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Umsebenzi Online

Volume 8, No. 21, 25 November 2009

In this Issue:

Red Alert

Nationalisation of the Mines... let's try that again

Jeremy Cronin

Well…it's not easy these days to have a robust but comradely discussion. The Sowetan of November 20 demonstrated this point graphically. On page four of last Friday's edition of the paper a brief single column story was head-lined "Cronin backs Malema". This story correctly quotes me agreeing with cde Malema that the Freedom Charter, in calling for the "wealth to be shared", was effectively demanding nationalisation as one important means for achieving this objective.

But turn the page of the very same issue of the Sowetan and there you will find a five-column story head-lined "You're no messiah - Malema attacks Cronin over nationalisation".  Both stories are referring to exactly the same original intervention that I made in last week's Umsebenzi On-Line!

I don't blame the journalists involved. (But what were the senior editorial staff smoking on the Thursday night the edition went to the printers?)  The confusion in the Sowetan reflects cde Malema's own misunderstanding of what I and many other alliance comrades have been trying to argue on the question of the nationalisation of the mines.

I have no interest in cde Malema's personalised diatribes. They only serve to distract from what are important positive and constructive points that the ANCYL collective, at least, has been making on the topic of nationalisation. Let's rather focus on what I take to be the substantive matters that cde Malema imagines he is raising in his response to me.

Nationalisation vs. socialisation?

"Cde Jeremy Cronin", he writes, "takes issue with the fact that the ANCYL has called for the nationalisation of mines, instead of socialisation". He then quotes from SACP resolutions that call for the re-nationalisation of SASOL, for instance.

But I never said the SACP is opposed to, or doesn't ever use the word "nationalisation". What I did say is that fascist, apartheid and progressive states have all implemented nationalisation programmes. Even neo-liberal states have recently implemented massive "nationalisation" programmes. George W Bush jnr, for instance, took over the giant US mortgage companies Fannie Mae and Freddie Mac to the tune of $5.4 trillion dollars. This is a national debt with which ordinary US citizens will now be saddled for generations to come.

When we call for nationalisation we need to spell out what KIND of nationalisation we have in mind. We should closely examine whose CLASS interests nationalisation in any particular case serves. And that is why I think it is always useful to link nationalisation to socialisation. 

The ANCYL's important July 15 framework document "ANCYL's Position on the Nationalisation of Mines" (which, I admit, I had not properly re-read before writing last week) makes the same basic point in different words: "Nationalisation is not a panacea for SA's developmental challenges, but it should in the manner we are proposing it, entail democratising the commanding heights of the economy, to ensure they are not just legally owned by the state, but that they are thoroughly democratised and controlled by the people."

I think that makes the point more clearly than I did. No disagreement.

Is the Freedom Charter calling for nationalisation?

In my original intervention, I spent some time AGREEING with cde Malema and the ANCYL on this point. Although the Charter doesn't literally use the word "nationalisation", it is patently obvious to anyone who knows the mid-1950s context in which it was adopted that the relevant clause had in mind that the mines, banks and other monopoly industries should be nationalised.

Drawing from the ANCYL framework document, cde Malema quotes both President Albert Luthuli (in 1956) and President OR Tambo (in 1969) making this fact absolutely clear. They are wonderful quotations from great leaders, and we should thank the ANCYL for reminding us of them.

Again, no disagreement.

Mineral beneficiation

It is here that I made my own misstep. I was trying to introduce a touch of polemical spice into what can sometimes be a dry topic. I suggested, more in jest than seriously, that cde Malema possibly thought of beneficiation largely in terms of bling. It was a silly comment, and I apologise. I had not realised that cde Malema had such a delicate skin.

But, again, let's not allow polemical flourishes (in this case my own) to obscure substantive issues. Cde Malema correctly asserts that: "Mining as a critical component of the South African economy should necessarily be used to expand and industrialise the South African economy in a more developmental [way], instead [of] a parasitic mechanism pursued by the current owners of mining activities in SA."

I agree. I also agree that the majority of our mineral production continues to be exported largely unprocessed and that this reproduces our semi-colonial economic status in the world economy. It also costs SA many potential jobs.

So where, then, if at all, do we actually begin to part ways?

Whose class interests?

When I briefly described the seriously problematic features of the actual beneficiation that occurs currently with Eskom, Sasol, Arcelor Mittal and aluminium smelters, I WASN'T saying "we have already got beneficiation, so let's not worry about more beneficiation."  I was making an entirely different point. It is a point that cde Malema seems, for whatever reason, not to want to grasp.

The SACP firmly supports the principle and objectives of broad based black economic empowerment. In fact, it was the Communist Party in 1929 that first pioneered the strategic perspective of black majority empowerment in SA. But the moment you disconnect a class analysis from a national (or, if you like, "race") analysis, then BEE inevitably starts to lose its broad-based Charterist character. If you disconnect a class analysis from a race analysis you run the danger of wittingly or unwittingly serving the interests of monopoly capital in SA and its comprador and parasitic allies - many of whom have been close to, or actually within our movement.

Take the case of the "Mineral and Petroleum Resources Development Act" (2002). During the parliamentary hearings on the Bill, COSATU and other progressive forces argued that commitment to downstream beneficiation should be made a mandatory requirement for any 30-year mining licence. However, the Department of Minerals and Energy and its then minister, Phumzile Mlambo-Ngcuka, resisted this amendment. Many comrades had the distinct impression that key ministerial advisers (some of them now in COPE) were keen to use the legislation as leverage to force mining conglomerates to provide a slice of action to aspirant black share-holders. But they were less keen to "burden" the profit-maximising aspirations of incumbent mining corporations and their future partners with responsibilities for beneficiation.

As a result, the present Act is weak when it comes to requiring beneficiation. We now have a sad irony. The Chinese, for instance, are willing and keen to invest in manganese beneficiation manufacturing plants here in SA. But this possibility is compromised by the fact that many of our manganese deposits have been leased out for 30 years to the same old established mining conglomerates and their new "patriotic" bourgeois hangers-on.

This example raises a number of related issues. For instance, would a legislative amendment to the Act not be a more effective (and affordable) way to leverage developmental beneficiation, at least for any new licences? This is a practical question, not a desperate attempt to avoid nationalisation at any cost.

There are many other job-creating, down-stream possibilities where the use of democratic state power to leverage transformation out of the mining sector should be considered. For instance, some genuinely patriotic emerging black entrepreneurs have been asking me why we do not impose national shipping quotas on the mine monopoly sector. More than 90% by volume of all of our exports (mostly minerals) are by sea. Yet all of the shipping involved is foreign-owned, the crews are overwhelming non-South African, and the shipping lines pay taxes in other countries. SA's once relatively significant maritime sector is now down to one single registered ship. Meanwhile, the rest of our logistics network (roads, freight rail and ports) still dedicates billions of rands of public money to lowering the cost to doing business for the mining conglomerates and their new allies.

None of this means that we should simply rule out the question of nationalising the mines. And the SACP has never ruled this out. But it does mean that you don't necessarily need to nationalise mining operations to achieve major immediate transformational objectives. 

The ANCYL's framework discussion document does a good job in defending the broad principles of the Freedom Charter against all kinds of reformist back-sliding. It does a good job of defending the principled right of a democratic state to nationalise the commanding heights of the economy to advance democratisation. But it remains vague when it comes to the actual detail of what mines should be nationalised, and how they should be nationalised. It doesn't address itself to the question of whether nationalisation would be the most strategic and sustainable use of massive public resources at this point in time.

Above all, the ANCYL's document is not able to allay suspicions about whose class interests would (perhaps unwittingly) be served by nationalising mines in the midst of the current recession.

As the still exploratory shipping example above should illustrate, the SACP has never argued that there cannot be shared, multi-class points of strategic patriotic convergence. Multi-class alliances are exactly what a national democratic revolution is about. But the possibility of convergence does not mean that each and every promotion of black-owned capital always advances national liberation. Such promotion (or bailing out) might result, in specific cases, in substantial broad based black economic DIS-empowerment.

The SACP certainly wants to pursue the discussion around the ownership and control of the economy with the ANCYL and with the rest of our alliance. Hopefully cde Malema in his busy schedule will find time to be part of this discussion some time before June next year.



In defense of Cronin

Kimani Ndungu1

"The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole" (The Freedom Charter, 1955).

Whose interpretation is it anyway?

It seems to me that the current vitriolic response by cde Julius Malema to cde Jeremy Cronin's arguments on the question of nationalizing mines (Should we nationalize mines? Umsebenzi Online, vol. 8 No. 20, 18 November 2009) is hinged on a rudimentary, static and dogmatic interpretation of the Freedom Charter.

According to cde Malema, cde Cronin's arguments which call for the socialization rather than the nationalization of mines, and his challenge to him and the ANC Youth League to make "a serious attempt at a collective policy document on this matter" are 'openly reactionary', 'anti-development' 'counter progress' in line with 'rightwing newspapers and their attendant analysts', 'centered on protecting and defending existing property relations' and besmirch of 'intellectual superiority'.  Malema winds off by declaring Cronin 'a fake-left force' and a 'white political messiah'. Quite a mouthful, indeed!

But absent the individualized attack on Cronin which is unfortunate, what precisely is their difference in argument? Is Malema's nationalization call a faithful interpretation of the Freedom Charter, or is Cronin a selective analyst who hides behind context and conjuncture to justify his position? To borrow from a popular phrase, are these two senior leaders of our Alliance reading from the same hymn sheet?

Theoretical confusion

Like the Freedom Charter, cde Malema's, and the ANC Youth League's postulations on nationalization are unfortunately not the epitome of clarity. There is a fundamental dissonance between cde Malema's and the League's theorisation of nationalization and how this thinking is to be translated into practice.

In the Conceptual Document entitled: "ANC YL's Position on the Nationalisation of Mines", the League seems uncertain about how precisely nationalization is to be effected. On the one hand, the League calls for the state to "own, control, extract, process, beneficiate and trade mineral wealth on behalf of the people", but then quickly cautions us that nationalization, "is not a panacea for South Africa's developmental challenges". However, the Conceptual Document goes on to reassure us that if mines are nationalized in the manner the League suggests, it will be possible to place the mineral wealth of the country "in the hands of the people and that the people will benefit from such wealth". Fair enough. What is this suggestion?

According to the Document, effective nationalization will be realized through "democratising the commanding heights of the economy, to ensure they are not legally owned by the state, but that they are thoroughly democratised and controlled by the peoples". But what is democratization? Sadly, the Document does not define for us this critical term although we may assume it means the popular ownership and control of the means of production.

Still, the confusion, or more precisely, the lack of clarity does not end there. After asserting that "the State's control and ownership of [m]ines will amount to direct developmental investment into South Africa's economy" the Document then presents a mixed economy ownership model which entails strategic partnerships with mining companies and the presence of small and medium mining enterprises:

"The kind of partnerships which can be considered in the immediate [future] could include but not limited to State control of majority shares in all big mining corporations, whilst allowing the Small and Medium mining houses to privately extract and trade minerals. Botswana and Namibia present useful archetypes on how South Africa can approach and practicalise this consideration".

At this stage, we are left no wiser as to what the League, and Cde Malema in particular, mean by nationalization. We believed as we were asked to do by the Conceptual Document, that nationalization means the ownership, control, extraction, processing, beneficiation and trading of mineral wealth on behalf of the people. A few sentences later, we heard that ownership does not entail legal ownership but rather, a vaguely defined concept called the democratization of the commanding heights of the economy. Now we have been told that nationalization could also be realized through strategic partnerships with big, predominantly white mining capital alongside small mining operators.

How different are the above arguments from the Economic Resolutions of the ANC's 2007 Polokwane Conference which say the party believes in:

"A mixed economy, where the state, private capital, cooperative and other forms of social ownership complement each other in an integrated way to eliminate poverty and foster shared economic growth".

Cde Malema would have us believe otherwise but his theoretical confusion is all too patent to miss. One wonders then why he chose to attack cde Cronin using language more befitting of Stalinist demagoguery than the informed engagement of a vibrant and intellectually robust progressive youth movement.

The socialization vs nationalization debate

In defense of his argument for socialization, cde Cronin suggests that the systemic nature of our economy coupled with our current economic reality are, above all else, critical to our understanding of how we should approach the call made in the Freedom Charter that "the mineral wealth..........shall be transferred to the ownership of the people as a whole".

Cde Cronin argues that our colonial and apartheid past has imposed on us certain 'systemic realities' that we must contend with. These realities, which include an over-reliance on minerals for economic growth and the existence of monopolies in mining and beneficiation industries (e.g. ESKOM, SASOL and Arcelor Mittal), continue "to lock us into a semi-colonial status within the world economy". In the words of cde Cronin:

"It is these (and other) systemic realities that continue to reproduce crisis levels of unemployment and racial inequality. And it is these systemic realities, therefore, that need transformation, and they go to the heart of the possibility and necessity of a patriotic, multi-class, democratic and, yes cde Malema, even non-racial struggle to transform our country. It is a struggle that, of course, will be driven by the workers and poor, and by the aspirations and capacities of the black majority. In other words, this is the heart of today's national democratic struggle."

Furthermore, cde Cronin cautions that at this economic juncture, the nationalisation of mines will most likely result in a "capitalist friendly bail out" of the many struggling mining companies. Many of these companies are unprofitable, struggling, BEE owned enterprises. In essence therefore, the objective reality of both the structure of our economy and the current economic crises are firmly against the idea of nationalisation, at least in its narrow sense of bureaucratic control by the state. I would not differ much with this approach.

Text and context: Revisiting the Freedom Charter

Dispute his conceptual confusion, a logical conclusion of cde Malema's argument is that to remain faithful to the Freedom Charter, we must apply a strict or textual interpretation of the Charter's and nationalise the mines. In doing so, he cites no less a force than cde Mandela who said upon his release that "the nationalisation of the mines, banks and monopoly industry is the policy of the ANC and the change or modification of our views in this regard is inconceivable".2

It was not the first time that cde Mandela had talked of nationalising the country's economy. In an article titled "In our life time" published on 19 June 1956 in the journal "Liberation", cde Mandela reiterated the call of the Freedom Charter to nationalise the economy by emphasising that:

"It is true that in demanding the nationalisation of the banks, the gold mines and the land the Charter strikes a fatal blow at the financial and gold-mining monopolies and farming interests that have for centuries plundered the country and condemned its people to servitude. But such a step is absolutely imperative and necessary because the realisation of the Charter is inconceivable, in fact impossible, unless and until these monopolies are first smashed up and the national wealth of the country turned over to the people."

Did cde Mandela change his mind then when both he and the ANC deviated from the earlier stance and opted instead for a mixed market economy? I would argue not. By applying context, they simply accepted that nationalisation was impractical in a world trying to move away from the then sad failures of the socialist experiment. Indeed, cde Mandela has on many occasions relied on context to justify the shift in ANC policy. In 1961 when the ANC turned to armed struggle, he cited apartheid violence and the closure of all possible avenues for dialogue as the reason. And during this first public address after release from 27 years of imprisonment, cde Mandela while saying the armed struggle had to continue, went on to "express the hope that a climate conducive to a negotiated settlement will be created soon so that there may no longer be the need for the armed struggle".

As a movement steeped in history, the ANC itself has embraced context at critical junctures in order to remain relevant to the needs and aspirations of the country's majority. At its formation in 1912, the ANC was a party of petty-bourgeois religious and traditional leaders. By the 1940s and 50s, the party had been transformed into a militant, broad racial and class based movement. Towards the late 1970s, leadership of the movement had been opened to both black and white cadres.

The gist of my argument here is that context, or in Marxist language, objective conditions are central to the way we understand, and thereby interpret the Freedom Charter. While in 1955 nationalisation may have been the 'panacea' to overcoming the exclusive, white racial domination of the economy, more than half a century later, a much more nuanced approach is required. Today, our economy may still be over-reliant on the extractive industries for growth but the tertiary sector (services) has supplanted the primary sector as the main driver of economic growth. In 1955, blacks in general and Africans in particular were firmly excluded from both the management of the state and participation in the economy-except as consumers and providers of cheap labour. Today, a democratically elected, black- led government controls the levers of the state. In a nut-shell, the lens through which the Congress of the People examined South Africa's political economy in 1955 cannot be the same one through which we look at it today.

Let a hundred flowers bloom

Critical and robust debate is the life-blood of any political movement and the opening up of democratic space within the ANC has been a welcome breath of fresh air since Polokwane. We must therefore resist attempts such as those made by cde Malema, to shut down those we do not agree with by hurling labels and epithets at them. It does our alliance no good to call those we differ from 'reactionaries', or 'fake left forces', or disturbingly 'white messiahs'. Pre-Polokwane, those who dared to stray from the dominant thinking of the 1996 Class Project were demonised as 'counter revolutionaries' and 'ultra-leftists'.

Before throwing his next insult, cde Malema may want to pose for a moment and reflect on Mao Tse Tung's injunction to his party comrades in 1956 that "let a hundred flowers bloom, let a hundred schools of thought contend".  Even the ANC embraces Mao's sentiment when it says in its 52nd Conference resolution on "Communication and the Battle of Ideas" that "the debate on the battle of ideas must begin within the ANC itself, the Alliance and the broader democratic movement". Insults and innuendos do little to advance this battle.

  1. The writer is a member of the ANC Sonia Bunting Branch in Johannesburg. He writes in his personal capacity.
  2. For historical accuracy, it should be noted that cde Mandela did not make this call in his "first public address after [his] release from prison". These words do not appear anywhere in cde Mandela's first public address on the evening of 11 February 1990. Dennis Davis in his paper titled "From the Freedom Charter to the Washington Consensus" attributes the quote to an article appearing in the Sowetan of 5 March 1990.