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Umsebenzi Online

Volume 16, No. 06, 28 February 2017

In this Issue:


Red Alert

Radical economic transformation: context, what it is and what it is not

By Solly Mapaila


Radical economic transformation (RET) is very important to South Africa's (SA's) democratic transition towards the vision of a non-racial, non-sexist, democratic and prosperous society as succinctly summarised in Freedom Charter. In 1994, the African National Congress (ANC) in alliance with the SA Communist Party (SACP) and the Congress of SA Trade unions (Cosatu) supported by mass democratic organisations achieved a radical democratic breakthrough dislodging the apartheid regime.

Apartheid state machinery was replaced with new state institutions laying the foundation for the development of democracy. Millions of South Africans, especially the historically oppressed, realised an improvement in their conditions of life. This was further enabled by the new constitution recognising human rights, including workers and socio-economic rights, and massive social redistribution programmes. However, there was no RET to support broader democratic social transformation. This reached a point where it undermines the expansion of social redistributive programmes. It is now the new problem we are facing as a nation.

The Growth, Employment and Redistribution (Gear) strategy imposed as overarching government economic policy in 1996 contradicted the economic goals of the Freedom Charter. It resulted in de-industrialisation as imports surged because of its neoliberal shock therapy, imposed without regard to the necessity of developing national production. Manufacturing sectors such as textile, clothing, leather, footwear and household appliances, were almost completely destroyed. The expansion of housing and electricity was not underpinned by industrial strategy to develop local production of household goods. As a result, almost all electronic devices and electrical appliances sold in South Africa are now imported.

Massive retrenchments followed, contributing to what was already a crisis level of unemployment. Inequality widened and poverty persisted.

The raw materials boom that was largely driven by manufacturing in China contributed significantly to growth in the early 2000s. This occurred not only against the backdrop of massive retrenchments but also aggressive restructuring of workers. Capitalist bosses increasingly started replacing permanent employment with insecure labour brokering, casualisation and temporary employment to suppress wages. This “golden period” of growth post-1994 was severely interrupted by the eruption of the ongoing capitalist economic crisis in 2008 worsening inequality, unemployment and poverty.

The lack of RET was exposed. 

Close to one million workers were retrenched as raw materials demand plummeted. Retrenchments continued, acting against government policies to reduce unemployment. According to Stats SA's Quarterly Employment Statistical release in June 2016, the mining sector alone, for example, dismissed 32, 000 workers year-on-year‎ at that point. Very recently, AngloGold Ashanti declared that it was contemplating retrenching about 850 workers.

It was in the context of the crisis that the ANC in 2012 adopted the perspective to advance RET. This belated decision came after more than a decade of campaigning by the SACP and Cosatu for the Alliance's shared programme of the national democratic revolution to be radicalised on the economic front.

What then do we mean by radical economic transformation?

Firstly by RET it is meant not private corporate, not personal, not state-captured, family interests propagated in the name of all Black people. Corporate capture of strategic levers of power and corruption, all of which the SACP has been fighting, are worrying. It is reasonable, therefore, based on the experience, to believe that even where the conventional formula “Blacks in general and Africans in particular” is invoked on ownership transformation what is at play in so far as some fellows are concerned is the self, the “me”, “my family”, hangers-on, corporate capturers, blind loyalists.

Constitutional prerogatives must not be used to feed the root of such interests or other private agendas. RET cannot be about producing new layers of the Gupta phenomenon, an elite club of new billionaires based on inequality, and, in the sea of poverty and unemployment.

In fact class inequality, which in SA is further articulated along the lines of race, gender and geography, is driven, primarily, and historically, by capitalist accumulation of the surplus (wealth) socially produced by workers. Workers get nothing from the surplus appropriated by capitalists as profit. Their wages are, to capitalist exploiters, a cost that must always be suppressed to maximise profit.

Capitalists always insist on economic growth. But rather than the common good of the people as a whole, they are selfishly interested in increasing the rate of their private surplus appropriation. There will be no RET without altering this social equation and ultimately turning it on its head! As Karl Marx said long ago in 1844, by being radical it is meant grasping the root of the matter, and proceeding from the root. This is it!

RET must be seen as a democratic programme to restore production surplus to those who socially produce it, to each according to their contribution. This must fundamentally define what is meant by shared growth.

It is not radical to transfer ownership to an individual who is interested only in joining in the exploitation of the masses and privately accumulating the wealth they socially produce. This is why the SACP has called on workers to fight exploitation and assert their primary objective of socialised, and public, ownership and control to reduce class inequality.

A project for elitist groupings, regardless whether they are Black or White, to loot or share in the loot of the social surplus produced by labour in our economy is not genuine RET but vulgarised RET. The working class must stand up and confront such an insult, an undermining of its intellectual capacity. The working class is not a tool to be mobilised on the basis of a racial sounding rhetoric for the enrichment of a few individuals who can only become rich on the basis of joining in the exploitation of the very working class.

RET must drive a mass-based empowerment of the labour force involved in production. It must take care, through social redistributive programmes, including a comprehensive social security, of those who are yet to be directly involved in production, those who have retired, and those who have disabilities preventing them to be actively involved in productive activity. RET must, simultaneously, systematically expand national production to give effect to the Freedom Charter's principle for everyone to have access to productive work from which they can lead a decent life.

RET must secure our independence: democratic national sovereignty. Freedom from imperialism is very much part of its core, as it is with, ultimately, freedom from economic exploitation. RET must eliminate the colonial character of the structure of our national production and its terms of international trade. This requires increased investment in innovation, research and development, radical curriculum transformation and improvement in the quality and outcomes of teaching and learning. We must surpass theUnited Nations Educational, Scientific and Cultural Organisation (UNESCO) target of 1 percent gross domestic expenditure on research and development (GERD). According to a UNESCO's study published in September 2014, at that time our GERD was 0.7 percent. We did not have any radical increase in our GERD since then.

Related to the above, and in fact all aspects of RET, is the important question of how it will funded and where the revenue will be generated. This requires another instalment over and above the present intervention. The focus of this intervention is on the fundamental principles which must define the basic content of RET.

Flowing from the above, especially the imperative of raising our levels of productive engagement and output in and funding of innovation, research and development, we must pay greater attention to, and increase the number of learners, students and graduates in mathematics, technology, natural and life sciences to pursue scientific solutions through made-in-SA inventions, discoveries and designs. This is one of ingredients for driving manufacturing expansion and diversification for local use and international trade to eliminate the colonial structure of our economy: Our economy was colonially structured to rely on exports of raw materials and primary goods and to be dependent on imports of finished products.

RET must build democratic control of our mineral resources, including through new pricing structures to build strategic advantages for localising production and creating jobs through value adding processes.

Among other measures, we must eliminate both export and import parity pricing on our raw materials and primary goods specifically to support national production development through manufacturing expansion and diversification. We must introduce developmental pricing to support production localisation. Our mineral resources must largely benefit the people as a whole compared to private economic interests concerned only with profit maximisation and private capital accumulation.

RET must speed up land redistribution. But, we must assist historically disadvantaged people who already have land to use it productively. This requires support in the form of materials, inputs, equipment, water supply, training and monitoring to ensure maximum results and, on a consistent basis. We must guard against collapsing production in the name of radical land redistribution.

Democratic national sovereignty is, to emphasise, fundamental to RET. We must not allow it to be handed over or subordinated to monopoly capital, corrupt economic forces, oligarchies or oligopolies, Black or White. RET must eliminate private dominance, monopoly, oligopoly and deal more decisively with collusion. It must build public and socialised ownership, collective and democratic worker control and management, including thriving co-operatives in all sectors of the economy.

In addition, therefore, thoroughgoing anti-monopoly institutional, legislative and regulatory changes are required, including anti-oligopoly, anti-oligarchy, anti-concentration, anti-collusion, anti-price fixing and anti-all other sorts of manipulative economic ownership structures and market conduct!

* Cde Solly Mapaila is SACP 2nd Deputy General Secretary


Umsebenzi Online is an online voice of the South African working class