalisation have had the effect of extending such trends to other sectors. The ?opening up? of the manufacturing sector, as a result of multi-lateral pressures to lower tariffs and a decision taken by the government after 1994 to use tariff reductions as a way to force local industry to restructure and become more competitive, has compelled local manufacturers to restructure according to global norms. Although this was, perhaps, inevitable, given the global balance of forces, and although the alternative might have been (as government has argued) massive de-industrialisation, its effect has been a restructuring that has seen greater export orientation, more capital intensity, disposal and outsourcing of ?non-core? functions, adoption of methods like ?just in time? requiring lower levels of stock and hence stock management personnel and the replacement of ?Fordist? production lines by smaller ?work groups?. All of this has meant that, while the manufacturing sector has recorded an impressive increase in manufactured exports (objectively needed in view of the declining volumes and worsening terms of trade for primary products) and a smaller but still significant increase in output, there has been a net loss of jobs. Overall official statistics acknowledge that ?formal non-agricultural employment? shrunk by about 1 million between 1989 and 2001, and that the unemployment rate (on the ?strict? definition) stands at around 29,5% of the working age population. The major impact of this has clearly been on the less skilled, who in terms of South Africa?s demographic reality are overwhelmingly black.

Associated with the above has been a significant expansion of ?informal? economic activity. For some time, it was argued in official circles that this expansion was ?compensating? or ?balancing out? the effects of the decline in ?formal? sector employment. It is, however, now generally recognized that the majority of ?informal sector? economic activity is ?survivalist? or ?low quality?. Official statistics indicate that the majority of households in this sector receive an income of less than R 500 per month, and that there are 10,3 million people who live in households without any regular ?breadwinner?

From the point of view of class determination, these trends are of great significance. First, they mean that objectively traditional power bases of the working class are being undermined to some degree at least. Marxists have long recognized that the centrality of the working class in the struggle for progressive change does not depend on the working class being ?the poorest of the poor? but is associated with its potential for collective action, arising, in the first instance, from its concentration at the point of production. Trends involving a reduction in the numbers of workers in employment in the major centres of production, as well as the grouping of those in employment into smaller and more isolated work teams or units can only mean more difficulties for working class organisation, as the experience around the world in this era of capitalist globalisation tends to confirm. At the same time, what is termed the ?informal? sector encompasses categories engaged in isolated and atomised activity. Although it is here that we find many of ?the poorest of the poor?, the inability of such categories to act ?for themselves? was famously analysed by Marx in The Eighteenth Brumaire in relation to the French peasantry ? whom he described as a ?sack of potatoes?. Clearly one of the consequences of the accumulation path driven by contemporary capitalist globalisation has been the transformation of significant strata of organised workers across the world into components of a ?sack of potatoes? isolated from each other. More reflection is needed on the degree to which forms of struggle, typically associated with such strata ? which can include single issue campaigns, abstention from voting, alienation (perhaps taking the form of anti-politics politics) and, in the case of some, criminality ? have emerged as elements of struggle in South Africa and the implications this poses for progressive forces.

More work is also needed to analyse the changing class structure of the South African countryside. Within the historically white owned commercial agricultural areas many of the trends of casualisation and outsourcing, observable in the urban capitalist economy, have clearly also been present. The ?homeland? areas, of course, served historically as generators of cheap, unskilled migrant labour power for the mines, industries and capitalist farms. Even during the last two or three decades of the apartheid period, it was evident that the political economy of these areas was undergoing a major change captured descriptively in the notion of a shift in the function of the ?homelands? from ?labour reserves? to ?dumping grounds? for the surplus population increasingly excluded from productive employment in the capitalist sector. Information currently available suggests that the major sources of income of people in the former ?homelands? remains wage remittances, followed by government social security grants, with income from small scale agricultural production a distant third. Nevertheless, some re-emergence of petty commodity production and, associated with it, of a (differentiated) peasantry, seems a distinct possibility in the future, if not now.

2. Class Positioning within the State and Liberation Alliance

Based on the above, this section will attempt to sketch out how major class forces have attempted to position themselves in the class struggle in the period since 1994. Here the focus will be on two major sites of struggle, while recognizing that there are also several others ? including, critically, work-place struggles.

The first focus is on struggles within the state. Contemporary analysis and debate on the character of the post-1994 state has lost much of the rigour that was evident in the best analyses of the apartheid state by writers within the ?revisionist? or ?neo-Marxist? paradigm in the 1970s and 1980s. Much contemporary debate is understandably focused on direct policy questions ? such as the meaning and strategy to build a ?developmental? state, with those more cynical about its prospects arguing a case for increasing reliance on Public-Private Partnerships. Another key focus has been on the issue of ?transformation?. This concept, though often vague and ill defined, is supposed to refer to transformation both of structural and institutional modalities and of the agents occupying places in those structures. Different proponents in the debate have, however, emphasised the two aspects differentially with, on one extreme, ?transformation? being reduced to a change in agents alone. Underlying much of the debate on both these themes has been an implicit instrumentalist conception of the state, with much of the policy debate centring, in one way or another, around the question: how can the state be made more effective as an instrument of the liberation movement or an agency of the NDR ? While understandable in the conjunctural context, this focus has obscured a recognition of the fundamental reality of the state as a site of struggle and contestation between class forces. The tendency to reduce the issue of ?transformation? to a change in agents has also distracted attention from the need to analyse the institutional character of both the inherited and current state structures. Deriving from both the above, there has been little real analysis or understanding of the mechanisms and ways in which contending class forces have attempted to impose their positions on key policy issues. The global context and balance of forces is, of course, critical in this regard. While the domestic transition has impacted on the terms and forms of class struggle within the South African state, so too have the transitions associated with capitalist globalisation.

The ANC, which was elected into government in 1994 with a massive majority in a proportional representation system, was a mass liberation movement, organically rooted among the people and allied both with the largest trade union movement in Africa and the oldest Communist Party on the continent. There can be no doubt that the 1994 election victory gave popular forces for the first time in the history of South Africa an important bridgehead within the state. Many of those taking positions in government structures could be identified as organic representatives and leaders of the people. Prior to the April 1994 election, the ANC had h e flagship pr (th ogramme was The Reconstruction and Development Programme (the RDP). Although the RDP was a comprehensive, but unevenly developed, programme with different elements, its clear thrust was on addressing a number of developmental ?backlogs? and reducing poverty and inequality. Its basic philosophy was that promoting economic growth (an increase in the output of goods and services) and development (an improvement in the human condition) were inextricably inter-related processes. Over the ten years since 1994 many cadres, both within government structures and elsewhere, have selflessly committed themselves to improving the lives of the people. The ANC government can also rightly claim an impressive and unprecedented record of delivery of important services to poor communities ? over a million houses, provision of clean water to 10 million people, electricity connections, rural infrastructure, clinics and schools among them. This is one aspect of the reality of South Africa in its first decade of democratic rule.

But it is not the only one. ?Reality? in South Africa, as in all class societies, is thoroughly contradictory. The cadres of the ANC who entered government in 1994 with a mission to improve the lives of the people came into a terrain not of their own choosing, but one shaped both by South Africa?s own past and the emerging reality of capitalist globalisation. The negotiations that gave rise to the 1994 election had involved a compromise, in which the liberation movement was constitutionally limited in its ability to act against inherited property rights and entrenched public servants. The dysfunctionality of the inherited state was widely recognised as a factor impeding more effective and rapid advances with the RDP agenda. Much of this was, however, attributed to the actions of ?old order? officials and inherited rules and procedures. Without discounting these as elements, it is the contention of this paper that these were, in fact, not the major factors creating the contradictory reality of the state and ANC policy milieu, and indeed of South African society, at the end of the first decade of democratic government. Class struggles taking place on the terrain of state apparatuses as well as in the broader society were also critical elements in major policy choices.

A more rigorous and detailed study would be necessary to attempt to even trace the contours of some of these struggles on key policy issues, as well as identify the main loci and sites of class struggle within the state in the post-1994 period. In this respect some examination of the constitutional order ? created by the negotiated settlement and reflected both in the 1993 Interim Constitution and the 1996 Constitution - would be important. The fact that South Africa has, since 1994, been a constitutional state with limitations on the actions of government is of considerable significance. Perhaps, more important, however, will be the identification of disjunctures between the formal and the real loci of power within the state. Thus, while the 1996 Constitution is, like many others, based on a formal division of powers between the legislative, executive and judicial branches, the real powers of the different branches are, again as in many other states, highly uneven. As in the case of many other states, the real decision-making powers in the South African state are clearly located in institutions and structures of the executive. This does not refer only to the formal structures of cabinet. A variety of other structures have also been significant. Also relevant in South Africa?s case is the fact that the Constitution provides for intervention in and interpretation of executive decisions by the judiciary.

Organisations representing particular interest groups have been active in lobbying for and struggling over policies at all these levels, with those representing capitalist interest groups enjoying major advantages in terms of technical and ?professional? capacity. However, while submissions to the legislative branch (Parliamentary Committees and the like) or in statutory bodies like Nedlac have been important elements in the ongoing ideological struggle, or have influenced the content of specific pieces of legislation, less transparent processes impacting on executive decision-making have often been more important in determining the major strategic direction of policy.

More concretely, we need to uncover some of the subtle but very real mechanisms through which capitalist class power has been asserted, particularly within executive structures and institutions of the South African state since 1994. Critically important, in the first instance, in this respect has been the overall context of capitalist globalisation. After 1994, the ANC government like many other third world governments, found itself under intense pressure to don what US journalist, Thomas Friedman, has termed the ?golden straightjacket? ? policies of liberalisation of tariffs, of financial and currency markets, of de-regulation and of privatisation. These pressures were, in part, exerted by international agreements emerging from highly uneven and unequal processes of multi-lateral negotiation, such as the Uruguay Round World Trade Organisation agreement, concluded shortly before the installation of the democratic government in 1994. Since the one positive legacy of apartheid was the absence on any conditional ?structural adjustment? agreement with International Financial Institutions (IFIs - the IMF and World Bank) more subtle ideological engagement ? taking the form of seminars, debates, offers of training and research support, beginning in the early 1990s - were also critical in this regard, as was the fact that the ?Washington consensus? message was strongly promoted by domestic capital, opposition parties and the commercial press. Another significant factor was the blatantly dysfunctional and sectional self-serving nature of apartheid regulations. Undoing these could readily be identified as a step forward, even if there was no implementable alternative policy to benefit a broader constituency.

Critical in this regard were a series of decisions, taken in the context of seductive suggestions of an imminent inflow of Foreign Direct Investment, that had the effect of liberalising currency and capital markets. These need to be traced in more detail. Their combined effect was increasingly to subject the South African financial economy to the volatility of global market forces on the highly uneven and unequal terrain of contemporary capitalist globalisation.

The next critical element to emerge might be described as the ?market message?. In the absence of any conditional relationship with the IFIs, this became a key mechanism in the struggle of both foreign and domestic capital. Currency volatility and outflows of short term ?hot money? became regular features, once currency and capital markets were liberalised. Moments when the value of the currency dropped sharply or when hot money fled became occasions for a flurry of commentary by market analysts, rating agencies and the like suggesting that these problems could be averted by the adoption of particular ?Washington consensus? policy measures. The ?market message? mechanism was particularly evident at the time of the adoption of the GEAR strategy. GEAR was adopted immediately following the first sharp fall in the value of the Rand. Business South Africa (an organisation representing large corporate capital) had just circulated its proposal for macro-economic policy, entitled Growth for All. ?Market messages? suggested that the basic reason behind the fall in the value of the Rand was ?negative sentiment? arising from the fact that the government allegedly had no coherent macro-economic policy (read neo-liberal macro policy) and urgently needed to formulate one. GEAR was clearly, in large part, a response to such pressures. When several years later, it overachieved its targets on macro-stability, but manifestly failed to meet the targets of 6% growth and the creation of 400 000 new jobs, new ?market messages? emerged suggesting that the problem was the absence of other complementary policies ? such as a sufficiently ambitious programme of privatisation of state owned enterprises. Ideological engagement has also been critical in this regard. Top government officials found themselves drawn into, and clearly influenced by, a series of engagements with ?global business leaders? in, for instance, the annual World Economic Forum Davos meetings. Numerous follow-ups with a number of these ensued in the hope of attracting FDI to the country by addressing expressed policy concerns and creating a more ?business friendly? environment. These have more recently become institutionalised at top executive level in various Presidential councils (on investment, ICT etc). The emergence of a cadre of formerly oppressed technocrats schooled in the economics of the ? Washington consensus? has also been significant.

It is on this terrain that domestic South African capital, both ?white? conglomerate and ?black empowerment? have engaged. It is notable that many of the major (white) corporations have deliberately chosen to adopt a low profile in the more public and transparent milieu of legislative structures and statutory bodies ? leaving ?business? submissions to parliamentary committees and Nedlac to broader organisations like SACOB and Business South Africa. This in no way means that ?big business? chose to absent itself from policy debates and struggles. Rather, it carefully identified and facilitated the creation of quiet ?back channels? to top government officials ? some of these are now institutionalised in bodies like the Big Business Working Group. The shifting of primary listings abroad also enabled trans-nationalising corporations to present themselves as ?global players?.

Emerging black empowerment capital was sometimes also drawn into this milieu in a subaltern ?tokenist? way - to improve the image and credibility of submissions motivated by white corporate capital. But ?black business? has also found its own voice, partly in critique of the slow pace of ?transformation? of white business. Several of the most important ?black business? personalities are also individuals with credentials in the movement, allowing them to lead and champion calls for more active state intervention to promote Black Economic Empowerment (BEE). Through adopting a ?broad? approach to BEE ? where it is presented as a programme not just to benefit black business, but the black population as a whole ? significant possibilities of hegemonising the movement?s overall policy perspectives have been created, with militancy on BEE sometimes emerging as an alternative to proposals for more effective action on poverty eradication. However, while both corporate and empowerment capital have been able to exert influence within the state in these ways, they have also been obliged to do so on the basis of some claim to be able to offer a contribution to the huge challenge of poverty and underdevelopment affecting the majority. Corporate capital has had to build credibility on the basis of the elusive promise that major new investments in productive activity or cooperation in partnerships aimed at social delivery are just around the corner. Empowerment capital has presented itself as an inherently patriotic force, of the people, that if itself sufficiently empowered will generate manifold ?trickle down? benefits to the rest of the historically disadvantaged majority.

With regard to the struggles of the working class and other popular forces, it is necessary to begin by assessing the impact of trends in objective class determination indicated above. There can be no doubt that both the loss of formal sector jobs and the reorganisation of labour processes have, to some degree at least, impacted negatively on trade union organisation. Such structural changes have even occasionally been referred to in ideological polemics to suggest that Cosatu no longer has the character of an ?authentic? working class movement, and that it does not speak for ?the poorest of the poor?. In addition to this, Cosatu also lost a number of its cadres to government and even to the ranks of empowerment capital. Ideologically, both Cosatu and the SACP have had to operate in a context in which many of their policy proposals have run against the grain of the conventional wisdom of the ?Washington consensus? ? leading to their often being dismissed or ignored by ?professional economists? and the media alike. Against this, the new Constitution and labour laws passed after 1994 have created many more opportunities for labour representatives to be consulted and engaged, both on shop floor and broader policy issues. The institutional modalities of these structures merit further more detailed investigation. Mostly, they have been at the legislative level and in statutory bodies like Nedlac, whereas capital ? as argued above ? has sought to focus its engagements in tighter ?back channels? at senior executive level, where it has also enjoyed the advantage of operating ideologically in harmony with globally dominant ideological positions.

As far as the rural and urban poor in the ?informal sector? are concerned, while these have to some extent been organised in community organisations of various sorts, the latter have remained weak, reflecting the continued difficulties such strata face in emerging as class forces for themselves. They have had a limited and generally weak engagement in state structures ? mostly legislative and to some degree in Nedlac. In terms of their broader political and ideological orientation, the fact that the national question remains the major issue at this early stage of the NDR, and that the ANC government has improved delivery on the social wage front, has generally kept many within the fold of ?alliance politics?. Some signs of practices associated with alienation and discontent have, however, become evident more recently. These include declining participation by some categories (e.g. youth) in elections, and the emergence of single issue campaign organisations outside of the alliance fold (e.g. the Landless People?s Movement).

While the state has remained after 1994 a site of struggle, the ANC and alliance formations need likewise to be identified as important sites of class contestation and struggle. After 10 years in government, the ANC retains many of its characteristics as a mass organisation rooted among the workers and the poor. Its policy positions focus on the need to prioritise poverty eradication, reduce unemployment and inequality and advance the NDR in the sense long understood in the movement. It retains powerful anti-imperialist inclinations on issues like Palestine. This reflects a continuing reality that in South Africa the political centre is left, and it is no accident therefore that the ANC explicitly styles itself a party of the left. On the other hand, the ANC is the leading party in a government, operating in a conjuncture hegemonised by a rampant capitalist globalisation and subject also to the influence of bourgeois class forces in struggles outlined above. These two elements of the contradictory reality of the state and the governing party need careful analysis in identifying the contours of the emerging conjuncture that is essential in defining the challenge facing the struggle to assert working class hegemony within the next phase of the NDR.

3. Strategic and Tactical Challenges facing Working Class Struggle at the Start of the Second Decade

The beginning of the second decade has coincided with a shift in emphasis in ANC and government economic policy. The shift consists fundamentally in a much bolder assertion of the need for a strong, strategic and economic interventionist state and parastatal sector. This shift was prefigured in the government?s ?Towards a Ten Year Review? appreciation that where delivery has happened, it has been driven by the public sector. A direct outcome of this shift is the clear indication that the swingeing privatisation of the big parastatals will now be largely stopped ? at least for the next five year term. The mandate of Transnet and Eskom will be much more focused on the delivery of infrastructure for social and economic needs. The R100 billion public sector infrastructure investment is also part and parcel of the same perspective.

This shift is a product of both objective and subjective factors. Among the major objective factors has been the failure of "market forces", and the flirtation with neo-liberal policies, to deliver sufficiently to any of the significant constituencies of the NLM. The main factor behind the re-focus on "rolling back the frontiers of poverty" and the more interventionist stance in this regard has had more to do with the ANC's engagement with its mass base (the perception of the need to rebuild these links and the electoral benefit from doing so) than any major breakthrough at the subjective level in the policy debate by alliance partners - although its effect has been to bring policy positions of the ANC closer to positions argued for by ourselves. Also important is the changing global conjuncture - a tarnished, less certain and more contested ideological hegemony for neo-liberalism with a consequently greater "tolerance" for more interventionist positions.

At the risk of oversimplification, it was suggested above that capital secured a significant level of influence in the period from roughly 1996 to 2000 based on its ability to manipulate market power and deliver ?market messages?, all of this in the context of the strong hegemonic position of neo-liberalism. However, this influence depended on being able to hold out the prospect and promise that making the policy adjustments demanded by capital would be ?rewarded? with investment, growth and employment creation.

By the end of the first decade of democratic transition, however, it had become clear that neo-liberal policies, and market driven processes, had failed all class forces united in the NLM - the aspirant bourgeoisie, a professional, modernising state technocratic stratum, as well as workers and the poor. The latter is more obvious to us perhaps, but it is important to note that market driven BEE is also widely perceived as having failed an aspirant bourgeoisie, and, in its present forms, detracted from the more effective construction of a ?modern?, globally competitive economy. The effect has been a conjuncture that has seen agreement among all the class and strata forces represented in the ANC on the need for a "more interventionist" policy, a "developmental state", etc. - all of this in a context of greater "tolerance" for this in the global conjuncture.

However, we need to recognise that within this consensus there are, in fact, three somewhat distinct class projects contesting for hegemony around the meaning of a more interventionist developmental state.

  1. The first is a class project driven by an aspirant bourgeoisie looking for a more muscular state to promote BEE, essentially understood as transferring powers of capitalist ownership to a minority of black people (but a larger minority than that which has acquired such powers through the corporate-led, market-driven BEE of the first decade of freedom). This aspirant bourgeois stratum, however, continues to need its mass base, hence it needs to present its class project as benefiting the people as a whole ? i.e. it has to contest for hegemony within the NLM. It presents the strategy for overcoming the dual economy crisis, for instance, as essentially one of changing ownership patterns, selling the myth of all historically disadvantaged having the chance to become (capitalist) ?entrepreneurs?, (capitalist) ?share-holders.
  2. The second position, sometimes overlapping with the former, but with its own distinct characteristics, is a more technocratic, ?modernising? perspective that would put its priorities on building a more ?efficient?, more ?modern? economy ? where greater state intervention is designed to ensure massive investments in infrastructure that will ?lower the costs of doing business? in South Africa. The position tends to critique neo-liberal fundamentalism for its inability to recognise the amorphous character of the ?market? and its incapacity to address systemic ?market failure?, like failure to invest in economically necessary infrastructure. It cites the case of EU public investments in less developed parts of the community as a model of public sector, modernising intervention. The crisis of the dual economy is problematised as a modernisation challenge, a challenge of technocratic interventions that provide ?stairways? for the underdeveloped pole to advance upwards. The position is also somewhat critical of the last several years of BEE, less on grounds of its narrowness, and more on grounds that it has been parasitic, that it has not contributed to the extension and modernisation of the forces of production.
  3. The third project is that of the workers and the poor - immediately focusing on the demand for jobs and sustainable livelihoods. A strong state and public sector are argued for more on grounds of meeting social needs and of providing means for countering the negative impact of the capitalist accumulation path. This project also envisages the popular mobilisation of working class and poor motive forces in order to achieve transformation.

All of these class projects need to be recognised as legitimately co-existing within the NLM and indeed at this stage of the NDR none can exist without the other. The aspirant black bourgeoisie thus continues to need to present its demands for greater access to the powers of economic ownership of capital as a process that will benefit black people as a whole. The workers and the poor, within the framework of a strategy seeking to build elements of a socialist future within the present but not embarking on a fully fledged socialist project at this stage, need to encourage an accumulation path that develops productive forces. They need, therefore, to seek to influence the conduct of potentially patriotic strata within the bourgeoisie. A modernising technocracy needs to promote both a patriotic accumulation process and reduce poverty, inequality and unemployment. The struggle within the alliance is therefore not a war of position in which any particular class force can expect to knock out another, but rather a war of manoeuvre ? a struggle for class hegemony. Which of these projects hegemonises the next phase will be critical in determining the trajectory of the NDR, and in particular whether or not it moves in a direction that will meaningfully build our socialist future now. Beyond this, and outside the NLM, stands established capital, both domestic and foreign. These forces are not mere passive observers of processes within our alliance, but are actively seeking to influence processes in favour of bourgeois outcomes. The current BEE charter processes ? where a struggle over whether there will be genuinely ?broad? processes ? can be identified as an important site of such struggles.

In looking at the magnitude of the challenge facing the SACP (which obviously identifies its strategic task as being to work for the hegemony of the class project of the workers and the poor), some factors we need to consider are that our class project requires much more drastic structural change in the growth path, more interventions against the interests of capital, etc. It is, in other words, inherently more challenging. At the same time, ANC policy on many of the central issues of job creation and the promotion of sustainable livelihoods remains vague and contradictory - falling short of a clear implementable programme. The class project of a more interventionist approach to promoting narrow BEE, on the other hand, fits more easily with the continued domination of capital and can be identified as a probable "fall back" or "default" outcome of a failed attempt to promote job creation or sustainable livelihoods. Against this, however, remains the reality that ANC policies will have to credibly "deliver" something to a mass base whose main demand is for jobs.

In the context of such dynamics and contradictions, the SACP should not limit itself to a mere moral condemnation of either capitalism in general, or of emergent black capitalists in particular. Marxism has always recognised that capitalism has a progressive side to it. This progressive side relates, essentially, to capitalism?s inherent tendencies to develop the forces of production ? this includes both intensive and qualitative development (technical innovation, the skilling of workers) and extensive/spatial/quantitative development (forging of a national-home market, of regional markets, of globalisation, of job creation). Part of the SACP?s contribution to the debate on BEE should be to establish the development of the forces of production as the key criterion for assessing whether our democratic government and our movement should support any particular BEE proposals and projects. Too often BEE deals have been a diversion from investment in fixed capital, from extending markets, from job creation, from innovation, from actual entrepreneurship.

In this Central Committee discussion document, we have endeavoured to map the major outlines of what we have called the ?political economy? of our transition since 1994. We have sought to capture the major class struggle trajectories of the past ten years. We hope that this framework will contribute both to working class organisational practice, and to a wide range of more in-depth Marxist research and analysis.