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Umsebenzi Online

Volume 13, No. 44, 23 October 2014

In this Issue:


Red Alert

Financial sector in need of radical overhaul to improve the economy

By Comrade Blade Nzimande, SACP General Secretary

THE SACP's 2014 Red October Campaign focuses attention on the financial sector. One of its main aims is to break the investment strike capital has embarked on.

South Africa's primary challenge is indisputably its massive unemployment rate. There is plenty of work to be done to develop the country and to meet its people's needs. But capital still tends to sit on huge piles of cash or uses it speculatively rather than investing in the productive economy.

There is a strong tendency in the media and parts of the business community to blame the post-apartheid government for the country's poor economic performance. There has recently been another spate of attacks, especially by financial sector economists, who blame government for low investment in the economy. They argue that the causes are policy uncertainty, poor planning, and a lack of capacity and skills in government. In addition, they blame labour legislation and labour action.

As far as policy uncertainty is concerned, we should point out that democratic South Africa's macroeconomic policy has always been friendly to capital, whether during the time of the Growth, Employment and Redistribution programme or the National Development Plan.

There have periodically been vigorous debates inside the ANC and the DA, with many critical analyses of the government's macroeconomic and other policies, including dissatisfaction by the ANC's allies. When such discussions take place, many media commentators cry policy uncertainty, even though robust debates about economic policy are common in most countries.

South Africa has medium-term planning and the government has been deliberate about creating an environment friendly for investors. South African labour markets are not inflexible but they do provide workers with certain rights. Trade unions do assert their power, as do employers, and relations between labour and business may become worryingly tense. However, the country has developed institutional mechanisms to manage these tensions.

As far as capacity in government is concerned, one cannot say the situation is ideal, but it is matched by inept business practices in areas such as managing labour relations and a failure to seek out export markets.

We must also take into account the serious economic conditions in South Africa and globally - largely created by the financial sector - that have negatively affected economic performance. It is high time that the financial sector owned up to the role that it has played in creating uncertainty and instability in the South African economy - and, indeed, in the world economy.

One suspects that their blame game is a tactic to divert attention from their own culpability. The behaviour of the large financial institutions in the period leading to the most recent global financial crisis caused huge suffering.

The role that big finance continues to play in the global and domestic economy has not changed fundamentally since the crisis. In fact, finance capital has become more predatory. We believe that the actions of financial institutions play a much larger role in holding back investment than do the government and labour.

It is worth examining the negative role that the financial sector plays in restricting the government's ability to support long-term productive investments and employment creation. South African banks and other financial institutions emulate the behaviour of those on Wall Street and in the City of London.

In the pre-2008 period, they worked to loosen financial regulations and take advantage of the deregulated financial environment. They worked to loosen credit standards, increase leverage and flood markets with liquidity. The outcome was asset bubbles in property and financial markets.

Possibly the main reason that South Africa avoided the worst of the financial crisis was that the government resisted many of the demands to deregulate finance and abolish exchange controls. Arguably, though, this only postponed the pain that we now face. In any case, the damage done by financial speculation to the real economies in developed countries has had a serious, negative impact on the country's trade.

In recent years, South African households have been encouraged to go into debt to buy houses, cars and other consumer goods and to max out their credit cards.

The Department of Trade and Industry also found out that in a small area like Marikana there were 12 mashonisas preying on mineworkers. One of the results of this is the current weak demand from deeply indebted consumers - and suffering for those who are over their heads in debt.

During the wild time leading up to the financial crisis, the financial sector put huge pressure on executives of non-financial companies to increase short-term profits. Pressure from financiers pushed firms to outsource and move production offshore.

All this pressure for short-term returns eroded the productive base of non-financial firms. The short-termism meant that firms spent less time on increasing innovation, productivity and job creation and instead drove up their profits through speculative activity. This is demonstrated by the fact that, by 2007, South African non-financial corporations' financial assets were 250 percent the size of their fixed assets. The credit extended to the South African private sector grew by 22 percent from 2000 to 2008 but private fixed investment grew by only 4 percent.

This diversion of credit towards non-productive speculative activities cannot be blamed on government. The financial sector's action that drove bubbles in financial asset prices and their pressure on non-financial corporations to keep producing short-term high returns were to blame.

The kind of economic growth South Africa experienced before the global financial crisis was not sustainable and the financial sector knew this. It knew that it was causing South Africans to become more indebted and it knew that the bursting of the financial asset and house price bubble would cause pain.

However, the mind-set in finance was as expressed by former Citigroup chief executive Chuck Prince, who famously stated in 2007: "As long as the music is playing, you've got to get up and dance". These are people who were prepared to take entire economies to ruin because they wanted higher returns that boosted their personal fortunes. And they were not only Americans, but also South African. Now they attempt to shift the blame onto the government and the working class.

The government should actively seek to regulate the financial sector to the benefit of the real economy - and especially to ensure that it stimulates rather than inhibits job creation.
Most importantly, the country needs a radical transformation and re-orientation of its financial sector if we are to realise the objectives of a second phase of our transition, especially to ensure that our savings are invested in a job-creating manner.

This articles was first published by the Business Report, 16 October 2014, 08:00am


Reflections on the character of the international context

Comrade Solly Mapaila, SACP Second Deputy General Secretary

The fundamental questions that we seek to resolve as a revolution are complex. In the face of this reality it does happen at times in political movements that instead of tackling such questions for what they are, some would rather degenerate and adopt simplistic approaches. When this slides into narrow and factional grudges it becomes even more problematic that it could weaken unity and cohesion within a movement, and thus, wittingly or unwittingly, tilt the domestic balance of forces in favour of strategic opponents. This is the departure point to defeat in the international balance of forces which capacity to tilt is simultaneously curtailed. It is of no use to a revolutionary, i.e. if a person is indeed one, to seek a scapegoat within one's own movement or Alliance and polarise it as a contribution to the answer to the complex questions that are under strategic consideration.

Revolutionaries treat of complex questions for what they are, regardless of the degree of sophistication this may demand. Our intervention today focuses on methodology to the question of the character of the international context. The actual analysis and clarity of the tasks we are facing will follow in a series of instalments.

But we lay the basis as we proceed methodologically.   

The analysis of the character of the international context is often reduced to events that are taking place in, or between, other countries. Consequently, the national sphere is not considered to be an international platform of action. Similarly, national processes and the forces that shape such processes in their international aspect are left out in this erroneous analysis as is the role that we - as one of the forces at play too, both as a movement and country - can play in shaping the international context. This further excludes an examination of the relationship between the national and the international contexts and related balance of forces.

Our intervention today looks at the question of the character of the international context methodologically. This we do by means of a review of the renowned communist scholar, Antonio Gramsci's Selections from the Prison Notebooks. We particularly focus on his contribution, ‘Internationalism and National Policy', because we believe it has useful elements that can help us move forward.

Let us from the onset clarify the question of the relationship between the international and national balance of forces, i.e. whether the former conditions or influences the latter, or vice versa. The answer cannot be fixed for all the times; it must be as dynamic as the changes taking place in material conditions; neither can it, therefore, be a straightjacketed one. The relationship between the two is a dialectical one. It is constructed in both ways, and is itself dependent on the balance of forces between the two, i.e. the national and international balance of forces! Our intervention must be understood in this context.

Our selection of Gramsci's classical contribution is also based on the fact that it not only moves from the standpoint of analytical methodology but the struggle for change and development. He best captures the problem being considered by posing the question:

How, according to the philosophy of praxis as it manifests itself politically, whether formulated by Karl Marx - the founder of the philosophy, or particularly by Vladimir Lenin - its most recent great theoretician (i.e. at the time), the international situation should be considered in its national aspect? 

Gramsci argues that the national context of every country is the result of a combination of original and in a certain sense unique factors. These have to be understood both in their originality and uniqueness for an organisation to lead and direct them.

Instead of being trapped in an abstract international sphere, Gramsci asserts that:
"To be sure, the line of development is towards internationalism, but the point of departure is ‘national' - and it is from this point of departure that one must begin. Yet the perspective is international and cannot be otherwise."

This is important for the progressive and revolutionary movement to take seriously. In other words, this movement, the majority of which is made up by the working class, must intensify the struggle for a complete revolution in every country, i.e. right at home. However, at times conditions could - as was the case in South Africa since 1950 starting with the banning of the Communist Party followed by that of the ANC in 1960 by the apartheid regime - force the movement to go underground and in exile. This did not mean that we abandoned action in the home front.

On the contrary, underground work and work in exile including mass mobilisation and international mobilisation to isolate the apartheid regime and bring it down were a direct continuation of work in its scientific definition to reinforce and intensify the struggle right at home. This is how all the pillars of our struggle, including the armed struggle we were compelled to adopt, were mutually reinforcing.

The overthrow of colonialism and apartheid and the elimination of their underpinning social relations of production at home were, however, only a part of, and therefore did not alone constitute, the totality of our greater goal. Conversely, these were inextricably linked with the struggle for world peace to which our struggle had to contribute. This struggle was at the same time an international struggle:

World peace was, and still is, impossible to attain for so long as there is a section of the people in any part of the world who are facing injustice from another, regardless of whether such is from within or outside national borders. 

The struggle for world peace continues!     

After all, the super-structural and structural systems of oppression and domination, such as colonialism, neo-colonialism, capitalism and its highest stage, imperialism, the latest form of which is neoliberalism, are world systems. In each country, the forces behind the world systems of oppression and domination manipulate and exploit the original and unique factors, including the specific weaknesses, of the national context that obtains, this as an entry point and in order to entrench. 

Gramsci asserts that it is necessary to study and accurately interpret the combination of national forces which the ‘international class' has to lead and direct. By the ‘international class' he refers to the class of wage labourers, i.e. the proletariat. This, of course, and at the same scale, is faced with its opponent, the class of the exploiters but who, while essentially the same in character do not necessarily share common national interests at every moment and therefore do develop divergent perspectives on associated questions of the day. Based on our theory of organisation and taking into consideration all the motive forces of our revolution, let us consider that the ‘international class' in its broad definition refers to the working class, which, all our Alliance partners agree, is the main motive force of our revolution. 

Such a force, according to Gramsci, which is international in character, has to ground itself nationally (i.e. to "nationalise" itself) inasmuch as it guides various social strata; some of these strata might as well be narrowly national in their outlook but nevertheless necessary to marshal in an internationalist direction. This sense, he contents, is not a very narrow one either, since before the conditions can be created for an economy that has a world plan, it is necessary to pass through multiple phases in which regional economic integration of groups of nations may assume various forms of organisation. In addition, this has to be understood in the context of the balance of forces nationally and internationally at different levels, i.e. regional, continental and world scales.   

Gramsci's conclusion is even more important for us:

"…it must never be forgotten that historical development follows the laws of necessity until the initiative has decisively passed over to those forces which tend towards construction in accordance with a plan of peaceful and solidary division of labour (by this he also discusses the socialist forces).

As such:

"That non-national concepts (i.e. ones that cannot be referred to each individual country) are erroneous can be seen ab absurdo: they have led to passivity and inertia in two quite distinct phases:

  1. in the first phase, nobody believed that they ought to make a start - that is to say, they believed that by making a start they would find themselves isolated; they waited for everybody to move together, and nobody in the meantime moved or organised the movement;
  2. the second phase is perhaps worse, because what is being awaited is an anachronistic and anti-natural form of "Napoleonism" (since not all historical phases repeat themselves in the same form).

These two errors must be seen also as the direct results of an analysis that starts and ends with the international context that is seen narrowly as constituted by the "external world". In addition, the same approach leaves out of sight the national sphere of action as part of the international terrain itself.

It would be fatalistic and amount to the desertion of the revolution to be part of those who do not believe that they "ought to make a start" from which others must also take their cue.

Most importantly, it is from the standpoint of ‘philosophical materialism', based on a historical and dialectical perspective that we can best develop a scientific understanding of the international context (as it is with the national context). This methodological approach does not start and end with an analysis of events in their appearance only or in isolation from, but moves deeper into, their essential content, material basis and structural forces. In this way we will examine the most influential and ultimate decisive factor, the economy, appreciating that it is at the centre of those developments and the configuration of the forces behind them. It is from this very same point of view that the national content of international policy and the international content of national policy must be framed, articulated and elaborated.

Second Deputy General Secretary, Comrade Solly Mapaila, Tshwane, 18 October 2014


The Struggle for the release of the Cuban Five and an end to economic blockade on Cuba: A class struggle

By Comrade Benson Ngqentsu

There are two crucial events that took place recently that should have dominated media head-lines internationally. These are the deployment of a sizeable number of medical practitioners to the West Africa in the fight against the Ebola epidemic and the 10th Colloquium on the Cuban Five. But because these crucial developments pose a serious threat to the barbaric and inhuman system of capitalism and its headquarters, the United States, and are indeed neither in favour of the current ruling imperialist class, they were not covered by the media, print or electronic. This confirms the analysis by Karl Marx and Frederick Engels that the dominant ideas and institutions in a class divided society are the ideas and institutions of the ruling class.

Having attended and participated at the recent 10th Colloquium for the release of the Five Cuban Heroes, hosted in Havana on 11th-12th September 2014, I observed and appreciated the unity of communists and non-communists from around the world on this question. These internationalists were firm on their demand for the Release of the Five Cuban heroes, Gerardo Hernandez, Ramon Labonino, Antonio Guerreo, Fernando Gonzalez and Rene Gonzalez who were falsely accused by the U.S. government of committing espionage and conspiracy against the United States. These are unjustly imprisoned in the United States after being arrested by the FBI on 12th September 1998 and convicted in U.S. federal court in Miami in 2001 in a political prosecution by the U.S. government.

The unity for the call of the release of the Cuban Five is also inextricably linked to the struggle against imperialism as the highest stage of capitalism - which is fundamentally responsible for global inequality, unemployment and poverty. 

Very importantly, progressive forces internationally have the responsibility to correctly locate  the arrest of the heroic Cuban Five  as a renewed imperialist offensive targeting the revolutionary Cuba as the entry point of an attack on alternatives following  the collapse of the Soviet Union in 1990. The arrest of these heroes who were engaged in seeking a peaceful world order followed their publicly acknowledged mission to keep the Cuban government informed about the terrorist attacks on Cuba carried out by counter revolutionary forces sponsored by the U.S. government. The U.S. imperialist regime knew of the bombings carried out on Cuba, notably in Havana, that brutally killed many innocent people.

As many progressive authors probed this question, Martin Koppel concluded that not only had Washington done nothing to prevent the attacks, but it had given these counter-revolutionary groups a green light throughout more than five decades of U.S. diplomatic, economic and military aggression against the Cuban Revolution.

The current imperialist offensive against the revolutionary Cuba including the arrest and detention of the Five Cuban heroes predates 1959 triumph of the socialist revolution in Cuba, a country just ninety miles away from the U.S. shores. The U.S. has backed the dictatorship that was overthrown by the revolution.  

The campaign for the release of Cuban Five and against the imperialist's economic embargo on Cuba forms part of a bigger class struggle against the inhuman capitalist order. It is time for progressive forces in SA and internationally to intensify international solidarity with Cuba. In the course of the movement, we must see to it that this campaign has a practical meaning to the working class internationally, as well as an impact on Washington.

This has to be articulated in a manner that every conscious worker anywhere in the world, knows and understands the internationalist character of our struggle and the plight of the people of Cuba, and appreciates that this is the struggle against economic exploitation.  Every worker must know about the cause the Cuban Five are persecuted for and clearly articulate the demand for their unconditional released.  Their release is part of our broader revolutionary task against the greedy, corrupt system, imperialism, which continues to oppress the people of the world.

The struggle for the release of the Cuban Five and an end to the economic blockade on Cuba is a necessary struggle to free humanity from the bondages of imperialist dominance. It is a significant advance towards an international socialist order - the only system in which the world will no longer be ruled with the barrel of a gun in a struggle to conquer other nations. 

SA's solidarity work with the revolutionary Cuba has to be undertaken within a particular political context. Cuba is rejected and despised by the "Democratic Alliance", a key tool of racist conservatism and imperialism in our country. In advancing its cause, imperialism heavily finances the DA and the like minded South African media to adopt a very hostile stance to Cuba. This is reflected on the DA's blockade of the SA-Cuban government programme for training our youth in medicine free of charge. In an a well-directed offensive the DA decided to disallow the youth in the Western Cape not to participate in this good gesture due to its permanent commitment to the imperialist agenda.

This position from the defenders of white privilege and the servants of imperialism in SA is mainly based on their historical memories that Cuba played a pivotal in Southern Africa to dislodge apartheid and imperialism. 

We, for our part and that of humanity as a whole, will remain indebted on the selfless contribution Cubans made in our struggle to against apartheid and its invasion of Angola at Cuito Cuanavale. Their role immensely contributed in forcing the apartheid regime to realise that minority rule was over and that negotiations were inevitable. The history of our liberation struggle in particular and in Africa in general is incomplete without recognising the contribution by the Cuban people.

Progressives in SA, particularly our government too, should take our solidarity beyond motions at congresses and in Parliament. As the ANC recently pronounced itself against the atrocities committed by the U.S. puppet, Israel, the same policy stance should be taken against U.S. imperialism in general.  SA's academic fraternity, churches and their congregations, and student bodies, must join the demand of the release of the Cuban Five in recognition of Cuba's solidarity work that made our democracy possible.

Our class enemy, imperialism, with the U.S. as its headquarters, relies on terrorist acts and suppression for their continued international dominance. As Thomas Sankara once observed: "he who feeds you controls you". We see how desperate is the international capitalist media to under-report if ever at all the inhuman and unjust acts by the U.S., which has the highest percentage of a population that is behind bars compared to any country in the world. This its necessary pre-condition for dominance both at home and abroad. We are aware that the Cuban Five are amongst the 2.2 million men and women who are languishing in U.S. prison cells. The U.S. also has the highest citizens of other countries in its prisons including human rights violations at Guantanamo Bay.

The international campaign has achieved the release of two of the Cuban Five - Rene Gonzalez and Fernando Gonzalez. We must now build consistent mass action throughout the world to demand the unconditional release of the remaining three.  Because Rene and Fernando will never be really free until their three comrades are free too, we must intensify the demand: 'Release the Five Cuban heroes; end the illegal economic blockade on revolutionary Cuba!'

Benson Ngqentsu, is SACP Brian Bunting District Secretary, NUM Western Cape Regional Organiser, and writes in his personal capacity.


Congratulations to SADTU

By Comrade Phatse Justice Piitso

I was amongst the most fortunate to be counted in the delegation of the South African Communist Party which attended the recent national congress of the South African democratic Teachers Union (SADTU). From the deep bottom of my heart I convey my appreciation to the leadership of the party for affording me the opportunity to attend this most historic supreme gathering of the union.

The congress was one of the greatest milestones in the history of the union. It will forever decorate the beautiful chapters of our history books.

What distinguishes it from others is that it took place against the background of events of great historical significance in our country and the whole world. Events that define the shape of the annals of our history in the making.

First and foremost the congress took place three years before the Centenary anniversary of the Great October Socialist Revolution that took place in Russia, 1917. An earthmoving event that shook the foundations of the world capitalist empire.

Secondly it took place a year before our country and the people celebrate the 60 year anniversary of the adoption of the Freedom Charter. A document that has become the guiding tool of our struggle for the total liberation of our people.

Thirdly the congress took place twenty four years after the collapse of the Soviet Union and the eastern bloc of socialism. The most painful event that has weakened the world progressive movement.

Fourthly it took place at the time when the people of our country are celebrating 20 years of the achievements of our democratic dispensation. A period that ushered the end and the beginning of our new forms of protracted struggle for the socio-economic transformation of our society.

Lastly the congress took place against the background of counter revolutionary momentum that seeks to divide our labour federation and our revolutionary alliance led by our national liberation movement. The aim is to undermine the achievements of our National Democratic Revolution.

These forces of counter-revolution are opposed to the guiding principles of the Communist Manifesto.

"Communist do not form a separate party opposed to the other working class parties. They have no interests separate and apart from those of the proletariat as a whole. They do not set sectarian principles of their own, by which to shape and to mould the proletariat movement."

Delegates to the congress understood that their highest duty is to defend the unity and cohesion of our revolution. They attended the congress knowing well that the task is to triumph over the adversaries of our NDR.

The tumultuous mood of unity reverberating at the congress brought back the memories of my early years as one of the generation of the founding fathers of the union. I joined the ranks of the union at the embryonic stage of its formation immediately after completing my Secondary Teachers Diploma at Sekhukhune College of Education in the year 1990.

The overwhelming revolutionary mood reverberating through the roof of the presidium, reminded me of the philosophical words of courage from the leader of the world Communist Movement Comrade Vladimir Lenin when he said.

"In carrying its revolutionary tasks, the proletariat is able to draw its own national traditions of struggles, the traditions of its own songs, slogans, symbols and heroes. It fulfilling its leading role the proletariat is able to rally its allies to the bottom of the common cause of its struggle".

The congress was itself a demonstration of the fundamental principle of unity and cohesion. The guiding principle of one union one industry, total workers control and the building of a strong shop floor structures.

I can confirm that the union I belonged to, the union that has traversed the most glorious and heroic path of our struggle, is still rooted in the rich traditions and culture of our liberation movement. The traditions and culture that have become synonymous to the struggle of the people of our country.

The congress reaffirmed the historic role and centrality of our liberation movement as the premier leader of our common struggle to build a better society. A historic role that premised the demise of one of the most brutal pariah states in the history of mankind.

The basis of discussions from plenary was informed by the principle of constructive criticism and self-criticism. Delegates understood well that contradictions make us grow and develop.

There was a conducive atmosphere for a sober, robust and fearless debate, and a determination to give way for a comprehensive appraisal of the weaknesses, strengths, and the programme of action of the union into the future.

Congress understood well the most complex political question that unity and cohesion is the cardinal principle of our revolution. That the unity of our revolutionary forces is a guarantee for the success of our National Democratic Revolution.

This was a platform to confirm that the general membership of the union comprehends the tasks of our second phase of our transition for a radical socio-economic transformation of our society, with the ANC affirmed as the leader of our struggle for the construction of our national democratic society. Importantly the congress corresponded well with the conception that the working class is the backbone of our transition to build a non-racial, non-sexist, democratic and prosperous society.

During the Congress of the Second International Comrade Vladimir Lenin again had to say the following about the role of a trade union movement in the struggle of the working class.

"Both the political and economic struggle of the working class are equally necessary for the complete liberation of the proletariat from the shackles of ideological, political and economic servitude. Whilst the parties of social democracy fail to organise and to lead the political struggle of the proletariat, so it is the task of the union organisation to coordinate and lead the economic struggle of the working class".

To this end it is important that the South African working class understands the class character of the ANC as a revolutionary national liberation movement. That it grapples well with the most important theoretical formulation of the relationship between the national, class and gender struggle.

Our national liberation movement is not just a nationalist movement which its focus is the colours of our national flag, national anthem, different ethnic and race groups,  borders and the names of the oceans, rivers, mountains, valleys and neighbours surrounding our democratic republic. Our movement is a revolutionary national liberation movement.

The ANC is part of the worldwide struggle of the people of the world to liberate themselves from the yoke of imperialism and neo-colonialism. Our movement is part of the revolutionary contingent to liberate the world from the legacy of poverty, disease and underdevelopment.

In 1928, the plenary session of Communist International characterised the South Africa then as a British dominion of a special type. The character of the South African economy was such that British imperialism carried the economic exploitation of our country with the participation of the white South African bourgeoisie. The Communist International called for the establishment of native South African republic as a stage towards a worker or a peasant republic with full equal rights for all races. It formulated the theoretical preposition that the oppressed people of our country do not only suffer from capitalist exploitation and imperialist domination, but also from racial discrimination. A theoretical synthesis that constitute the core of the essence of our national democratic revolution.

Our union SADTU has an immediate task to lead in its space the political and socio-economic struggle of the working class during this important period of the second phase of our transition for the construction of our national democratic society. The foremost task is the consolidation of the common cause of our National Democratic Revolution.

Therefore our struggles against opportunism and counter-revolution is inseparable from the revolutionary struggles of the working class. Without a protracted and resolute struggle against all these counter-revolutionary tendencies there will be no victory of the working class struggle.

Phatse Justice Piitso is the former Ambassador to the republic of Cuba and former Provincial Secretary of the SACP in Limpopo, and writes his personal capacity.