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Issue 148 - Fourth Quarter 1997


Editorial Notes

Alliance Summit Documents


Apartheid and Capitalism



Now more than ever - build the Alliance

In the inevitable political manoeuvring in the run-up the ANC December National Conference, some individuals have suggested (much to the delight of the commercial media) that the 70-year tradition of overlapping membership of the Communist Party and ANC be terminated. Those individuals who have raised the matter are, of course, entitled to their views. For our part, we are convincedthat the great majority of ANC delegates at the National Conference will strongly reaffirm the traditions of the Tripartite Alliance.

However, while these individual interventions are going nowhere, they have helped to open up a broader review of the nature of the Alliance and, indeed, of the ANC. In fact, the two things are intimately interconnected. To understand the Alliance is to understand the ANC itself. The ANC is not just another political party, alongside the NP, the IFP, or the DP. The founders of the ANC described it as a parliament of the people. Many things have changed since 1912, but the tradition of the ANC as a people?s parliament is, we believe, still powerfully relevant.

The April 1994 elections sent the ANC, with a huge majority, to the parliament in Cape Town. What, in essence, is that parliament? With the exception of theANC (and perhaps the PAC), all the other political parties in the Cape Town parliament represent constituencies that benefited (or think they benefited)from the apartheid past. White capitalists, white Afrikaner nationalists, confused parts of ethnic minorities, ex-bantustan elites these are the constituencies represented by the other parties in Cape Town.

The Cape Town parliament expresses an objective reality. While April 1994 was a major democratic breakthrough, the old ruling class and its allied social forces have not disappeared. Particularly on the ideological and economic fronts, these forces still control vast resources. The resources are used to wage an unceasing struggle to block thorough-going transformation, to retain as much of past power and privilege in the hands of the old elites.

The political play of forces in the Cape Town parliament is, in essence, about this. That parliament provides an institutional framework for the national liberation movement (represented by the ANC) to contest and negotiate with the political representatives of weakened but still powerful ruling elites from the past. The Cape Town parliament is an important reality. It is far better for these contests to be contained within democratic structures, than for them to spill over into unconstitutional destabilisation.

But there is a second parliament the ANC itself. This broad popular movement is made up of different ideological currents and social strata. This second parliament is the home of the great majority who, historically, suffered from racial oppression. It is also the home of all genuinely patriotic and democratic forces, those who recognise that the struggle to overcome the legacy of colonial and apartheid oppression remains number one priority of our society.

This second parliament is the place in which we seek to mobilise and unify, through debate, discussion, negotiation and action, these different progressive currents and strata. The ANC does not belong to one or another current whether emerging black entrepreneurs or communists. The overriding basis for the strategic unity of all these forces within the ANC parliament is the common commitment to an ongoing National Democratic Revolution.

But what exactly do we mean by the NDR? This is a critical question. All too often confusions within the ANC and the Alliance arise because comrades evoke the NDR, but mean quite different things by it.

Fortunately, at the recent Tripartite Alliance Summit (August 31/September 1), considerable time was devoted to discussing the NDR, and the following broad consensus emerged:

The NDR should not be seen in narrow ideological terms. Nor should it be thought of as a mechanical "stage". When approached in this way, two seemingly opposed, but mutually reinforcing conceptions of the NDR get propagated. The one argues that (since it is only in a second stage that we shall be building socialism) the key strategic task of the present is to construct a free-market capitalism. The other position argues that (since the NDR is capitalist) we do not need to take this stage too seriously, it is a necessary delay, but with no inherent value. The Summit distanced itself from both these ways of thinking about the NDR.

The NDR is not defined centrally by answering the question: Is it socialist or capitalist? It is defined by its core strategic values to build a democratic, non-racial, non-sexist and united South Africa. It is about All Power to the People - in the words of the ANC?s draft Strategy and Tactics document.

The ANC?s alliance partners, the SACP and COSATU, have obviously adopted socialist programmes. Both state in their strategic documents and resolutions that their commitment to socialism is not in opposition to the NDR or the ANC.

Both see the struggle for People?s Power and all that it involves (democracy, patriotic unity, non-racialism, non-sexism) as absolutely integral to the struggle for socialism. The present NDR is not a delaying tactic, or a free ride on the way to a different agenda. The ANC?s alliance partners believe that only under socialism will the NDR goals be fully realised. They also believe that without democracy, patriotic unity, non-racialism and non-sexism socialism itself will be meaningless.

Some non-communist and non-COSATU members of the ANC may agree with this general socialist perspective. Others will not. Still other ANC members might see this kind of ideological debate as irrelevant in the face of the huge practical challenges confronting us. It is precisely to organise and unify all of these progressive forces, regardless of secondary differences, that the ANC and the alliance exist.

While we might have our differences about socialism, what is undeniable is that we are struggling for an NDR in a country and in a world dominated by capitalism. None of us can run away from this reality. The strategy and tactics of the ANC and its alliance partners in these concrete conditions involve a transformational engagement with capitalism. Capitalist accumulation has an inherent tendency (as the ANC Draft Strategy and Tactics document recognises) to reproduce gross class, national and global inequalities. We have, continually, to struggle against this tendency.

At the same time, we have to find, through engagement, negotiation and inducement, points of convergence with the private sector after all, it owns and controls vast resources that we require for the transformation of our country. We have to work both with and against the profit-seeking logic of private capitalism. Failure to appreciate both the with and the against results in one-sided positions, which are often at the heart of intra-ANC and intra-alliance debates. Of course, finding the right balance between with and against in any particular situation is a difficult matter. It is likely to be an area of legitimate debate within our alliance.

All of the above is the strategic foundation of the ANC itself and of the alliance it leads. This alliance is not an invention, nor an arrangement that stands or falls on the basis of good feelings. The alliance is rooted in the realities of South Africa a country in which the legacy of racial oppression continues to be the defining feature of our society. But it is also a society in which the working class, uniquely for Africa, is numerically and overwhelmingly dominant.

It is not surprising that, for over seventy years, an alliance has been forged that involves a broad-based national liberation movement, a party of socialism, and the revolutionary trade union movement. The challenges facing us in South Africa require a powerful strategic unity of these alliance forces now, more than ever.

Tripartite Alliance Summit Discussion Documents

The following two documents("Assessment of the Current Phase of Transformation and The role of the State") were discussed and revised at the Tripartite Alliance National Executives Summit, 31st August 1st September 1997. The purpose of the documents is to state the unifying strategic perspectives of the Alliance partners and to flag areas of possible difference and debate.

Assessment of the Current Phase of Transformation

1. A common commitment to the NDR

1.1 As Alliance partners we agree that the current phase is one in which we need to advance, deepen and defend a vast national democratic transformation process in our country. Among the broad Alliance programmatic policy statements on the general character and content of the national democratic process is the RDP document with which we, as an ANC-led Alliance, contested and won the 1994 elections.

1.2 As Alliance partners we have all affirmed that, since the 1994 democratic breakthrough, there have been major achievements in, amongst other things:

  • consolidating peace and fostering reconciliation;
  • adopting a progressive constitution;
  • ensuring democratic elections for all three spheres of governance; and
  • making some significant beginnings in the overall process of socio-economic change and delivery by way of legislative reform, institutional transformation and implementation of many new programmes.

1.3 These relative successes, and the general lack of strategic vision amongst our political opponents, have also resulted in a considerable decline in support for our main political opponents. This decline is, in turn, resulting in internal turmoil and some fluidity within their ranks. We need, as an Alliance, to count this reality as a further achievement on our part.

1.4 The degrees of success, whether we could have done better (or even much better), and an appreciation of where there have been failures - these are all areas of legitimate debate between our three formations, and, indeed, within each of them. In the ensuing sections of this working agenda, we shall attempt to elaborate and unpack some of these areas of difference and debate with more specificity.

However, as an Alliance, collectively and as separate formations, we have all refused to give way to the campaign of demoralisation (a campaign that is often a thinly veiled racist campaign) that asserts that "things have got worse" or "no better" since April 1994. Our preparedness to be critical and self-critical, and our preparedness to debate among ourselves should never be confused with the demoralisation campaign waged by our opponents.

A key question, that often underpins debate and confusion within the Alliance, relates to how we understand the NDR. We all invoke the idea of an NDR, yet we are often using it in very different ways.

For some, there is a very "stageist" understanding of the NDR. This "stage-ism" presents itself in two mutually reinforcing ways:

One version is that this is the first capitalist stage of our struggle, and therefore the creation of a deracialised free market capitalism is our key strategic task;

Alternately, an equally mechanical "stage-ist" approach, dismisses the current NDR as little more than a platform for a different (socialist) agenda. In this latter view, the importance of building a powerful ANC, and a united Alliance, tend to be underrated. The socialist forces in the present NDR phase are, more or less, hitching a ride, with a separate agenda up their sleeves. The NDR and the ANC are treated with cynicism.

Still another mistaken variant of the NDR is to treat it as, more or less, the equivalent of socialism. Any departures from socialism by the ANC or ANC-led government are criticised, not on practical grounds (because, perhaps, there is the belief that they will undermine the RDP or NDR), but from a dogmatic, ideological and purely labelling standpoint.

All of these positions are wrong, but all are to be found within our broad Alliance.

The official programmatic perspectives of all three Alliance formations are, however, quite different from the mistaken positions noted above. In contrast to these, the official programmatic perspectives of our Alliance are:

That the strategic task of the ANC and its Alliance is the consolidation of a united, non-racial, non-sexist and democratic South Africa summarised in the ANC Draft Strategy and Tactics Document slogan: All Power to the People. This strategic task is, deliberately, not couched in specific ideological terms. The ANC, and therefore the programmatic perspective of the Alliance it leads, are neither capitalist nor socialist.

The ANC?s two key Alliance partners, the SACP and COSATU, have both adopted socialist programmes. However, their commitment to socialism, and this is stated clearly in the official policy statements of both formations, is not in opposition to the NDR or the ANC. Both the SACP and COSATU see the struggle for "All Power to the People" to be absolutely integral to the struggle for socialism, and both believe that it is only under socialism that the slogan will achieve its fullest realisation. The present NDR struggle is not a mere platform, it is inherently valuable, and its core values will be integral to the kind of socialism both the SACP and COSATU hope to see.

Many non-communists in the ANC movement might agree with this perspective. Many others may not. It is precisely to organise all progressive, popular NDR forces within a common organisation and within a broader Alliance, that the ANC and the tripartite exist.

The ongoing struggle for national democratic transformation is occurring on a national and global terrain that is dominated by capitalist accumulation. All forces within the ANC and its Alliance, socialist and non-socialist, are compelled to recognise this reality. Some might be tempted to argue that capitalism must be abolished; and, until then, we should abstain from any responsibility for leading huge transformation struggles in the present. This amounts to a betrayal of our present responsibilities. It is not the position of our Alliance, or any of its partners. Nor is the opposite perspective, a simple and uncritical acceptance of the national and global realities as we find them, our Alliance perspective.

The strategy and tactics of the ANC and of our Alliance, in the concrete conditions, involve a transformational engagement with capitalism. Capitalist accumulation has inherent tendencies to reproduce massive national and global inequalities, and persistent unequal development as the ANC Draft Strategy and Tactics Document, clearly recognises (see section 9, p.27).

At the same time we have to find, through continuous engagement, negotiation and inducement, points of convergence with the private sector. The private sector,nationally and internationally, controls major resources that we require for any sustainable development in our country and region.

In short, we have to work with and against the profit-seeking logic of private capitalism. Failure to appreciate both the "with" and the "against" result in

one-sided positions, which are often at the heart of intra-ANC and intra-Alliance debates. Naturally, the degree of emphasis placed on the "with" and the"against" in any particular context will be the subject of legitimate debate and difficult judgement calls.

2. The balance of forces

2.1 As Alliance partners we share a common strategic understanding that, while we are committed to a profound national democratic transformation process, we are seeking to transform our society on a national, regional and global terrain that is not of our own choosing. This factual observation is not grounds for pessimism, complacency or resignation. Nor, however, can we simply indulge in voluntarism, as if fervently wishing for or advocating certain objectives were sufficient to achieve them. Because our national democratic transformationprocess challenges powerful vested interests in and outside of our country, we can expect constant opposition, and constant attempts to undermine, subvert or redirect our transformation objectives.

2.2 Between resignation or co-option on the one hand, and reckless voluntarism on the other, there are many complex choices and judgement calls. At times, within our Alliance, one or another partner might feel that another partner, or sections of it, are too resigned to, or complacent about, or co-opted by the given balance of forces. On the other hand, there may well be the counter-allegation that this or that Alliance partner, or ections of it, are recklessly voluntaristic. To remain at the level of general accusation may or may not be true. But it is unlikely to be helpful without further examination and debate.

This is why, in the sections of this working agenda that follow, we will attempt to further elaborate, itemise and provide a sense of the informational base on which strategic policy options have been chosen.

2.3 In general, however, as an Alliance we agree that the balance of forces needs to be analysed and understood not in order to become resigned to its reality. We seek to understand the given balance (perhaps it is better to speak of trajectory) of forces in order better to understand how to take forward, intelligently and in a sustainable manner, a transformation struggle that progressively changes that balance of forces itself.

3. Threats and challenges to the NDR

3.1. The general characterisation of those forces posing a threat to, or actively blocking, our national democratic transformation process is itself an

area that results in debate and difference within our Alliance.

3.2. The threat to the national democratic transformation comes, in particular, from those social forces that accumulated powers and privileges within the old dispensation. It is important, however, to disaggregate these forces into at least three categories:

  • the hard-core counter-revolution;
  • constitutional political party opposition;
  • big capital;

3.3. The hard-core counter-revolution was substantially (if perhaps temporarily) marginalised by April 1994, and it continues to be disrupted byongoing exposure (TRC, trials). But there are signs of some regrouping of these forces, whose agenda is the active destabilisation and eventual overthrow of thenew democratic dispensation. This regrouping is ccurring, in part, on the terrain of organised crime. The inter-face between crime syndicates, general destabilisation and a sophisticated disinformation/demoralisation campaign on the one hand, and 3rd force networks (that subsist in the state apparatus, or which have been privatised") is at the heart of this threat.

Possible points of difference within the Alliance:

  • Is there indeed a counter-revolutionary threat?
  • Does it constitute the principal threat to the NDR?
  • Is "law and order" the main means for dealing with this threat?
  • Do other realities (for instance, transformational mass mobilisationstruggles) wittingly or unwittingly play into this counter-rev agenda? 

3.4. Our political opponents working within the multi-party political dispensation. Attempts by our major political opponents (NP, IFP, DP, Volksfront and the new NCF/NMP) to build a coherent political bloc around those social forces that benefited from the apartheid past and/or who fear majority rule have, for the moment, foundered. They have foundered on their own disparatesocial and class character (Afrikaner separatists, whites in general defending privileges, former securocrats, minorities feeling threatened by majority rule,an ex-bantustan elite, rural traditional leaders). From an Alliance point of view, we have little to regret in this fragmentation of our political opponents.We do, however, need to recognise that they represent, in varying degrees, minority social interests of one kind or another. We have also to foster their ongoing involvement within the unfolding democratic dispensation.

The key strategic question we need to clarify as an Alliance concerns the primary thrust of our strategy to deal with our constitutional political opponents:

  • Do we seek to absorb their constituencies and their leading cadre into the ANC? And what price do we pay in terms of our own identity and core constituencyin so doing?
  • Do we seek to win as near to 100% of the vote as possible, thus obliterating our opponents? But again at what price to our core platform and transformationalgoals?
  • Or do we see them as legitimate opposition political formations representing, in the context of a multi-party dispensation, various minority views/interests that are not part of our constituency or platform, but which have a legitimate presence within an unfolding democracy?

There may, of course, not be a single answer to these questions. The answer may vary according to whether one is speaking about a party whose primary constituency is the rural black poor, or a party whose primary constituency is Afrikaner separatists.

3.5. Big capital - internal and international

3.5.1. In dealing with big capital, it is important to understand that, both in its objective activities and in the subjective attitudes of leading business personalities, we are not dealing with a monolithic entity. Big capital within our country is well aware of the fragmentation of our political opponents. It is unlikely to throw its weight unambivalently behind ourpolitical opponents and thus risk shutting the door on access to the ANC/government. Secstors of big business are, however, concerned that the ANC is unassailable politically and that, therefore, their own leverage over the ANC/government is diminished. Big capital sees our political opponents (and - but perhaps not - even the hard-core counter-revolution) not as serious alternatives (for the moment), but rather as "useful" counterbalancing forces.

3.5.2. This reality creates space and dangers for us as an Alliance in our interaction with big capital, both nationally and internationally.

3.5.3. In approaching this interaction, two extreme views are sometimes found within our Alliance:

The illusion that the profit-seeking agenda of big business is simply congruent with our NDR objectives - or (in a more cynical variant of this) that big capital is so powerful that there is no alternative to failing in with it.

The illusion that we can simply declare big capital "the enemy", and pursue headlong our own agenda regardless of the consequences.

3.5.4. The danger of the first illusion is that it disarms us. Unlike our major political opponents on the national terrain, the organising ideology ofbig capital is relatively coherent and globally hegemonic (even if its hegemony is now less triumphalist than it was five years ago). This organising ideology -essentially an ideology that fosters and justifies the conditions for the unimpeded, profit-seeking global flow of private capital - is often referred toas "neo-liberalism".

3.5.5. Because of it global hegemony, this ideology is ubiquitous and when, as an Alliance, we are divided or confused, neo-liberalism quickly fills thevacuum, presenting itself as "plain common-sense".

3.5.6. But the second illusion ("declare big capital the enemy and simply pursue our own agenda regardless") is also dangerous. The realities of our global and national situation are such that big capital controls substantialresources without which we cannot carry forward our own national democratic transformation. The power of big capital, while not unchallengeable, is substantial and, particularly on the financial markets, it is able to manipulate and destabilise.

3.5.7. However, the more strategically intelligentsectors of big capital are able to recognise that only the ANC (but probably not, in their perception, its alliance) is able to create the levels of social and political cohesion within our country (and within our region) that can establish the platform for a return to sustainable profitability. This creates the possibilities for an effective engagement with big capital from our side.

Questions to be debated

  • Do we broadly agree on the above formulations on the challenges posed by big capital to our NDR?
  • How do we manage our interaction with big capital in ways that are strategic and sustained?
  • What means do we have for gaining the co-operation, for regulating and for disciplining big capital? (some of this will be dealt with more substantially in the section on "The Role of the State")

3.6. We have distinguished three kinds of threat/challenge to the NDR. 
Differences within our Alliance are often rooted in confusions caused by:

  • An inability to conceptually distinguish these different threats/challenges bycollapsing, for instance, the NP or big capital simplistically into the hard-core counter-revolution. The different threats and challenges cannot be dealtwith identically;
  • Or, conversely, isolating one danger and elevating it into the sole challenge we are facing. For instance, treating everything as essentially a "law andorder" problem, and failing to see that more benign opponents might, because of their much greater powers and strategic capacity, pose the real long-term threatto the NDR;
  • Or, by erecting Chinese Walls between these three kinds of threat/challenge.Distinguishing them must not blind us to the possible linkages between elements in one or another (in the present or at some future point).

3.7 We have considered three challenges/threats to the NDR. There is, however, one further, overarching threat the deep-seated poverty and inequality of our society. This is, perhaps, the greatest potential threat of all. In noting this threat, we are reminding ourselves that our collective determination to press ahead with thorough-going transformation is central to averting counter-revolution. Maintaining the momentum of change is the surest means to depriving anti-democratic forces of a mass base, without which their marginalisation will continue.

4. The emergent black bourgeoisie

4.1. The observation that we are pursuing a national democratic transformation process on a terrain not of our own choosing is connected to another related matter. Put another way, we are pursuing a national democratic transformation on a national and international terrain that is dominated by the capitalist system.We cannot wish away this reality, we have to engage with it.

4.2. Based on this reality, there is a view in some quarters of our Alliance, that it follows from this that a "key strategic challenge" of the present is forthe ANC-Ied Alliance to "create or foster a new patriotic bourgeoisie". At its crudest, this observation may well be little more than individual opportunism.But in its more serious versions it represents an attempt to think strategically about how it is that we engage intelligently with the reality of a conjuncturedominated by capitalism.

It is clear that this topic needs to be thoroughly debated within our Alliance:

  • Is "joining" the capitalist class the only, or best way of engaging with the challenges of transforming ownership and management functions?
  • What is "patriotism", and, what is the measure of patriotism amongcapitalists?
  • To what extent are the emerging black bourgeois strata dependent on "white"capital, or upon their access to the state apparatus? In other words, are we dealing with a "patriotic" bourgeoisie, or with a bureaucratic or evencompradore bourgeoisie?
  • How, as the Alliance, do we engage with the reality of an emergent stratum/strata of black entrepreneurs?

5. Governance, mass organisation and mobilisation

5.1. As Alliance partners we have in our various strategic documents, and in the RDP base document itself, committed ourselves to the view that the NDR requires both decisive, democratic use of our new positions within government, and the organisation and mobilisation of our mass constituency. This strategic approach is contained, for instance, within the "people-driven" notion of theRDP.

5.2. However, our common commitment to this general principle does not mean that, in practice, it is always easy to achieve an effective complementarity between decisive, state-led transformation and mass participation.

5.3. On the one hand, there is often a major disproportionality in capacity. The technical, and policy-making capacities of government are (should be) far in advance of our mass formations. This can lead to technical impatience with mass formations, on the part of comrades in government. This impatience is oftensharpened by the enormous pressures on government to ?deliver'.

5.4. On the other hand, government structures, especially those responsible for technical functions are often barely transformed. What might seem like atechnical matter, may in fact be a serious deviation from our NDR goals.

5.5. We have, generally, failed to elaborate a clear mobilisational programme for our mass constituency. Over the past three and a half years, formerly activeand mobilised constituencies have often been marginalised spectators and anxious would-be recipients of delivery. This is a recipe for confusion, disgruntlementand a lack of a shared understanding of where we should be going.

5.6. All of the above problems are further exacerbated by the relative weakness of our organisational structures - this probably applies especially to the ANC and SACP. It also applies to our broader mass democratic movement formations.

5.7. As a result of all of the above, our shared stated commitment to combining decisive state-led transformation with popular organisation and mobilisation can often seem to be little more than lip-service. From the side of government there is the suspicion that mass mobilisation is little more than "sectoral" rocking of the boat, unnecessary disruption of government's transformation efforts. From the side of mass formations there is often the sense that government has "soldout", that it is no longer committed to our RDP and NDR goals.

5.8. We need to develop a much more concrete understanding of our strategic tasks in and out of government. We need to emerge with a practical programme of action that is capable of organising and mobilising our constituency in ways that converge with what we are seeking to achieve in government. We need, also,to appreciate, that mass mobilisation should not be narrowly equated with "marching in the streets". The variety of participatory forms that we have begunto evolve in the context of, for instance, the legislative process, must themselves be seen as mobilisational work.

The role of the state

In the assessment of the current phase of transformation there is agreement that the Alliance has choices and that it can by its actions influence the balance of forces. This position is set out in all papers that emanate from the Alliance partners. However, it is also accepted that the Alliance will have to exercise these choices and implement policies and programmes within constraints. It

follows from this that there is agreement on the need for the state to play a role in altering the balance of forces and thereby effecting socio-economic transformation. The issues that then arise are whether the state influences the balance of forces in a coherent direction and whether that direction alters the position to the benefit of a class or specific groups in the society. In addition, if the state interventions favour a class, to what extent does this alienate other classes? If this happens what accommodations emerge in the newrelationships?

The actual role of the state in the context of the above considerations is one of the great political economy debates and it is probably the key macro issue ingovernance and socio-economic transformation. There has been an active revival of this debate recently in our ranks. That the state should intervene in socio-economic processes is not in question. The question is the form and intent of the intervention. In this regard there is an unease that is expressed by many in the Alliance and the COSATU document is even more critical. It is important that this is dealt with.

On the basic form of the intervention there is ubstantial agreement that the two polar options of complete control of economic activity by the state or on the other extreme no intervention by the state in the economy are ruled out. The Alliance sees the state as making institutional interventions that bring about development and structural transformation in the society. This has been variously referred to as a Developmental or Interventionist State.

There is agreement that the exact role of the state does have to be located within the specifics of our history and the class configurations that exist. The role of race, ethnicity and the national question play a particularly important part in any analysis. The ANC view on the complexity of these issues within this historical conjuncture is more fully dealt with in Umrabulo 3 that contains discussion documents for the Conference and in the Special Edition on Strategy and Tactics. The African Communist [No 146 1997] contains papers by the ANC,

COSATU and senior SACP representatives that also canvas these issues extensively. Without going into the detail of this crucial issue, it is clear that the Alliance represents the interests of a relatively complex collectivity that includes the working class, a large marginalised and impoverished constituency and components of other classes that were racially oppressed or opposed to racism. The interventions of the state should be to address the positions of this collectivity.

The state's interventionist role is essentially a transformational role and the great challenge facing us is how we can maintain a transformational momentumwhere the state continues to spearhead a national democratic transformational process which will:

  • Alter the balance of forces in favour of the popular collectivity represented by the Alliance, where the popular forces are empowered in a manner that mobilisesthem as ongoing forces of change. This is therefore a conception that is not dependent on government alone to drive change but on an interaction with an empowered people. Such a momentum requires that transformational changes have to be sustainable and therefore strategic. Short term gains that are not sustainable or an excessive reliance on government and legislation alone willresult in the loss of momentum. It follows that the actual content of progressive reform is not the onlycriterion of transformation. The manner of achievement is crucial in that it defines the capacity to sustain mass involvement in transformation and thereby the sustainability of transformation itself.

The Alliance in its programmes of action must provide strategic leadership in this advance. It has to define the key issues that need to be addressed, howmany it is possible to deal with, and the corret sequencing in order to advance further. The Alliance is not the only force seeking to transform South Africaand accordingly it is critical that the Alliance is able to identify the areas of strength and vulnerability in these other forces.

In doing this, the Alliance has to evaluate and analyse the forces at work in the international economy globalisation and the class interests that aredominant in that arena. It then has to analyse the impact of those developments on the national and regional economies. It also has to take into account theimpact on national reconciliation and nation building. However, having done this it has to evolve and implement effective policies and programmes that alter the lives of its constituency for the better and empower it in the manner dealt with above.

The questions that have to be reviewed are, firstly, whether the Alliance is fulfilling the role in relation to the government and state that is intended; and secondly whether current actions by the ANC majority government are effecting the necessary institutional changes that will give rise to such an improvement and alteration of the balance of forces. There is a clear concern that there has been a retreat from this position, under pressure of the forces of globalisation and that a position has emerged where the role of the state isnow seen as being the neutral referee between classes. There is a concern that, in the economic terrain, the government has adopted a position of there being noalternative but to manage the economy within the constraints of an economic orthodoxy, imposed by the dominant paradigm within globalisation. This stand isparticularly strongly stated in the COSATU paper on An Alliance Programme for Socio-economic Transformation. The question also raised by this concern is whether there has developed a distinction between the position of government and that of the ANC.

The purpose of this document is to provide a framework for a structured discussion that will lead to an agreed strategic approach, that guides our actions as an Alliance. Accordingly, a full review of the debate is notpossible. What is set out are key steps in the reasoning that would inform policy in regard to the role of the state in socio-economic transformation.

There are no proponents in the current policy documents of either of the polar options - namely of complete state control of the economy or at the other poleof no state involvement in the economy. What is at issue is whether market forces are dominant and the state's role is to facilitate their operation or whether it is the state's role to lead, in that it defines the strategic parameters within which the market functions. In both cases, market forces play a role but in one they dominate in the other they are shaped by the frameworkset by the state. An important point needs to be made in regard to the meaning of market forces. In the first conception above market forces are seen as an absolute and immutable economic law. In the second conception market forces are a system of transaction and of resource allocation - both these functions are derived from and then interact dialectically with productive forces and production relations. Accordingly the state intervenes to alter the features of the market forces which are subordinate features of more basic economic structures The Alliance envisages that the state will play the latter role. However, it is necessary to be more precise on the role that the state will play.

Is the state's intervention that of establishing the rules of the game as established by the dominant paradigm? In this sense it becomes a referee betweencontesting interests and class forces within that game. Both COSATU and the SACP have expressed a concern that actions of the government indicate that this isthe position that is coming to be adopted. ANC documents acknowledge this as a danger but do not espouse any such concern in the present situation.

The problematic of the state intervening to the benefit of one set of social forces without effecting complete class domination of other social forces is a matter dealt with at some length in the Conference preparatory documents and in The State and Social Transformation. There is a clear and consistent position that the role of the state is to intervene in a manner that improves the lives of the ANC's broad and complex constituency with an unequivocal emphasis on the poor and the black majority. In doing this the state will intervene actively in market forces not necessarily to replace them with direct state involvement, but to transform the market places. However, it is further argued that there exist both objective and subjective conditions that allow an accommodation with major components of capital that can be managed to the overall benefit of the economy and the society. In this latter position, it is clear that the other two Alliance partners make a similar assessment. This raises the classic questions of strategy and tactics in the interaction of class forces and the interaction of this complexity with economic tendencies and forces. The ANC has put forward positions that argue that it is the capitalist mode of accumulation that continues to dominate the world economy and that the state in the South African situation will have to establish institutions and a coherent policy programme that strategically shapes this process to the benefit of its constituency.

The state is working with and against the forces of capitalist accumulation to achieve a defined objective. The relationship is dynamic and is in essence basedon an accommodation that seeks to structurally alter the socio-economic order.This can only be done if there is a sufficiently powerful set of social forces that the state can mobilise and thereby influence and give direction to marketforces. The state must be capable of a coherence of policy and be able to put in place the institutional structures necessary for change to take place.

This is a complex and dynamic process and it will never be a linear advance. The state will not always be able to act on its chosen terrain. If such an expectation existed in any significant quarter of the Alliance, then there will be continuous tension. However, it is equally the case that such a strategy involves judgements and decisive action. The Alliance will, accordingly, have tobe able to manage this process as we have learnt from our experience in introducing GEAR (government?s macro-economic strategic framework).

If the state is to intervene in the economy, it has to develop the institutional instruments to successfully undertake such intervention. On this score it isclear that we confront many challenges. The state machinery remains considerably unreformed. The ANC-led government?s capacity to intervene through the state isoften undermined, deliberately or unintentionally, by unreformed personnel and institutions. To some extent we have a fragmented state, and the constitutionaldispensation recognising three spheres of governance, while progressive in intent, has often in present circumstances further fragmented our efforts.

What is the nature of the state?s intervention into the economy? It is necessary to preclude from the discussion those positions that see the only litmus test of state intervention as being the ownership and control of production - anything less is seen as being an accommodation or temporary until the balance of forcesis finally tilted to this position. The position whereby the state should only lay down basic laws that facilitate the working of the market is also precluded.

State intervention can then be a wide range of actions that seek to alter economic activity. These actions include nationalisation, but this is not the exclusive intervention. Most attention gets focused on the spectrum that ranges from nationalisation to privatisation. This ignores other key interventions that are vital in the transformation. A coherent transformation will require state ownership; policies that influence private investment; changed rights of access to and use of natural resources (eg., land, water, minerals, forests, marine resources) and a range of regulatory and supervisory dispensations.

In this paper, we have focused on the role of the state in the economy. Obviously, the state?s transformational role is not confined to its interventions into the economy. A progressive, ANC-led state needs to leadoverall social and political transformation. A critical area upon which we need to bring state power to bear is in the ideological domain, not least in regard to the transformation of the media. The largely unreformed character of the media has been one further factor complicating the attempt of our Alliance and the state power we wield, to consolidate and foster an nderstanding and unity around our programmatic perspectives.

We have focused on state intervention, but clearly the state does not act alone in the transformation effort. Part of the state?s activism is precisely to helpto mobilise certain social forces. The very existence of the Alliance indicates that mass movements and organisations in civil society will play an active role in the socio-economic transformation. The state willnot rely on the direct instruments of government and state institutions alone to bring about the transformation. There is agreement on this and it is dealt with in various ways in recent documentation. Concerns are expressed as to whether there has been such mass involvement since the election. However, what is not so clearly dealt with is what this requires of the Alliance partners in their own functioning. It is clear that the management of this process is also causingproblems.

The efficacy of these interventions will depend on whether they are coherent and co-ordinated in their implementation. This requires that there is a form ofplanning. The RDP, an agreed Alliance programme, is coherent within the broad framework of its drafting. In fact it is probably more coherent than it is oftengiven credit for. However, as policy is further developed it needs to retain this coherence and an alignment to the RDP. This requires ongoing planning and monitoring. This is necessary for another critical reason and that is thatpolicy will have to be adjusted in the light of practice, available capacity, changing circumstances and indeed changing balance of forces This is a complex process that requires careful management and we are clearly running into problems. There are concerns that policy is being made and implemented by the ministers alone.

In summary, therefore, the Alliance needs to be at one on the following key issues:

    • that the state will lead, define and transform the parameters within which market forces will work;
  • the objective of the state?s interventions will be to alter the lives of its constituency for the better. In doing this it is cognisant of the constraints and that there will be an accommodation with capital in this process. It is also accepted that progress is not linear and that retreats and accommodations will be made in order to maintain a strategic advance toward our stated objectives.
  • the state that we seek to build is one that will empower in order to mobilise mass movements and organisations of civil society in the transformation process and that this requires new modes of operating from all the Alliance partners;
  • the state will utilise a range of interventions to achieve its objectives;
  • that effective state intervention requires coherence and therefore, a form of planning to ensure this. It will also be necessary to monitor and adjust policies and programmes.

    Key Areas of Policy Intervention

    The following document also from the Alliance Summit, sets out to tabulate the points of agreement and problem areas within the Alliance on key areas of sectoral policy.

    Industrial Strategy

    Industrial policy - Trade
    Investment - Empowerment

    Sources: 'Ready to Govern', RDP, 'Yellow Book' (guide to DTI and Finance),COSATU's "Alliance Programme for Socio-economic Transformation', Labour's SocialEquity, September Commission, Alec Erwin's input to Nedlac Trade & Industry Chamber, SACP document on industrial policy

    Basis for Agreement

    There is agreement on the need for an industrial strategy. A number of problem areas are identified below. However, it is likely that the areas of agreementwill be further consolidated when we have more commonality on the assessment of the current conjuncture and the role of the state in socio-economic transformation. The instruments of industrial strategy that are currently being used can be more effectively assessed in the light of the tactical, strategicand theoretical issues that arise in the above debates.

    We should accept that policy differences may exist in regard to specific and general instruments and they must be identified.

    The reason that there is agreement on the need for industrial strategy is because of the agreement that if current market forces continued in anunmodified way then the ability of the South African economy to both sustain, - and more importantly - to expand sustainable economic activity will be seriouslythreatened. The emphasis on an industrial strategy is not because other key areas of the economy such as agriculture are being ignored but because thetransformation of natural resources requires industrial processes. Without an industrial strategy our economy will revert to raw material production alone andthis will not be capable of generating development.

    Accordingly it is industrial processes, including agro-industry, that lie at the centre of rebuilding the economy as envisaged in RDP. This is strengthened byagricultural strategies that facilitate food abundance and food security. A new reality is the centrality of an information strategy.

    It is also essential that human resource, labour market and macroeconomic strategies are co-ordinated. There is a great deal of work being done in all these areas and summaries are provided for key areas in the ANC supportdocuments. This is a matter for a great deal of further work in ensuring common ground. It is essential that this is done because this is a critical arena in which the Alliance will be able to effect transformation.

    Problem Areas

    1. Lack of an agreed strategy to channel/direct private sector investment through:

    • prescribed assets
    • tax measures
    • exchange control
    • interest rate policy
    • regulation of financial sector
    • other

    2. Lack of agreed public sector investment strategy

    3. Disagreement on approach to Balance of Payments problems:

    • whether there is an excessive focus on exports which ignores the need to increase production of domestic capital goods, and
    • exchange rate policy

    4. Disagreement on whether the emphasis on export orientation and competitiveness underplays the need for:

    • a major focus on the domestic market/Southern Africa (linked to policies of redistribution which raise the purchasing power in the region and the significance of this market)
    • a deliberate programme of investment in production for this market, including the element of import substitution
    • an expansion of demand side measures
    • a tariff policy which protects South African industry where necessary

    5. Disagreement/unclarity on role of the state in the productive sector of the economy

    6. Trade Policy

    • Disagreement on key objectives: 'competitiveness' or need to build domestic industry/capacity and job creation.
    • Need agreement on an active/managed trade and tariff policy rather than 'cold wind of competition'. In this regard we also need agreement on our approach tointernational trade agreements

    7. Need agreement on a Social Plan and approach to other supply side measures(e.g. tax)

    Labour Market

    Sources: RDP, GEAR, Labour Market Commission, COSATU "Alliance Programme for Socio-Economic Transformation", COSATU Policy Conference (resolutions anddocuments), Labour's "Social Equity", ILO Labour Market Study

    Basis for Agreement

    1. The problems of the South African labour market - unemployment, inequality& poverty- will not be addressed by a low wage strategy.

    2. The structural problems of the labour market, inherited from Apartheid need to be addressed by a deliberate programme, driven by the state to:

    • reduce inequality in the labour market, and create employment at a living wage
    • create a floor of rights for all workers, especially the vulnerable
    • invest in large scale training and human resource development programmes,linked to restructuring of the labour market & hierarchies
    • promote centralised bargaining as a mechanism to achieve these goals, combinedwith a legal framework of basic rights
    • ensure active labour market measures (ensuring mobility of workers within thelabour market) are complemented by a comprehensive social wage, given the largeproblem of unemployment
    • embark on a deliberate programme of measures to ensure public sector andprivate sector employment creation and
    • introduce measures, such as a social plan, which are needed to deal with the consequences of industrial restructuring.

    The above implies a large scale state driven programme of redistribution aimed at addressing problems of inequality, unemployment and poverty in the labourmarket.

    Problem areas

    Some in the Alliance believe that GEAR reflects a shift from the above approach in that it:

    • sees a significant cause of the inability to create employment being 'labour market inflexibility' despite evidence in the ILO study on the Labour Marketthat, if anything our labour market is 'too flexible'
    • proposes a 'more flexible' Collective Bargaining system (although the RDP envisages greater Centralised Bargaining & the ILO report details considerableflexibility in the current system)
    • it appears to promote a two tier labour market (it suggests separate wageschedules for youth). This is similar to the proposal in business' "Growth for All"
    • sees the concept of wage moderation and productivity-linked wage increases as a key element in generating growth and employment - despite Reserve Bank figureswhich show that wage moderation and productivity growth have not had this effect
    • there is a view that GEAR does not envisage income redistribution to the low paid, or to workers in general
    • there is also the view that these approaches will have the effect of entrenching existing inequalities of the apartheid labour market.

      The Alliance needs to agree on an approach to ransforming the labour market, including:

    • specific measures to close the income/wage gap between those at the top and bottom
    • comprehensive social wage measures and particularly unemployment insurance for those not absorbed in the labour market
    • an employment strategy (in both the public and private sectors) to arrest
    • retrenchments and to reduce the unemployment rate
    • agreement on financing of training
    • an approach to the role of centralised bargaining and labour legislation in regulating the labour market
    • an approach to productivity
    • deal with elements of (privatised) non-wage costs which raises the cost of employment (including medical-aid and retirement )
    • an approach to the Jobs Summit

    Social Wage, Social Needs and Social Security

    Sources: RDP, GEAR, COSATU "Alliance Programme for Socio-Economic Transformation", COSATU Policy Conference

    Basis for Agreement

    The RDP, the constitution and the White Paper on Social Welfare commit the democratic government to providing a comprehensive social security system of some sort, affordable housing, transport, health, land and access to retirement benefits - all of which together constitute a basic 'social wage' package - an economic floor below which no one should sink.

    The social wage comprises of direct income transfers (such as social security benefits, retirement) and social subsidisation of the costs of basic needs (such as housing, health and transport).

    Alliance partners have put forward proposals on a number of these areas (social security system, retirement fund, public housing, public transport and the national health system). The RDP and the COSATU discussion paper see these benefits as not only addressing poverty, but having a developmental and economic logic.

    The issue which requires close scrutiny is the form, organisation, and financing of these elements of a social wage, as well as the level (amount) and thecoverage (means-tested or otherwise) of the population. Another issue which needs to be addressed is the balance between the direct revving of employers and workers, eg. for health care and social insurance, and the payment of the social wage from the fiscus.

    Problem areas

    A number of problems have been raised with the current approach:

    1. Lack of a clear process or coherent vision to set up a comprehensive social wage and social security net, although elements of such a vision exist, such as proposals for a National Health System.

    2. One view is that fiscally driven cutbacks undermine the logic of expanding the social wage, while government argues that reprioritisation of expenditureallows for development of the social wage.

    3. It is unclear whether there is actually agreement to establish a comprehensive social wage, or whether we are simply aiming at equalising the fragmented and ad-hoc system inherited from apartheid. Strategy for acomprehensive social security system has been largely absent form government policy documents. If we regard the development of a social wage package as unrealistic or unviable, this needs to be explicit.

    4. It is argued that there is a trend of moving to privatise or commercialise (subordinate to profit) provision of basic needs, in areas such as transport.

    5. COSATU has argued against what it sees as a concentration on market driven programmes of delivery ito infrastructure and housing. In its view this bothmakes housing unaffordable and inaccessible to the majority of workers and the poor, vulnerable to "downward raiding", and entrenches apartheid geography.

    Public Sector Transformation

    Sources: RDP, Constitution, ANC 1994 Conference Resolutions, COSATU "Alliance Programme for Socio-economic Transformation", COSATU Submissions on the Public Sector, September Commission

    Basis for Agreement

    1. We need to transform the public sector from being an agent of repression and minority privilege to an institution which is geared towards delivering basic services to all South Africans. As such it needs to be both representative and reoriented towards delivery.

    2. This definition extends in the RDP and the Constitution beyond the public service narrowly defined, to all organs of state, or the "public sector",including parastatals, public service at national and provincial levels, local government, and semi-statutory bodies.

    3. This transformation exercise involvesrationalisation of duplicated apartheid institutionsrestructuring of the public sector to reorientate and expand resources to service delivery, away from bureaucracy- which involves a major reallocation andreprioritisation exercise the introduction of new cultures, structures and management practices- aimed atachieving accountability, efficiency, accessibility

    4. Broad agreement has emerged - although with some differences- on important elements of a strategy for transformation: HRD, service delivery, and employmentequity for the public service, as contained in the current white papers. However there are significant differences on aspects of these, as well as other elements of transformation.

    Problem areas

    1. Lack of agreed Alliance strategy to guide restructuring process.

    2. There is still no clear audit of the public sector, and, linked to this, aplan to restructure.

    3. Restructuring has been equated with 'downsizing'. This has been intensified by the programme of fiscal cut-backs, and the ideology of 'lean state'.

    4. It is believed that, in the absence of a clear strategy, mechanical exercises are being embarked on which damage the transformation process - eg attrition and voluntary severance.

    5. Despite the National Framework Agreement, restructuring of state assets still tend to be privatisation-driven.

    6. There is lack of agreement on the role of the private sector in delivery (vs the role of the public sector). There is also no agreed approach to PublicPrivate Partnerships (PPPS).

    7. Increasing outsourcing, cut-backs, and nvolvement of the private sector in driving state institutions, all lead to a concern about the danger of running down, rather than transforming the state.

    8. Agreement is needed on the areas where expansion in service delivery is required, and an approach to resourcing this.

    9. Agreement is needed on an approach to public sector pension funds, including the question of moving towards a pay-as-you-go system, to releasestate resources.

    10. Agreement is needed on a medium-term strategy to implement the commitment to restructuring the hierarchies in the civil service, training and closing thewage gap. (Apparent agreement has given way to deadlock with the collapse of the 3 year agreement in the public sector).

    Proposed way forward

    An agreed Alliance approach on these issues should lay the basis for a National Framework Agreement between labour and government on transformation of thepublic sector.

    7. Fiscal and Monetary Policy

    Basis for Agreement

    1. We need a developmental and sustainable fiscal and monetary policy (and more broadly, a macroeconomic framework), which actively advances the agenda ofthe RDP, and is sustainable over the medium to long-term.

    The ANC has set out the origins of macro-economic policy and areas that still need to be addressed in one of the source documents available to the Summit.

    Fiscal and monetary policy are crucial components of a coherent macroeconomic policy. This was briefly dealt with in section 6.5 of the RDP. In the area ofmacro-policy there is a clear basis for agreement along the following lines :

    The RDP remains the basic document of government economic policy. Aspects of it have been further elaborated in White Papers and other policy documents. In essence it argues for the integration of five basic policy programmes: meeting basic needs, developing our human resources, rebuilding and restructuring theeconomy, building democracy and increasing participation and maintaining macroeconomic balance. The RDP is also dealt with in the ANC Conference preparation documents where it's essential strengths are highlighted.

    The GEAR does not replace the RDP. It cannot in fact do this because it only deals with one of the five programmes ie the issues around macroeconomicbalance. Macro-economic balance sets an objective of stability in key macro-economic variables such as inflation, the balance of payments, governmentexpenditure, savings, investment, interest rates and employment. These variables interact with each other and can do so in different ways. The basic argument isthat a balanced strategy will facilitate the objectives of growth and development. The fundamental objective is to provide employment and a rising standard of living to the overwhelming majority of our people.

    Macroeconomic balance is in effect an overall balance of policy measures. More importantly, the macro package has to be built on other policy programmes. Anassessment of macro policy has to consider this link between macro and other sectoral and micro policy. A characteristic of a neo-liberal package would be areliance on macro measures without supporting sectoral, micro or other institutional reforms. Accordingly it is essential to examine the context withinwhich policy is being applied and whether fiscal/monetary policy and the GEAR remain consistent with the RDP.

    It is also important to note to avoid unnecessary discussion that the "social wage" dimension of policy are mentioned but not dealt with in detail in GEAR.

    These matters are dealt with elsewhere in the working documents for this Summit.

    The Gear focuses heavily on fiscal policy because it relates very directly to the mobilisation of financial resources and Government?s own performance is mostdirectly judged on its fiscal performance. Monetary policy was not addressed as fully. However, it is clear that very detailed discussions will be needed tofully come to grips with the level of policy detail now being examined in the Alliance debate. Extracting from the various inputs, a listing of some of themain areas of concern is provided.

    Problem Areas

    1. There is no agreement on implications and objectives of current fiscal and monetary policy, and macro-economic framework.

    2. The setting of deficit targets in GEAR is seen by some to arbitrarily dictate a contractionary fiscal policy, and have major ramifications forsociety, including cutbacks in social spending, and stifling of economic expansion.

    3. Contractionary fiscal and monetary policy is believed to undermine an activist role for the state in the economy.

    4. Some believe viable alternatives to deal with macro-economic constraints have not been seriously considered, including alternatives for debt management,programme to bring down interest rates, pay-as-you-go for public sector pensions, and reduction of dependence on imports.

    5. Contractionary monetary policy is believed to stifle growth. Especially by using high interest rates as a blunt instrument to control inflation, and lackof alignment of the Reserve Bank with a developmental strategy.

    6. Some believe this monetary policy and liberalisation of exchange controlsintensifies the cycle of financial speculation, volatile capital flows, and lack of productive investment.

    7. Contractionary fiscal and monetary policy are believed to undermine employment creation.

    Employment Strategy

    Basis for agreement

    1. The creation of sustainable employment, the protection of existing employment, and the reduction of unemployment levels, is not the task of onearea of government policy, or the function of one department, but needs a comprehensive approach which synchronises all elements of policy into a co-ordinated strategy (particularly industrial, trade and investment policies, public sector and public works, fiscal and monetary, and labour market policies). The employment strategy needs the commitment of all the majorstakeholders in society.

    2. The strategy needs to be consciously seen as part of a programme to address the legacy of poverty and inequality, and therefore implies the creation of particular types of employment. An employment creation strategy which focuses mainly on creating low-wage employment, and reducing or freezing wages of thelow-paid does not address the problems of poverty and inequality. This would rather be a strategy for redistributing poverty.

    3. The unemployment problem in South Africa is structural. Therefore, an effective employment strategy has to involve restructuring of production and theeconomy, led by the state. A market-driven, private sector-led strategy will continue to entrench inequalities, and substitute labour with capital. Ifstructural problems in the economy are not addressed, drives for greater productivity will not in itself resolve the problem, but can continue to worsenunemployment.

    4. A planned, co-ordinated investment and industrialisation strategy, led by the state, is critical. There needs to be an active strategy of targeting and promoting sectors and areas of economic activity which have most potential for creation of sustainable employment.

    5. Employment strategies need to be aimed at expanding the formal sector of the economy, rather than contracting it, or expanding informal and unregulatedeconomic activity. Also, the use of temporary, part-time, or casual workers, is associated with the reduction of the quality of employment, and the number of full-time workers, and should be discouraged. We do not agree with the TINA argument that job-less growth and reduction in formal employment is an inevitable feature of the current global situation, which has to be accepted.

    6. An active employment strategy should also be seen as part of an economic strategy to stimulate domestic demand. As more workers are brought into the economy as producers and consumers, this in turn stimulates further employment.

    7. A long-term employment strategy needs to benchmark its targets against the reduction of levels of unemployment and underemployment. Even apparently large-scale creation of jobs (as in Gear) is consistent with rising or static levels of unemployment (given new entrants onto the labour market). Further, socialagreement is needed on maintaining existing employment, and investment in new employment as a social priority. There needs to be a national climate in whichagreement is reached on a programme for retention of existing jobs, and creation of new employment. This needs to be agreed at national, sectoral and workplacelevels. Where there is a crisis in an industry, a Social Plan needs to be put in place to deal with the downscaling process.

    8. In addition to promotion of employment in the private sector, there needs to be agreement on an employment strategy for the state sector, the socialsector, and small enterprises. This should include:

    • plans for mass delivery of public infrastructure; public works; labourintensive construction; procurement strategies; an agreed approach to PPPs; andexpansion of the public sector in areas of service delivery
    • the development of a co-ordinated employment strategy involving all governmentdepartments and state agencies
    • parastatal employment plans, which link employment expansion to roll-out ofservices
    • fiscal and monetary policies aimed at encouraging productive and employment-creating investment, and penalising speculative or employment sheddinginvestment
    • investigation of the viability of promoting the social sector, including a co-operative sector, and other elements of worker and community-owned enterprises
    • land redistribution and promotion of small-scale farming

    Problem Areas

    1. Lack of agreement as to what constitutes the major impediments toemployment creation, and the reduction of unemployment.

    2. There is a view that current policies - including macro-economic policies,industry trade and tariff policies, investment policies, public sector restructuring, and privatisation - are not acting to create employment; arestifling economic activity; rendering our industries vulnerable to job-loss and inhibiting productive investment. Further, that the drive in some quarters toderegulate the labour market threatens to undermine the quality of existing jobs.

    3. There is also a view that over-reliance on private sector driven growth and investment, without the introduction of measures to lead economic activity,and to channel and discipline capital, are failing to counteract, or leading to entrenchment of patterns of financial speculation and job-less growth. There isa need for agreement on measures to regulate the private sector, aimed at employment creation.

    4. There needs to be agreement on what programmes and strategies the state can use in its infrastructure programmes, housing, procurement, public works,taxation, etc; to use its economic leverage and regulatory powers to ensure employment creation.

    5. In particular there needs to be a review of our approach to the following areas, around which there is disagreement, or different perspectives:

    • tariffs and trade negotiations
    • export orientation vs. development of domestic market
    • role of SMME's
    • role of state in employment creation
    • the impact of labour market policies

    The Functioning of the Alliance

    1. Brief Assessment of Alliance since April 1994

    While in the public media a great deal of attention is continuously given to predicting an imminent "break in the Alliance", from within the Alliance, thisis not a dominant concern. What is central is the question: "How do we make the Alliance work better?" The question marks a general appreciation that,notwithstanding the general commitment to our Alliance, it is an Alliance that has not functioned nearly as effectively as it should have. To assess thisfunctioning and to seek improvement it is useful to consider a number of areas:

    1.1. Policy-Formulation

    The Alliance was central to the drafting and popularisation of the RDP in 1993/4; since April 1994 there has been intense interaction within the Alliance on some issues of policy-making (restructuring state assets, new Constitution). In other cases, especially when the matter is of direct sectoral concern to, for instance, COSATU, there is intense engagement with ANC ministers in government but less effective Alliance management of the process in general.

    In the course of 1997, the ANC has sought to rebuild its own policy-making capacity, and in the process the SACP and COSATU have been increasingly involved in policy conferences and seminars. Question: how successful are these initiatives? ; how can we improve upon them?

    On many other issues there has been less effective Alliance work on policy-formation - reflecting in part the complexity and vast scope of policy-making in

    the new circumstances, and the disproportionality between government capacities (and pressures upon it), and the capacities of our three allied formations.

    1.2. Organisational Co-Operation

    There are a number of sectoral areas in which there has been substantial cooperation between two or all of the Alliancepartners. These include:

    • co-operation between organising departments of SACP and ANC
    • co-operation between SACP and ANC on political education, and between SACP and COSATU affiliates
    • close strategic co-operation between SACP and ANC in the financial/fundraisingarea
    • tripartite co-operation in media production and through the Alliance project -the Centre for Democratic Communication
    • co-operation in the field of the Internet
    • some co-operation around international solidarity work - jointly hostingsolidarity groups etc.

    1.3. Elections

    The Alliance has fought the various rounds of elections together. Presumably this has, in general, unified and broadened the ANCelectoral effort, at least within our own core constituency. We need, however, also to assess how effectively the Alliance has worked in these electoralcampaigns and what needs to improved.

    1.4. Overall Co-Ordination

    • the national secretariats have met on a fairly regular basis (in theoryfortnightly) throughout the last three and a quarter years. However, these meetings often lack a capacity to carry through decisions, reflecting organisational weaknesses within the respective formations. The meetings are often focused on immediate interventions, and on crisis management.
    • national officials - In the last months of 1996, and through 1997 there have been relatively frequent Alliance bi- and tri-laterals between officials of the respective formations. It is generally agreed that such meetings need to be more regular, in part to buttress the coordination at the secretariat level, and inpart to raise the Alliance debate to a more political and strategic level.
    • joint executives - over the past three years there have been five meetings of delegations from the three executives. (This is the sixth). It has been resolvedthat these need to be more frequent - around 3 per year. The lesson derived from the April 1997 executive summit is, however, that it is imperative that suchmeetings be well prepared with a clear set of objectives and effective documentation - otherwise they can set us back, rather than take us forward.

    1. 5. Alliance co-ordination at provincial, regional and local levels.

    All of the above occur at a national level. At other levels the picture is even more uneven. In some provinces there is regular and effective contact betweenthe Alliance partners, but this is often the exception rather than the rule.

    2. Areas of complication within Tripartite Alliance

    2.1. Managing differences. In the ANC's 1997 January 8 statement it is said:"We need from our allies unity in action, but a real unity based on our different formations acting independently and robustly defending their principles, their constituencies and their perspectives."

    This clearly states the fundamental basis of any meaningful Alliance. There would be little point for an Alliance if the respective formations were mereechoes of each other, or if they agreed absolutely on everything.However, when differences do emerge, it is not always easy to deal with them effectively and constructively. Finding the right balance between unity inaction and robust independence can be complicated. In our situation, much of the media and other unfriendly forces are on the constant look-out for signs of "tension within the Alliance". These forces are happy to muddy the waters.

    We have, as an Alliance, learnt a number of lessons these past few years:

    • constant communication at all levels is crucial, particularly when one or another Alliance partner is about to issue a critical statement, for instance;
    • respect for the constructive raising of concerns is essential. If our various formations do not raise certain critical concerns that are in the public domain,other more hostile forces - ultra-left, or demagogic forces - will.
    • however, we all need to be constructive. We need to guard against cheap, public point-scoring.

    2.2. The opportunistic use of Alliance structures.

    One of the major sources of irritation, particularly at a grass-roots level, within the Alliance has been a tendency for elements (who have, for instance,failed to be elected on to the ANC branch executive) to use an SACP (or SANCO) branch to launch a rival claim. This kind of activity is often closely bound upwith inter-personal rivalries and election-list processes.

    There is no simple solution to the problem, but it calls for maturity and decisiveness from local and provincial leaderships, and also a clear division of labour and strategic purpose of our respective organisations. (An SACP branch is not an alternative to an ANC branch, but a local-level organisation of socialists within the context of a broader ANC-led Alliance).

    The SACP and COSATU have incidentally, systematically disowned those who have sought to be elected into local governments for instance on an "SACP ticket".

    3. The lack of a clear Alliance Programme of Action

    The most serious obstacle to the effective functioning of our Alliance has, however, been the absence of a common Programme of Action around which we can:

    • unite our efforts strategically;
    • build our respective organisational structures
    • re-build a broader mass democratic movement; and
    • mobilise popular forces.

    It is this lack of a clear Alliance Programme of Action that has exacerbated all of the other problems noted above. And it is a lack that deprives our co-ordination work of any strategic purpose,' or measuring stick. This summit must help us to develop such a Programme of Action.

    A programme for the Alliance

    Basis for Agreement

    There are two major components which need to be present if the Alliance is to effectively drive the process of transformation:

    • an agreed Alliance platform on key strategic policy areas for transformation;
    • a mass-driven programme to ensure that the popular forces, together with the democratic state, are able to drive forward this Alliance platform in the face of resistance from forces attempting to block transformation;

    2. The RDP remains the perspective of the Alliance, and needs to be asserted as the basis for our programmes of transformation.

    3. We need, in the concrete conditions facing our new government, to develop an agreed programme to implement the RDP, and to identify which are the keyareas which the Alliance wants to focus on to tilt the balance of forces, and qualitatively advance the transformation agenda.

    4. The COSATU Discussion Paper has proposed that the Alliance reach an agreement on an approach to implementation of transformation, and identifiescore strategic areas where such an agreement could be reached. The Alliance needs to decide whether it wants to pursue this approach. It also needs todecide whether this would form the basis of the platform for the 1999 elections.

    5. Our constituencies have largely tended to be spectators in the transformation process. The Alliance needs to galvanise a mass movement for transformation, which unleashes the energies of our people in taking forward programmes which concretely improve their lives. Such a movement needs to be driven by the Alliance, but needs to go beyond the Alliance by incorporating all key sectors and strata of the popular forces. Such a movement would need to openly mobilise and defend government programmes aimed at transformation, which are being resisted by conservative forces. Creative campaigns at national and local level are also needed to capture the imagination of our people, and involve them in implementing practical projects, such as national literacy, health, housing, public sector transformation and other programmes. Proposals have also been made for the donation of working time to reconstruction projects, and financing mechanisms which could leverage the economic muscle of our people.

    6. The Alliance needs to set up the appropriate structures, including at the highest level, to plan, monitor, and implement this two-pronged programme fortransformation. Experience has shown that existing Alliance structures are not able to perform these functions. To align the Alliance and government programmes will also require close structural co-ordination. Serious consideration should be given to the Norwegian model, which involves weekly planning meetingsincluding the Prime Minster, Party leader and trade union leadership to ensure effective co-ordination.

    So whatever happened to the famous ten million?

    The South African Homeless People's Federation has been pioneering a people-driven housing construction programme, based on popular savings and self-help, co-operative building and bulk purchasing. However, not all ANC Housing MEC's have been supportive of the programme. In this short piece, the Homeless People's Federation explains the programme and locks horns with those who have disparaged it. 

    In a recent speech in Gauteng, provincial Housing MECDan Mofokeng told assembled private sector developers upon whom his department has relied almost exclusively to deliver houses to his province's homeless ? that the South African Homeless People's Federation had managed to build only 30 houses with its grant of R10m from the Ministry of Housing. Perhaps this is a good time toset the record straight.

    Why uTshani Fund?

    uTshani Fund is a 'revolving' fund which provides low-cost loans to households affiliated to the Homeless People's Federation. Members of the SAHPF are residents of informal settlements and backyard-shack dwellers. Average household income in the Federation is R800 per month. Most Federation members are informally employed. The majority are women. Because of their economic situation, nearly all Federation members are unable to obtain housing finance from formal institutions. This is a situation they share with a large majority of homeless South Africans.

    Government housing policy assumes that the capital subsidy - a maximum of R15 000 - will provide low-income households with a serviced site. A "house" may be provided if there are sufficient residual funds. In most cases where low-income households cannot access formal finance to "top-up" the subsidy, the limited resources left after land, services, and private sector fees, profits and costs have been deducted can only provide a minimal structure, often smaller and less adequate than the informal structures they are meant to replace. As a result, current housing policy, particularly in provinces like Gauteng where provincial governments are not interested in supporting self-help initiatives, is little more than the old site-and-service policy plus a brick shack. Shack-dwellers call these uvezanyawo: "where your feet show", suggesting that the houses are so small that your feet stick out through the window when you sleep.

    It is worth noting that it is not uncommon for non-material costs, like professional fees and contractor profits, to exceed 50% of the value of the subsidy. The problem is thus not just the value of the subsidy (implicit in Mofokeng's recent call for its increase to R19 000), but how it is delivered to the poor. Obviously if such a large amount of the money allocated to housing our country's poor is going into private pockets and not into bricks and mortar, something is seriously wrong. This is a matter which should interest any taxpayer. 

    Foreseeing this result, in 1994 the SAHPF established uTshani Fund as a source of low-cost housing finance for its members. Because we expected Federation members to be able to access the subsidies to which they are legally entitled, uTshani Fund was initially designed to provide both "bridging" and topping-up finance. Federation members could borrow from uTshani Fund, build a house, and retire as much of the loan as possible from their subsidy. Any remaining loan balance would be repaid at an affordable rate, usually around R100 a month.

    But access to essential finance is not the only benefit of the uTshani Fund system, something which became clearer to us as time went by. Because Federationmembers build collectively, contribute their labour free of charge, take no profits, charge no fees, and buy materials in bulk, they are able to constructmuch larger houses than the private sector. Federation houses average nearly 60 m2 and cost three times less per m2 than private-sector houses. That means threetimes more "bang for the buck" for South Africa's taxpayers. It also means three times more living space - lack of which is acknowledged to be fuelling South Africa's crime.

    The early results of uTshani Fund lending were so encouraging that the late Minister Joe Slovo undertook to add to our existing loan capital with a grant ofR10 million. This offer was confirmed by Minister Sankie Mthembi-Mahanyele and was put into effect in early 1996. These funds are held in a special joint Federation-government Trust called uTshani Trust. They are used in the same way as other donated funds: as loan capital to be repaid with interest by Federation borrowers.

    To date, uTshani Fund has on-lent nearly all of this R10m (which augments funds received by overseas donors). One fact is clear: uTshani Fund has facilitatedthe construction of nearly 1 500 large, affordable houses for Federation members, over 250 of which have been in Mofokeng's Gauteng. So far the R10m grant from the Ministry has provided finance for over 800 of these.

    Isn't this Masakhane?

    A critical point can easily be missed in these figures. Our limited funds, including those donated by government, could go much, much further if the subsidy system were truly accessible to the homeless poor. Unfortunately, forthe majority of Federation members, it is not. Incredibly, despite the Federation's demonstrated success and clear connection to the government's policy of Masakhane, many members have been unable to access the subsidies to which they are entitled. In some areas houses built three years ago have still not been credited with subsidies. (Imagine what would happen if the government treated a private developer this way!)

    Indeed, of the more than R12m in loans given by uTshani Fund, only slightly more than R1m has been recovered from subsidies - about 8%. All of the other subsidies received, on the other hand, have been used directly in conjunction with smaller topping-up loans, as was our initial intention.) As a result of this, most of our uTshani Fund is tied up as bridging finance. And whilst Federation members who have received "bridging" loans wait for their subsidies, they pay interest costs out of their own pockets - in some cases amounting to thousands of Rands as the months and years go by. In fact, out of the over R1,1m repaid by Federation members on their loans over the last three years, only 14% of it has been credited to principal. These scarce resources should rather be going into housing and other improvements, not finance charges.

    This would not be the case if those provinces who decline to support people's housing changed their ways. Consider the maths of it. If a subsidy is availableup front, the average "top-up" loan can be much smaller, say on a ratio of 1:4. uTshani Fund could therefore reach many more households. For example, whilst "bridging" loans average R10 000, the average "top-up" loan is about R2 500.Thus, whereas the R10m in uTshani Trust will reach only 1 000 households in the first round if used as bridging finance, it could reach 4 000 or more if used astop-up finance in conjunction with a subsidy. The effect would be the same with new loans out of repayments "revolved" back into the fund. Four times the bang-for-buck.

    The sad truth is that some provinces, including Mr. Mofokeng's Gauteng, will not release subsidies to poor communities. They will only work via those self-samedevelopers who regularly pocket large chunks of the subsidy.

    This situation is particularly distressing given the uTshani Subsidy Agreement negotiated with the National Housing Board and the Department of Housing in1996. This Agreement was intended to facilitate a rapid flow of subsidies to the Federation, in recognition of its innovative role in meeting the housing needs of the poorest of the poor. In this way it could serve as a fore-runner of the people's housing process, to be idened to include many organisations.Nevertheless, a year later many clearly eligible Federation members remain without subsidies. Once again, the reason for this lies with the provinces.Although three provincial Housing Boards have officially adopted the uTshani Agreement, North West, Gauteng, and the Free State have rejected it, citing theconstitutional rights of the Provinces to determine their own housing policies.In the meantime, Federation members in those provinces continue to bear theinterest cost of this "bridging" finance - effectively on the Provinces behalf.

    This is an increasingly serious situation for uTshani Fund and for Federation households who have made major financial decisions about borrowing and buildingbased on the expectation of a subsidy. As things stand, the original R10m grant from the Housing Ministry will soon be exhausted. Although new loans will bemade out of repayments revolving back into the Fund, until we are able to break the provincial subsidy log-jam, more and more Federation members will be forcedto wait for their turn to borrow and build, their efforts to help themselves unrecognised and unsupported.

    So that's what happened to the Famous Ten Million. It's tied up as bridging finance in a crazy system of opposed housing policies, one run by the national government, the others run by the provinces as they see fit. Money given by one branch of government tied down by the intransigence of another.

    Paradoxically, although it's empowering many of the homeless poor to meet their own needs, as Joe Slovo envisaged, uTshani Fund is also helping to cover up for the strange alliance of ANC politicians and private developers in provinces like Gauteng. And whilst they wait for the day when government delivers on its promise of a subsidy, Federation members are silently paying interest. It's an expensive cover-up, both for the poor - and the taxpayer.  

    Globalisation - A Requiem for Socialism ?

    Mbuyiselo Ngwenda, general secretary of the National Union of Metalworkers of SA (NUMSA)

    It is ironic that just as the long struggle for majority rule in our country has finally come to fruition, it appears that, at the same time, a process called"globalisation" has come to limit the capacity of democratically elected government to represent the people who elected it. Clearly, this fashionable word, heard everywhere among political leaders, journalists, cademics and trade unionists, has severe demobilising effects on popular struggles.

    But what does globalisation actually mean? Why does it have such a powerful persuasive effect even on some prominent socialist political leaders? I guess itis important to say at the outset that there is no one "correct" answer to the question of "what is globalsation?" save to say that any answer is alwaysharacterised and underpinned by class interests.

    To many, including some former socialists whose Marxism proved incapable of shielding them from the temper of the times, the failure of socialism is now sealed and the reason is simple and obvious. According to them, the rawstructural power of what has been labeled "globalisation" has wiped socialism off the map of human possibilities. The compromises of social democracy and the collapse of communism are the political expression, in this view, of this material fact.

    By identifying globalisation as the only possible model for development, rather than a particular model based on certain social relations and social constructs,'globalisation" expands beyond the economic into the ideological as the "only option". It acts as the ultimate conservative ideology. Additional justification is redundant, any challenges irrelevant. What progressives are left with are lamentations about corporate power and hand wringing over our collective victimisation.

    The essence of capitalism as a social system is the structural drive to accumulation. Accumulation involves the interaction of surplus extraction (class exploitation) and the movement of surplus to sectors and regions with the highest returns (competition). There are many "histories" to the history of capitalist development, but central is the process by existing barriers to the creation of surplus and the increasing mobility of capital were removed, and new institutions and mechanisms developed. This process was uneven and dynamic, dependent on the national responses and counter-responses of classes and the development of capitalism internationally.

    The present era emerges out of the economic crisis of the mid-70s, as Europe and Japan completed their post-war recoveries, global competition increased. Japan,

    in particular, was able to combine high tech, low wages and new forms of work organisation in the context of weak unionisation. Japan became the focus of a

    "new" response to the intensified competition. It was a response that was both international and domestic. For Western capital in the 1970s, the earlier post-

    war concessions made to the working class to legitimate the inherent inequality of capitalism, were no longer affordable, and had to be rolled back. In some cases the steam-roller did not stop at the post-war concessions, but also sought to destroy fundamental rights, social institutions and perspectives that had once seemed uncontroversial.

    Capitalism is today not only accelerating its role internationally, it is also accelerating its intrusion into the local domain. It invades every aspect of ourlives, from family life to our personal make-up, to the narrowing of what values can be "legitimately" pursued. It is the pervasiveness of capital, its dominanceof social and private spaces, as well as itsinternational scope, that defines our times. It is not just the international dimension singled out by"globalisation". Moreover, all of this is not fundamentally new. The inflation of globalisation into the end of history, and the patronising lectures mockingthe left?s failure to understand the implication of the new stage of capitalism, overstate the significance of changes in capitalism, while ignoring the intellectual traditions of socialism. The socialist project, introduced in the Communist Manifesto, was from its very beginning conscious of capitalism as an international system.

    "Modern industry has established the world market", Marx and Engels wrote.Moreover, from its very beginning, capitalism meant the most invasive intervention into our private lives. What, after all, could be more intrusive to individual and family life than the forced transformation of human activity into a commodity?

    Harvesting Apartheid

    The complicity of business in racial oppression

    The following document was submitted by the SACP to the November 1997 Truth and Reconciliation Commission hearings on "Business and Apartheid".

    1. Introduction

    Past oppression goes on earning compound interest

    A very common argument is that racial oppression in our country was "dysfunctional" for capitalism. Business, we are asked to believe, was not complicit in general racial oppression, nor in the specifics of the apartheidsystem. There is even an attempt to present the major private sector corporations in South Africa as themselves the innocent victims of apartheid. After all, "capital" and the "market", we are told, are colour-blind.

    Colour-blindness may well be a feature of some disembodied and a-historical capital or market-place. However, here, in South Africa, over many decades,

    actual capitalists, the markets they dominated, and the real-life corporations they owned and controlled were deeply complicit in institutionalised racial oppression, and in the systematic undermining of the fundamental human rights of the majority of our people.

    It is true that, in the end, racial oppression and the specific policies of apartheid, impoverished our society, plunged our country into grave instability, leaving a legacy that is, perhaps, to no-one?s long-term advantage. But the overall and final dysfunctionality of apartheid, which many business circles are now happy to concede, should not lead us to imagine that there were not many,substantial and relatively enduring advantages secured by sectors of business through the racial oppression of the majority.

    The idea that the private sector?s chief sin, if indeed there were any, was that it failed to "speak out against a system that was against economic logic" is spurious. Capitalism in South Africa was built and sustained precisely on the basis of the systematic racial oppression of the majority of our people.

    The argument that business and apartheid were structurally inimical to each other seeks to direct explanations and responsibility for apartheid towardsother factors. In particular, it has often resulted in theories that border, themselves, on racism. Apartheid and generalised racial oppression are attributed to the "frontier" mentality of white Afrikaners, for instance, and this has often been contrasted with the "enlightened", "Western", "modernising" outlook of the business-sector.

    We do not contest the relatively autonomous impact on racial oppression made by certain strains of Afrikaner nationalism and its organising institutions, notleast the National Party. Nor do we deny that there were often intra-elite, intra-white tensions between leading sectors of the business-community and, for instance, National Party governments.

    The historical record shows, however, that:

    • far from being innocent of racial oppression, it was precisely the captains of industry, particularly those associated with the diamond and gold-mining industry, who pioneered many of the core features of what later came to be known as apartheid;
    • far from spontaneously eroding racial oppression, profit-driven economic growth in South Africa coincided with the deepening oppression and dispossessionof the majority;
    • even in the final two decades of apartheid rule, in the midst of a deepening economic crisis, a sometimes wavering business community in South Africagenerally collaborated heavily and benefited enormously from a close relationship with the minority regime.

    While the historical purview of the TRC strictly only covers the period since 1960, it is impossible to do justice to the responsibility of business in SouthAfrica without touching on the historical origins of industrial capitalism in our country.

    In fact a brief retrospect is essential. The vast corporate empires that dominate South Africa?s skyline today were built upon systematic racial oppression. They were built on the dispossession of the majority?s access to land, on the ethnic cleansing of residential and trading areas, on the concentration-camp compound system, on the pass-law dragooning of workers, on a mining industry in which over 94 years more than 69,000 workers died and over 1 million were injured (A Odendaal, "The weight of history: dealing with the past in SA", 29 July 1994). In later decades, the corporations grew sleek on an arms industry that was subsidised by billions of rands from tax-payers? money, an arms industry that was responsible for the devastation of our entire southernAfrican region.

    The huge wealth that flows through the Johannesburg Stock Exchange, that primes the pumps of today?s corporations, that is invested in (and, often, disinvested out) of our country, all of this is, in a very real sense, laundered money, laundered power and privilege.

    For this is the peculiarity of these private sector corporations. Past oppression, past super-profits based on the gross neglect of workers? safety, past involvement in the arms industry are not past realities. They continue to earn compound interest, they continue to underpin vast and still accumulating powers and privileges.

    2. The role of business in laying down the foundations of apartheid

    "As a mining proposition, the Rand is known all over the world as a low grade proposition, and you would not be able to work it unless you did have very cheaplabour." (evidence of the Superintendent Engineer of the New Consolidated Gold Fields to the Mining Industry Board, 1922.)

    "What made the Rand possible was the fact that the Kaffir worker would be employed for not over fifty pounds per year" it is indisputable that the mines were saved by the services of a non-competing group of black workers." (DWGilbert, "The economic effects of gold discoveries upon SA", Quarterly Journal of Economics,1933, p579 - the figure of fifty pounds refers to wages plus food and lodging.

    The origins, character and trajectory of South Africa?s modern industrial capitalism lie in the mining revolution of the last quarter of the past century. The consolidation of large mining houses was premised upon and in turn accelerated the formation of a racially divided labour market, in which the majority of black workers were super-exploited. In the course of activelyforging the super-exploited black proletariat, the mining-houses, with the assistance of the governments of the day, laid the basis of what later came to be known as the apartheid system.

    There were three defining elements of this process:

    • the acceleration of land dispossession, the undermining of the self-subsistence of African societies and the Reserve system;
    • the pass laws;
    • the compound system;

    Land dispossession and the 1913 Land Act

    Centuries of colonial settlement and a century of British imperial army occupation had resulted in whole-sale land dispossession. The emergent industrial mining companies in the last quarter of the 19th and the firstquarter of the 20th century benefited from this reality, and contributed to its acceleration.

    By the time of the new Union of South Africa (1910), and notwithstanding the by now deep crisis of formerly independent African polities and economies, themining houses still felt more was required. African communities were still too independent and not sufficiently impoverished to deliver up sufficientquantities of labour to the mines.

    In March 1912, for instance, the President of the Chamber of Mines complained:

    "The tendency of the native is to be an agriculturist, who reluctantly offers himself or one of his family as an industrial worker for just so long as the hut tax can be earned, and expects the industrial demand to expand to give him work when his crops are bad. He cares nothing if industries pine for want of labour when his crops and home-brewed drink are plentiful."

    The old, colonial hut tax measures were not sufficient, something more drastic was required. The President of the Chamber went on to specify:

    "What is wanted is surely a policy that would establish once and for all that outside special reserves, the ownership of land must be in the hands of the white race, and that the surplus of young men, instead of squatting on the land in idleness and spreading out over unlimited areas, must earn their living byworking for a wage" (quoted by Frederick A Johnstone, Class, race and gold, Routledge, London, 1976, p.27)

    It is not difficult to see whose agenda underpinned the notorious 1913 Land Act, that confined African land-ownership to 13% of our country. Industrial miningcapital inspired the reserve system, itself the direct forerunner of the bantustan dispensation in the second half of this century.

    The racial contract labour system and pass laws

    The mining capitalists were also active in extending and drastically intensifying the contract labour system and the pass laws. The Cape 1856 Master and Servants Act contractual provisions were extended to all African workers in the gold mines by the Native Labour Regulation Act of 1911. This served to criminalise breaches of contract by black workers on the mines.

    It was a provision that was deliberately racist, and it excluded white mine-workers. As the leader of the white SA Labour Party accurately observed of the difference between white and black workers:

    "If I make a contract to labour for you and I refuse to carry out that contract, your only remedy is to sue me in the courts. If a native enters into a contractto labour for me and does not carry out his contract, it is a crime against the State for which he can be punished with imprisonment. That distinguishes the free system and the quasi-feudal system." (Evidence of F Creswell to the Low Grade Mines Commission, 1919/20, quoted in F Johnstone 1976, p.36)

    The predecessors of today?s "free market" ideologues were very clear that they had no intention whatsoever of allowing a "free market" for "the average nativeLabourer" to exist. As the Director of Native Labour expressed it in 1919:"To make him an entirely free agent as a labourer would certainly cause industrial dislocation and jeopardise the economic prosperity of the country."(ibid. p.35)

    To buttress the contract labour system, the mine-owners also successfully campaigned for the extension and intensification of the pass law system. All African mine-workers (many of them from outside of South Africa) were made subject to the Pass Laws by the Native Labour Regulation Act of 1911.

    The compound system

    The racial, coercive regimentation of black workers through the extension of pass laws and the contract system was further complemented by the mining companies? own invention - the concentration camp-like accommodation of African workers.

    The compound system was first pioneered by De Beers on the Kimberley diamond mines, and then implemented on a large-scale in the gold mines. De Beers first experimented with the compound system by using convict labour. In 1885 the Inspector of Diamond Mines expressed his enthusiasm:

    "In these convict barracks the perfection of the compound system may be said to have been reached." (quoted in ibid. p.125) In the next years the compound system became the standard practice on all the diamond mines. On the diamond mines it was associated with some extremelydehumanising practices.

    "At the end of their contracts the black mineworkers were treated in very much the same way as prisoners although the actual practices varied between the mines. In some cases their clothes and boots were taken from them forexamination and they were kept naked in a building for about ten days during which time they were given carefully prepared food mixed with castor oil. Theywore the same fingerless leather gloves, padlocked at the elbows, for the whole time. In other cases the workers were padlocked for about four days in a room in the compound hospital where they were dosed with castor oil."(ibid. p.129)

    The compound regime, developed on the diamond mines, was quickly extended to the new industrial gold mines of the Rand.

    From the mine-bosses? perspective the compound system brought economies of scale through standardised mass feeding and housing of African workers. It established living standards at bare subsistence level, and the compounding of workers served to inhibit absenteeism and desertion. The fragmentation, isolation and concentration of African workers in prison-like compounds also greatly extended repressive control and helped to undermine worker organisation.

    The wealth that was accumulated out of this racist forced labour system on the mines in this period, often by corporations that still exist with the same names, was and remains the major source of capital, power and privilege of the South African private sector.

    3. Afrikaner capital and the National Party in power

    Most of the mining capital was concentrated in expatriate hands or in the hands of a tiny proportion of the white, English-speaking community in South Africa.

    The 1948 NP election victory opened up a new phase for emergent Afrikaner capital. Nine years earlier the first Ekonomiese Volkskongres had been convened. At the time, besides SANLAM, Volkskas and some local undertakings,there were few Afrikaner businesses in South Africa. The first kongres had focused on the mobilisation of farming capital, and on a general campaign of mobilising popular savings for reddings work - to address the "poor whiteproblem".

    In 1950 the second Ekonomiese Volkskongres was jointly convened by the FAK (Federasie van Afrikaanse Kultuurverenigings), the EI (Ekonomiese Instituut ofthe FAK), the RDB (the Reddingsdaadbond), and the AHI (Afrikaanse Handelsinstituut). A bare eleven years after the first kongres, the mood and agenda of this 1950 kongres had shifted considerably. Business-people haddisplaced the middle-class professionals who were the majority of delegates to the first kongres. "The people who have gathered here today are mainly from commerce and industry", noted Inspan (November, 1950). LJ du Plessis in his opening address declared that reddingswerk was now over as "the poor white problem no longer exists "Afrikaans capital has been consolidated" (ibid.).

    O?Meara, the pre-eminent historian of Afrikaner capital writes: "The great significance of the second Ekonomiese Volkskongres lay in its `official? legitimation of the profound shifts in the economic movement. In the 1940s, all Afrikaner undertakings had indignantly rejected any charge that they were `capitalist. After the second Ekonomiese Volkskongres it could be admitted thatAfrikaner undertakings were indeed capitalist, and dedicated first and foremost to the pursuit of profit." (O?Meara, Volkskapitalisme, Ravan Press, Johannesburg, 1983, p.249)

    The four-and-a-half decades of NP rule from 1948 are not reducible to a single set of social determinants. The struggle for the heart and soul of the NP, andfor the social and class hegemony of its policies was a prolonged and complicated struggle. However, from 1948 an emerged and emergent Afrikaans business sector had an influential role on the NP and its elaboration andimplementation of apartheid. Over the decades the influence of Afrikaans business-circles increased significantly, and, indeed, more and more thesecircles merged with the traditionally English-speaking corporations.

    From 1948 the NP created conditions for the rapid accumulation of capital by all capitalists sectors, but in particular, in the first decade it fostered therapid growth of Afrikaner capitalists. While the SACP welcomes the Afrikaans Handelsinstituut?s recent signs of a slightly greater historical self-consciousness, the claims that Afrikaans business "did not benefit from theapartheid regime" are laughable.

    Measures deployed by the new NP government to ensure the fostering of Afrikaner business included:

    • steps to improve the conditions of white commercial farming. The Marketing Act was again administered to ensure high, stable prices for farmers. The implementation and extension of influx control measures, a tightening up of pass laws and the gradual introduction of labour bureaux, all helped to ease the labour crisis in the white-owned commercial farming sector, dominated by Afrikaner capital.

    Under NP rule, Afrikaner finance houses flourished. NP-controlled local authority accounts were switched to these financial houses. The total depositsin the Volkskas Bank, for example, doubled between 1948 and 1952, and after ten years of nationalist rule had increased nearly five-fold (ibid. p.250)

    The NP awarded special government contracts to Afrikaans companies - like the contract awarded to Federale Mynbou to provide coal to the state steel company, Iscor.

    Afrikaner business-people were also appointed to a variety of state economic boards and to senior management positions in state industries. These positionswere used to foster the growth of the Afrikaner private sector. According to Wassenaar, then chairman of SANLAM, the state-owned Industrial Development Corporation was used by the NP government "to strengthen Afrikaner participation in the industrial progress of the country". The government, he added, "fostered the establishment of state-owned corporations as Afrikanerdom?s answer to thesomewhat overwhelming non-Afrikaner interests in mining and industry." (AD Wassenaar, Assault on Private Enterprise, Tafelberg, Cape Town, 1977, p.123)

    Massive Group Areas removals, forced many traders and other small businesses out of central business districts - their places being greedily taken by white businesses.

    In 1963, a key subsidiary of SANLAM, Federale Mynbou, with the assistance of Anglo-American Corporation, took control of a major mining finance house - the General Mining and Finance Corporation. Through the 1970s, with growing concentration of ownership in South Africa, and the emergence of several major corporations that dominated all sectors of the economy, the distinction between "Afrikaner" capital and "English" capital was blurred, and became increasingly irrelevant.

    At the political level, PW Botha?s accession to the presidency in 1979 and the elaboration of the Total Strategy policy, marked a deepening collaboration andcomplicity between the business sector in general (regardless of its historical, ethnic origins) and the apartheid state.

    The elaboration of formal apartheid by the NP on the one hand, and the accumulation of wealth in numerous companies that today occupy major roles in our country, were part and parcel of the same project. NP-apartheid rule has ended, formal apartheid no longer exists constitutionally, but the economic powers and privileges that this rule conferred on a small minority remain astriking feature of our society in the late 1990s.

    4. White-owned commercial farms

    The white commercial farming sector has, notoriously, been one of the most brutal sectors for black workers and their families. Historically, white farming has been based on colonial land dispossession. Black farm labourers and their families were subjected to semi-feudal employment conditions, particularly under the labour tenancy system. Corporal punishment was the order of the day, and there was widespread use of prison labour.

    What is sometimes not fully appreciated, is the degree to which all of the above features continued, and in some cases were intensified, in the final three decades of apartheid rule.

    Land dispossession in the decades after 1960 on behalf of white farming.

    The total area for agricultural production (including forestry), outside of the reserves/bantustans has remained constant over the past half century. However, white commercial farmers were able to increase their already grossly inequitable racial access to land through the dispossession of African- and mission-owned

    African-farmed land lying outside of the reserves in the three decades after 1960. Quite correctly, enlightened research on this process has focused on the plight of the some 610,000 people estimated to have been the direct victims of removals (this figure is for the period between 1960 and 1983 - see The Surplus People?s Project Reports, 1983, vols. 1-5).

    Less remarked upon has been the fact that much of this land was then transferred to white farmers. In 1978 the SA Agricultural Union estimated that agriculturalland transferred to white farmers amounted, at that stage, to some 106,303 hectares (cited in Marcus, Modernising Super-exploitation, restructuring SouthAfrican Agriculture, Zed Books, London, 1989, p.7).

    The "modernisation" of commercial farming and the perpetuation of a racial cheap labour dispensation

    Over the last four decades there has been an intensified process of ownership concentration and growing capitalisation on white-owned commercial farms. Thereis the assumption, in some quarters, that this "modernisation" of commercial farming has brought with it more enlightened labour practices. While there wereindividual as well as regional variations, the facts do not bear out the assumption of some linear progress towards general enlightenment.

    The growing capital intensification of agriculture resulted in the shedding of large numbers of farm-workers. Between 1960 and 1971 it has been estimated that about 500,000 African "full-time" farm-workers left the sector for employment in the towns and industry (ibid. p.32). Many of these were workers had lived fordecades with their families and herds on white-owned farms under the old, semi-feudal labour tenancy dispensation. This displacement of half a million workers was not resisted by the farm-owners, indeed, 'white farmers increasingly began to co-operate and participate in the state-drive to remove the growing numbers of Africans surplus to agrarian needs off the so-called `white plattleland? and into the reserves."(ibid.)

    However, white farm-owners were careful to ensure that social and political policies continued to sustain a sufficient supply of cheap black labour. Therewas an increasing casualisation, and feminisation of the agricultural labour force, along with the continued widespread use of child and convict labour.

    Over the past three and a half decades, the white commercial farms have tended to retain a much reduced "full-time" work-force, while relying on:

    Labourers evicted from white farms into the reserves. These labourers were treated as "casuals", although many were actually full-time labourers trucked infrom bantustans, sometimes on a daily or weekly basis. Hendrik Schoeman, at the time Minister of Agriculture, had sixteen citrus farms in the Eastern Transvaal,of the 1,800 workers on these farms, 80 percent were "casuals". According to the Minister?s son, Karel "seven lorries collected 700 casual workers - both women and children - and returned them to their villages (in the Lebowa bantustan) daily". (Anti-Slavery Society, Child Labour in South Africa, London, 1983);

    The intensification of extra-economic coercive measures directed against women living on white farms. The wives and daughters of African male farm-labourers had, under certain circumstances, been able to obtain paid work off the farm.

    In the 1960s through to the very recent past, and at least in some parts of the country, white farm-owners sought to intensify the captive position of Africanwomen on their farms. The following is an example from the Middelburg district (in the former Transvaal):

    "These farms are close to the Arnot mine and power station. Since there are huge living quarters for the whites employed there, women on the farms couldeasily get jobs as domestic servants. The farmer has explicitly forbidden this as he needs the women for hoeing and picking during harvest. Hence, these womenforfeit a cash income at a time when they are not needed for farm work" (Seleoane, ML, "Conditions on eight farms in the Middelburg, Eastern Transvaal", Paper No.29, SALDRU, 1984, p.18)

    "Every Bantu pupil, boys and girls, above the age of eight" - child labour on white farms

    The incessant drive of white farm-owners to find the cheapest and most coercible labour power led to the increasing exploitation of child labour. The attitudeof many white farm-owners to this practice was captured clearly by GJ Knobel MP (and farmer), who told Parliament:

    "my son (who runs the farm) came to me and told me he did not have enough labourers. Then I told him to go to the principal of the Bantu school - it was during the holidays - and ask him whether every Bantu pupil, boys and girls, above the age of eight could work for him on the land the next day. And sir, they did that work as well as any big, fat grown up Bantu woman could do it andthe work costs much less that way." (Hansard, vol 19, vol.198, cited in Marcus, 1989, p.111)

    We are not aware of precise overall figures on the numbers of children employed on white farms, but there are a few localised studies that provide some indication of the scale of the practice. A pilot study of extensive livestock farming in the Albany district found that, of the 615 "part-time" workers, 129 or 25 percent were 18 years or younger. In another study of grape farms in the Hex River Valley, it was estimated that no fewer than 51 percent of the seasonal workers who did not live on the farms were children of school-going age (both examples cited by Marcus, 1989, p.104).

    Farm Schools

    While the honourable GJ Knobel MP was able to boast in Parliament of recruiting, for a particular occasion, children from a local "Bantu" school, the use ofAfrican schools as a source of cheap child labour for white farms often assumed a more systematic and institutionalised form.

    Naturally, African families themselves were desperate to ensure whatever education possible for their children. It was around this real need that white farm-owners developed the farm school. Often presented as a great act of philanthropy, and as evidence of their "concern" for their black labourers, farms schools became a central component of the organisation and reproduction ofa cheap, child labour system.

    Farm-owners exploited the desperate need for education, by building schools on their farms to retain children in the farming areas. This patronage was thenexploited to the full:

    "whether farm workers? children are allowed to attend school or not, when farm or rural schools are allowed to operate, and indeed whether they are allowed to open at all, are all matters decided by the demands of the farmer. This does not only mean that school `holidays? are timed to coincide with seasonal peaks in the production cycle, but that the school day itself is organised around the demands made on child labour during the working day starting and finishing timesare adjusted to ensure that school does not interfere with the work children are expected to do before and after lessons. Moreover, the farmer can (and does)prevent them from attending school, or plucks them out of the classroom at any given moment. Thus whether drawing directly on the farm, or indirectly through the collectivised child labour pools that country schools provide, restructuring has intensified and expanded the exploitation of child labour in the blackworker family." (Marcus 1989, p.105-6)

    "Like having water on your farm" ? the Prison Labour System"

    Through the 20th century white farm-owners used the state extensively as a direct procurer and provider of labour through the prison system. In particular, the extension of the pass-law system, not only helped to tie workersdown to the land, but it also netted hundreds of thousands of technical offenders, many of whom found themselves as convict labourers on white farms.

    The use of prison labour was an integral part of commercial farming in South Africa, and was greatly valued by the farmers. "It?s like having water on yourFarm", one farmer once explained. (Marcus 1989, p.112)

    In 1976 the Theron Commission estimated that some 13 percent of farmers used prison labour (Theron 1976, para.141:7.18). Conservative estimates put the number of prisoners on the farms at any one time at 100,000.

    Press exposure of and public outrage at the brutal treatment of pass-law offenders on the potato farms of Bethal in the late 1950s led to some reforms inthe system, but not to its abolition. In the last three decades of apartheid, there were three basic institutions that channeled prisoners to white farms - aid centres, parole release and the lease system.

    Aid centres

    In response to the public outcry around forced prison labour on white farms, the Aid Centre scheme was introduced in 1964 under the Bantu Laws Amendment Act,which gave statutory authority to procedures that had previously taken place outside the law. The law empowered police to "admit" or "refer" sentenced pass-law offenders to Aid Centres, which then "placed" these prisoners in farm employment, or sent them to the reserves.

    In 1969, farmer agitation over labour shortages prompted the state to move more energetically on the establishment of these centres. By the end of 1973 at least 18 were in full operation in different parts of the country. They were shrouded in secrecy, like the rest of the penal system, and we do not have extensive information on them. However, the number of prisoners "placed in employment" through Aid Centres in 1975 was 21,636, and in 1979, 18,627 (ibid. p.112)

    Release on parole

    However, the principal channel by which farmers were supplied with prison labour was the "release on parole" system, formerly called the "9d-a-day scheme".Immediately upon being sentenced short-term "offenders" were "asked if they would rather serve their sentence in prison or be released on parole to work for a private person at market wages" (in the coy words of a criminologist, TM Corry, quoted in ibid. p.113).Virtually all the "private persons" were whitefarmers, and the "market wages" were 9d-a-day, until in 1980 the sum was raised to 45 cents! Even these paltry amounts were not paid directly to the prison labourers, but were held on their behalf by the farmer. No precise statistics are available on how many labourers were supplied to farms in this way, but the figure was certainly tens of thousands each year until 1986 - when the pass laws were abolished.

    The lease scheme

    The lease scheme was based on privately built farm jails. The system worked as follows:

    "these jails were put up by groups of farmers who came together and built a jail which was handed over, filled up and run by the Department of Prisons. The capital cost of building each jail was met by individual farmers who bought shares in the building and who then held `rights? to convict labour in proportion to their share holdings." (IDAF, 1980)

    Farmers involved in these schemes profited doubly. They were assured of an exceedingly cheap supply of labour most of the prisoners were serving sentences of two or more years. But the share in the farm jail was also aninvestment asset, thus in the mid-1960s Western Cape farms, where this practice was widespread, appreciated in value by at least R1,000 per convict. In the early 1970s a prison share bought for R2,000 sold for R4,000 (ibid.)

    6. The role of business in the last decades of apartheid rule

    Business self-interest as the "cutting-edge" of change?

    The most frequently invoked argument, used by leading South African business-people to justify their collaboration with or passivity in the face of theapartheid system was that economic growth would, by itself, erode apartheid.

    This argument was used to oppose any political and economic strategies designed to put real pressure on the apartheid regime.

    Thus Jan Steyn, founding executive director of The Urban Foundation, a business established formation, argued in an address to German business-people in Frankfurt in September 1988 that"sanctions are limiting the ability of the economy to do what it has done in the past - to force the pace of change; to create needs for adjustment which the government has to recognise Change is most easily accepted not when it is forced on one, but when it emerges from the needs within one?s own society, as it has in the past. Economic prosperity reduces uncertainty and fears, promotes social harmony and makes changes easier to accept." (in Steyn, Managing Change in South Africa, Tafelberg, Cape Town, 1990, p.30).

    While business lobby groups like The Urban Foundation and The SA Foundation propagated the idea that economic growth would cause apartheid to wither away ofits own accord, the facts do not bear this out at all. The apartheid economy boomed in the decade of the 1960s, a period during which South Africa?s rate ofGDP growth was second only to Japan?s. But black wages did not rise to reflect this reality. Between 1957 and 1967, the percentage increase in average wagesfor Africans was less than that for whites, indicating that the apartheid wealth gap actually widened. According to the research findings of Dr Francis Wilson,the African real wages on the gold mines were no higher in 1966 than they had been in 1911. Wilson also found that the white-to-black wage ratio, which was roughly 12:1 in 1911, had widened to around 18:1 in 1966 (see K Asmal, L Asmal and RS Roberts, Reconciliation through Truth, David Philip, Cape Town, 1996, p.156).

    Business opposition to basic democratic rights for all South Africans Despite the business community?s present retrospective claims to having been at the cutting-edge of democratic change in our country, the historic record tells a very different story. In the first place, the majority of leading business personalities were not in favour full political rights for the black majority.

    According to his approved biographer, Anglo American magnate Harry Oppenheimer "never subscribed to the view that apartheid was morally wrong. In his view itwas at root an honest attempt to cope with overwhelming racial problems." (A Hocking, Oppenheimer and Son)

    Gavin Relly, Oppenheimer?s successor at Anglo American, pronounced himself "not in favour of one-man, one-vote in South Africa", because that "would simply be a formula for unadulterated chaos at this point in time in our history." (quoted in S Kanfer, The Last Empire: De Beers, Diamonds and the World, p.347)

    Anton Rupert agreed: "After many African countries became free they got dictators like [Idi] Amin?s. We have to find a solution that won?t end up giving us one man one vote." (quoted in D O?Meara, Forty Lost Years, p.187)

    It is important to appreciate that these were not merely the private prejudices of wealthy individuals. The business community organised itself into powerful and well-resourced lobby groups like the SA Foundation, in order to project a "better image" of apartheid South Africa, and to stave off the "evil day" of majority rule.

    "Stemming the tide of misrepresentation against the Republic" - the SA Foundation

    Formed in the 1960s, as an international mouthpiece of South African business, the SA Foundation included in its membership lists most of the key business leaders in South Africa, among them Harry Oppenheimer, Anton Rupert and Charles Engelhard. The SA Foundation liked to present itself as a-political. But it had a distinct political agenda. In a paid advertisement in the Sunday Times of 14 May 1967, its director LB Gerber, urged privileged South Africans to stop apologising for apartheid and instead "substitute a tone of confident self-assertion" which would publicise "the opportunities" that apartheid South Africa offered to international investors (emphasis in the original). By 1971, theFoundation was boasting that its propaganda efforts had helped to "stem the tide of ignorance, criticism and misrepresentation against the Republic". (quoted in A Sampson, Black and Gold, London, Hodder and Stoughton, p.90)

    Despite its professed a-political stance, the SA Foundation played, in practice, a consistently apologetic role for the apartheid state. In 1975, for instance,it argued that "the pace of advance in abolishing discrimination cannot bespeeded beyond what the politicians can get their followers to accept." (Cape Times, 14 March 1975).

    Playing it both ways - massive disinvestment and sanctions busting

    The Commonwealth Committee of Foreign Ministers on Southern Africa reported in1989 that: "South African companies are betting on both sides-they are creating sanctions-busting channels to prop up the regime while removing from South Africa as much money as they can in case the edifice of the apartheid state collapses." (South Africa: The Sanctions Report, Penguin, London, 1989, p.90)

    In the course of the 1980s, the wealth generated inside South Africa, as a result of the super-exploitation of the majority, was increasingly disinvested out of the country. In 1986, for instance, major South African corporations invested more that US$5 billion in Europe and US$ 4 billion in North and South America (ibid.).

    Far from using accumulated wealth to catalyse a major socio-economic transformation, to which they professed to be committed, the major South African corporations were doing their best to transfer as much wealth as possible off-shore. Not only did all the major corporations set up or operate through major off-shore holding companies, but they used these to defraud our country of evenmore wealth. The practice of transfer pricing to move money out of South Africa became widespread. This is the practice where, for instance, a foreign firm overcharges its South African parent company for goods or services supplied. One estimate in 1988 was that this practice was costing South Africa "billions of rand" every year (Star, 24 August 1988).

    The Private Sector and the Apartheid War Machine

    Most of the major private sector corporations in South Africa benefited enormously from the growing militarisation of our country through the 1970s and1980s. Indeed, the collaboration of the private sector in the burgeoning apartheid war machine was institutionalised through a variety of structures.

    In 1973 a Defence Advisory Council was established to deal with armaments production. The Council included representatives from Anglo American, Barlow Rand, Tongaat and SA Breweries.

    With the rise to power of PW Botha in 1979, "total strategy" became the overarching state approach. One of the first priorities of the Botha government was to win private sector support for "total strategy". The Carlton Conference held in 1979 in Johannesburg was intended to be a catalyst for this process. Key personalities in the business sector were flattered by the attention. HarryOppenheimer declared the Carlton Conference the start of a "new era". Other business leaders spoke of the new-found "rationality" of the National Party. The prestigious business journal, the Financial Mail, awarded PW Botha its "Man of the Year" accolade (November 30, 1979).

    However, the NP government did not confine itself to fostering a good climate of mutual understanding between the regime and government. The relationshipbetween business and the apartheid security apparatus was institutionalised through a whole web of structures and business ventures.


    Writing in 1989, academic researcher Graeme Simpson observed that: "Armscor, and the armaments industry in general, present one of the central points of interface between the security establishment and the business community in South Africa." ("The politics and economics of the armaments industry in SA", in War and Society. The militarisation of South Africa, David Philip, Cape Town,p.217).

    In 1968 Armscor was established as a fully-fledged state enterprise. In 1977, the year that the UN Security Council imposed a mandatory arms embargo on Southfrica, the powers of Armscor were greatly increased, and it operated under the autonomous control of the Ministry of Defence.

    Armscor developed extensive links with a vast number of local private sector companies. Because of the secrecy of these operations, not all the facts are publicly known. In 1987 Armscor?s chief executive referred to 975 companies directly supplying Armscor (Business Day, 21 September 1987). This implied a much larger number of sub-contractors. One researcher suggested that in 1983Armscor was distributing work to some 1 200 private contractors and sub-contractors, and that at least 400 companies were dependent for their survival on Armscor contracts (Radcliffe, as cited by Simpson, ibid. p.223).In 1988 another researcher estimated that the number of private sector sub-contractors to Armscor had grown to 3000 (Grundy, as cited in ibid.).

    Whatever the precise figures, it is clear that hundreds, and probably thousands, of South African private sector companies made the moral decision to collaborate actively with the apartheid war machine. No doubt this "moral" decision was made all the more easy because these were contracts in which cost effectiveness was not of major importance. Billions of rands of tax-payers? money, mostly routed through secret Special Defence Accounts, were poured into developing the arms industry. The apartheid security forces provided an assured market, and in return for confidentiality, private companies were not subjected to competition. Huge private profits were generated as a consequence.

    Indeed, the levels of parasitism of these private sector corporations went even further than this. As Simpson noted: "It appears as if local corporations, rather than producing and upgrading armaments technology, are acting as conduits through which this technology is smuggled into the country via links with multinational corporations." (Simpson, p.225)

    A clear example of this kind of parasitism is provided by the case of Barlow Rand, at the time Armscor?s leading local industrial supplier.

    Barlow Rand

    By the end of the 1980s, Barlow Rand was the biggest industrial corporation in South Africa. Through its chairperson, AM Rosholt, the company presented itselfas an enligthened opponent of apartheid. Rosholtregularly expounded upon the role of business in bringing about enlightened change in South Africa. However,Barlow Rand had an extensive and extended history of collaboration with the apartheid war machine.

    When in 1973, as Minister of Defence, PW Botha established a Defence Advisory Council, it was not immediately clear why CS ("Punch") Barlow was among thebusiness personalities invited to serve on the new body. It was only later that it became publicly known that from 1965 Barlows Electronics Ltd had secretlybecome one of the two chief electronics suppliers to the SADF (Rand Daily Mail, 21 February 1975). This included a contract to supply the army with locally assembled Thomson-CSF radios from France.

    In 1977 Barlow Rand bought the CJ Fuchs group, best known in South Africa as a manufacturer of household appliances, this opened up access to military applicable electronics technology and compents. Soon thereafter it bought a 50 percent stake in the British-owned giant, General Electric Company (South Africa). Included in this deal was Marconi South Africa, a major supplier ofradar and communications equipment to the SADF. All of these deals enabled the overseas companies to take pressure off themselves in terms of the UN mandatoryarms sanctions, while enabling the apartheid regime to have continued access to high tech products, under the guise of their being "locally produced".

    By the end of 1980s, Barlows employed about 4 000 people in its electronics division, with a turnover of some R120 million. 1980 also saw it launch intothe computer sector by buying a 51 percent stake in Perseus, local agent of the US giant, Data General.

    The head of Barlows electronics division during this period was Johan Maree. In 1979, Maree was seconded by Barlows for three years to serve as the Armscorchief executive.

    In 1980, when the old Defence Advisory Council was replaced by an enlarged Defence Advisory Board, 13 of the biggest names in South African industry were appointed. No fewer than three members of the Barlows board were included - among them AM Rosholt, at the time Barlows new chief executive.

    The National Security Management System

    The hundreds, if not thousands, of South African private companies linked to the Armscor network were not the only private sector companies involved directly inthe growing militarisation of South African society. Many business-people were active participants in the National Security Management System (NSMS), which wasone of the key institutional expressions of PW Botha?s Total Strategy approach. Under the Total Strategy approach, South Africa?s military strategists ncreasingly projected themselves as defenders of "free enterprise", asserting that "military strength is inseparable from economic strength" (General Magnus Malan, quoted in Grundy, 1986, p.67). This was closely connected to the Total Strategy philosophy that the war in South Africa was only 20 percent military, and 80 percent social, economic and political.

    The NSMS structures sought to build "moderate" social buffer forces in certain strategic township (they were called "oilspot" townships), around housingdevelopment. As Major-General Wandrag, head of counter-insurgency in the SAP, explained: "The only way to render the enemy powerless is to nip revolution inthe bud, by ensuring that there is no fertile soil in which the seeds of revolution can germinate" (ISSUP Review, October 1985, p.15).

    Lacking sufficient resources for this kind of programme, the security forces needed to draw in the private sector, and many business-people were, for a time, happy to be involved in lucrative projects with or without regard to the wider security agenda.

    It was particularly at the local level structure of the NSMS - the Joint Management Committees (JMCs) - that individual business-people and their companies were active.

    The Port Elizabeth community liaison forum, working under the Port Elizabeth mini-JMC, provides some idea of the functioning of the system. There were 27 members on the forum from the private sector, including the Master Builders? Association, Assocom, the Midland Chamber of Industries, the Port Elizabeth Chamber of Commerce, the Small Business Development Corporation, the AfrikaanseSakekamer and the NGK.

    In the Memorandum on Formation of Liaison Forum issued by the Port Elizabeth mini-JMC, the main objective of the forum is said to be: "To assist in restoringand maintaining peace and normality amongst all the people within the district of Port Elizabeth". Other key objectives include: "To create understanding andco-operation, through communication between the authorities and the privatesector", and "To act as a direct link between the private sector and the authorities to ensure effective action."

    The major decision of the Forum appears to have been the construction of a "major sports centre at Kwadwesi - a new prestige neighbourhood." The focus on a"prestige" black neighbourhood, in a city wracked with high levels of unemployment and poverty, was typical of the NSMS orientation.

    The Defence Manpower Liaison Committee (Demalcom) and Conscription

    Until 1982 the SADF and the business sector discussed strategic issues around "manpower utilisation" in the Defence Advisory Council. This body was then replaced by the Defence Manpower Liaison Committee, whose task was to "promote communication and mutual understanding between the SADF and Commerce and Industry with regard to a common source of Manpower" (1982 Defence White Paper).

    In January 1984, Paratus disclosed that the Demalcom was planning the massive increase in conscription proposed in the Defence Amendment Act of 1982. This included drawing up of guidelines for employers of national servicemen, toencourage employers to make up the difference between company salaries and national servicemen?s pay. One researcher, writing in 1988, estimated that "most private companies currently do this, and one-fifth continue to pay full salaries" - even though there was no legal obligation to do this. (Philip, "The private sector and the security establishment", p. 211).

    The Johannesburg Demalcom had representatives from the SADF?s Wits Command, the Randburg Commando, the Johannesburg City Council, the Randburg Town Council andChamber of Commerce, the Transvaal Chamber of Industries, the Security Association of South Africa, the Engineers? Association of South Africa, the Institute of Bankers, the Anglo American Corporation, and others (Business Day,16 July 1987).

    The Johannesburg Demalcom was originally based at Wits Command, but then shifted to the Assocom offices, after it was decided that it needed a "more civilian" facade. The chair of this Demalcom, Colonel Chris du Toit, told a researcher in 1988 of a unique way in which the private sector was able to collaborate with the SADF?s plan to "win hearts and minds" in township "development" projects:

    "The business sector is in the know of people that are unemployed or redundant, and the SADF may have jobs for such people in the development side of things - such as in Alex township 'then the army would call up an engineer [who was redundant for instance], and say to him ?You are going to work in Alex for such-and-such a company.? I?m not going to say a name. Then the army would use histechnical skill in this way'These guys don?t wear uniforms, they just work in the company, and they are credited with their call-ups." (Philip, p.212)

    National Key Points ? private armies and the privatisation of repression

    The National Key Points Act of 1980 created another network of collaboration between the apartheid security forces and the private sector. In terms of theAct, the National Key Points Committee in any region could designate a factory as a "national key point", and in so doing it could then determine the minimum security standard required on site.

    The management at a factory so designated was required to meet certain security requirements at its own expense. There was some initial opposition, but it wasreported soon after the implementation of the Act that management at 85 percent of 633 national key points was cooperating fully.

    The effect of this legislation was:
    to shift some of the financial burden and responsibility for "national' security on to the private sector, releasing apartheid security forces for otheractivities; and as the Financial Mail pointed out, it created a "multi-million rand bonanza" forthe private sector industry. By 1983, the private security industry had an annual turnover of R1 000 million, and comprised over 500 companies (Philip,p.213)

    Mine security ? the compound system lives on 

    A special case of private sector financed and controlled repression was to be provided by the mining corporations, with their extensive compound experience. 

    At Gold Fields, mine security had its own armoury of 6 000 shotguns; the company had patented its own rubber bullet, and it ran a mine-security training campwhere security personnel from other mining houses could also be trained (ibid. p.214)

    Private mining house security had equipment that closely resembled that of the police - including guns, pistols, tear-gas, and even armoured personnel carriers(Hippos).

    The following is a mine-worker?s personal description of how Anglo?s Western Deep security broke the workers? 1987 strike. It began when six white Hippos arrived from another mine and stationed themselves at the gates. Management assured the shaft committees that there was no cause for alarm, and so workers who had gathered at the gates, returned to a report-back meeting.

    "As we turned back those boers rammed the gate with the Hippos, broke it open, and rode into the hostel"They told us [over their loudspeakers] to go to our rooms, and then they just started to attack us with their dangerous weapons, shooting at us, without even giving us five minutes using teargas, rubber bullets, and pistols with proper bullets. When we were in our rooms, theyturned off the water, and they stopped food from coming in.

    "At nine o?clock that night, they told us to come out, we are going to work now. They shot teargas into the rooms, and chased us out with batons, and forced usto stand in a line. Then they forced us into the lifts at gunpoint, and we were faced with no choice but to go underground, all the shifts at once, and also thesurface workers, forced down underground at gunpoint." (quoted in Philip, p.215)

    While the regime was maintaining a general state of emergency in our country, the mining houses declared their own, in-house state emergency in this period.A 1988 National Union of Mineworkers report on repression at Anglo American mines found that on many mines, roadblocks were enforced at entrances, union meetings were banned on mine property, or, where allowed, video-taped and the agendas had to have prior approval of management.

    The mining houses also maintained an extensive "third force" network - which included the use of paid informers, and the deliberate fomenting of inter-ethnicviolence to undermine trade union organisational unity.

    Repressive-reform in the late 1970s and through the 1980s - trying to pre-empt "the trauma of one-man-one-vote" 

    The attitude of a sizeable part of the business community to the apartheid-led "reform" process in South Africa is well illustrated by a 1985 statement by Sir Michael Edwardes, former chairperson of British Leyland and subsequently head of the Anglo American Corporation off-shore operation, Minorco. South Africa, Edwardes said, could regain international acceptability:

    "by sensible representation but without the trauma of one-man one vote Before the issue becomes one of a choice between isolation and total franchise, and nothing less, for God?s sake get discrimination of all sorts and varieties out of the system totally, for all to see." (Financial Mail, Johannesburg, 29 November 1985)

    Edwardes is calling for the scrapping of petty apartheid discrimination "for all to see" in order to pre-empt the "trauma" of "total franchise", that is basic democratic rights. 

    So that "they do not feel anxious about political power"

    The "reforms" that leading elements of the business community supported in South Africa in the 1980s were not about dismantling white minority rule. They wereeither:

    reforms that were perceived as being necessary from the perspective of business?s profit-seeking interests (see Harry Oppenheimer?s statement:

    "Nationalist policies have made it impossible to make proper use of black labour", - quoted in a survey of prominent business-people, "Business and Reform", Financial Mail, 6th September 1985); or

    reforms that were, very self-consciously and cynically, designed to pre-empt the ending of minority rule.

    Fred du Plessis, a leading adviser to President PW Botha and, at the time, chairperson of SANLAM, talked in 1988 of the need for delivering economic benefits to key sectors of the black community, to take the pressure off the mobilisation for political change. He envisaged "a situation where people ten years from now feel things are going so much better for them that they do notfeel anxious about political power." ("South African Alert", Business International, London, March 1988).

    Jan Steyn, first executive director of The Urban Foundation - established by leading business-people in the immediate aftermath of the Soweto Studentuprisings - speaks of a similar agenda underlying the social projects of the Foundation: "we dare not leave it to the political processes only. We cannot place representatives of the disadvantaged communities in a position in which they feel obliged to challenge the interests of advantaged South Africans to seek redress". (Steyn, Managing Change in South Africa, with a foreword by HF Oppenheimer, Tafelberg, Cape Town, 1990, p.101). Reform is about depoliticising and diverting the aspirations of the majority, or at least of the majority?s "representatives:" (see also ibid. p.80).

    Precisely because the reforms were designed to pre-empt substantial politicaltransformation, the reform process of the late 1970s and 1980s was not separatefrom, it was part of an intensified process of political repression. Thisrepressive-reform agenda was well understood by key elements of business inSouth Africa, and it was publicly endorsed by them.

    "Though regrettable, necessary" - business support for intensified repression in the 1980s 

    Many in the business community gave open support to government?s increasingly heavy-handed repression in the course of the 1980s. The large-scale SADF occupation of townships in 1984 was defended by the Financial Mail, forinstance. It reassured its readership that "No-one except the ANC is demanding political rights tomorrow."(12 October, 1984)

    However, business support for the apartheid government began to waver in 1985. The popular mobilisation appeared not to be subsiding. More seriously from thebusiness point of view, a looming debt repayment crisis provoked a serious economic downturn. In these circumstances, business circles voiced growingconcern about the slowness of the reform process. 1985 was the year in which a business delegation first visited the ANC in Lusaka. However, with the debt crisis temporarily averted to 1990, with foreign banks agreeing to rescheduling, and with the thousands of emergency detentions quelling mass mobilisation for a while, leading business voices backed the apartheid government once more.

    Gavin Relly in his 1987 Anglo American Chairman?s Annual Statement said: "The imposition of the State of Emergency last year, and its recent renewal, though regrettable, were necessary." (widely published as an advertisement inmany newspapers, example Independent, London, 14 July 1987)

    Trust Bank, in its otherwise generally depressed review of the economy in October 1988 said:

    "The 60 percent increase in South Africa?s security expenditure over the past two years was clearly essential in the circumstances. In fact, the damper put on socio-political instability by the security forces has definitely played a role in the recently improved performance of the economy."

    In March 1988 the Financial Mail concurred with these sentiments:"Business confidence, that fragile reed, will probably be bolstered by government?s latest crackdown on black dissent."

    Far from economic improvements coinciding with growing pressure on the apartheid regime, the exact opposite was the case. Tony Bloom former chairperson of Premier Milling, and one of the business delegation that met theANC in Lusaka in 1985, was perfectly candid about this in January 1988:

    "I don?t think it?s a coincidence that the business community became most vocal when the economy was in the worst recession for fifteen years, profits were declining and South African businessmen were shunned in the capitals of the world. At the time of the Lusaka trip there was more of a feeling of urgency" [now three years later] "there?s a lull because we?re back into aneconomic upswing and a lot people have gone back to just running businesses" It took a crisis to evoke their conscience." (Weekly Mail, 29 January 1988).

    "The TRC is just a joke" - business in the post-April 1994 period 

    With the unbanning of the ANC, SACP and PAC in February 1990 and the beginning of multi-party negotiations, political initiative shifted to the politicalparties. Generally, business circles supported the negotiations process.

    We acknowledge the role that a number of leading business-people played in the National Peace Accord initiative. In particular, John Hall, Chairperson of theNational Peace Committee, who was seconded ironically from military equipment manufacturer Barlow Rand, played a key role in the peace process.

    Since the democratic breakthrough of April 1994, the business community has generally expressed positive sentiments about the new democratic dispensation,while seeking, naturally, to extend its own profit-seeking agenda, and to safeguard as much of its historically accumulated powers and privileges.

    However, with rare exceptions, leading business-people, the major corporations and the key private sector organisations, have singularly failed to own up totheir decades of complicity in racial oppression. There is very little self-reflectiveness in evidence. Now that we have "the trauma of one-man-one-vote"and the worst fears of the business community have not materialised, there is little sign of good grace.

    Instead, business-person after business-person tells us to "bury the past unconditionally" (in the words of Joggie Heuser, CEO of Soekor, Martin Creamer?sEngineering News). In many parts of the business sector there is even jocularity in the face of the tragic human stories being recounted within the current TRC processes. We believe that the following item, which is meant to be a joke, is not untypical of the arrogance that prevails in some of these circles today:

    "Scheduled SABC2 coverage of the Truth Commission was dropped on Sunday and replaced with a programme called Circus on TV. Did anyone notice the difference?"(Financial Mail, June 14, 1996, in its back-page, "humorous" column, "Did You Hear")

    The business sector cannot be allowed to abuse its present laundered wealth, powers and privileges to further disseminate the notion that, at worst, itfailed to speak up against apartheid, which was a system that "was really against its own interests". The business sector was not a silent passenger in the vast and sustained racial oppression of the majority of South Africans. The business sector helped, actively, to shape racial oppression, it pleaded with racist governments to introduce and to intensify many measures that grosslyviolated the human rights and dignity of black people. The business sector participated in the militarisation of our society and it supported the Total Strategy and the states of emergency.

    The present TRC process must help our country to remember the active complicity of those who, because they harvested the fruits of apartheid, remain wealthy,privileged and powerful in our new democracy.

    Hamba Kahle, comrade Lizo Che Nobanda

    On the night of 13th November the SACP's highly talented and youthful Western Cape organiser, Lizo "Che" Nobanda, was tragically killed in a car accident, while returning to Cape Town from a party activity in Mossel Bay. 

    A few weeks before his death, comrade Lizo addressed the following e-mail message and poem to the SACP Head Office. The poem and message capture many things about this outstanding young Party cadre - his feistiness, his political commitment, his roots and his hopes.

    We publish, in full, and in memory of this young Communist his message and poem. 

    Dear Comrade Emmanuel,

    I haven't seen you people for quite a long time.
    You don't even phone to say - how is life in this Volkstaat?
    I didn't expect that from you.

    What about a poem, chief?

    Who am I? (to receive a call from you?)

    I am the child of Africa,

    a child of the universe.

    The son of a working class family.

    Humanity has failed me.

    Baptised me,

    a child of the streets.

    I am the ground you walk on.

    I feed on your waste.

    I am a disease to your children.

    I am a beggar for freedom,

    the recipient of slavery.

    I am the roots of the nation,

    you've stunted my growth.

    I am worth saving,

    you don't have time.

    I am the epitome of innocence,

    purer than summer rain.

    I am the greatest soldier,

    the child of Che,

    the toughest survivor,

    of capitalism's contentiously

    cruel world.

    Long Live The Spirit of the Great October Revolution.