Reflections on South Africa: whose capital, whose state?

Main argument summarised

President Jacob Zuma narrowly survived the recent (9 August 2017) parliamentary secret ballot on no confidence in him.  177 MPs voted for the motion, 198 against and 9 abstained. Clearly, many African National Congress (ANC) MPs had voted for the motion and against their president. It was a close call. Had the motion been carried, the President and his cabinet would have had to resign immediately. [1]

In this piece I take a longer term perspective. Briefly stated, my view is that it is not in the parliament or even in the ANC where the real problem (or its solution) lies. In other words, even if President Zuma were to leave (and replaced by, say, Cyril Ramaphosa), the country is nowhere near getting out of its political crisis.  Why not? It is because the problem lies, essentially, in the captured polity of the South African state and economy.  This has deep historical and systemic roots, and it is an attempt to analyse these that I write this piece.

Whose capital?

Some questions remain perennial.  As long as capitalism remains the dominant system of production, one question on which we need clarity is the ownership of capital.  The ownership of capital can change from time to time – for instance from private hands to state control.  But there are certain aspects of ownership that will remain substantially the same.  Even if the state takes over capital, the question still remains: whose state is it?

The two questions – whose capital and whose state? -  cannot be dismissed away during the long course of struggle against capitalism and imperialism.

Dialogue with Joe Slovoe and Ruth First

During our days in Dar es Salaam in the 1970s the question of who owns capital in South Africa had become a major issue of contention between our party in Uganda (at that time still clandestine, and led by the late Dani Nabudere) and the South African Communist Party (SACP). We had debates with, among others, Joe Slovoe and Ruth First. For a time, Ruth was based in Dar es Salaam on secondment from the University of Durham. She had assisted me to run a course called “East African Society and Environment” (EASE), a mandatory course for all those studying the Social Sciences. We discussed a wide range of issues with Ruth and Joe whenever Joe happened to pass through Dar.  Joe maintained that the capital in South Africa was South African, owned by global capitalists but only temporarily.  Once apartheid was defeated, this capital would be nationalised. We agreed that the capital should be nationalised, but contended that this was not such an easy matter as Joe seemed to suggest.

Let me elaborate.

Continuing dominance of imperial capital in South Africa’s economy

At the time of our conversation with Joe and Ruth, we argued that the so-called “South African” capital was not owned by the Boers, except a few minor banks, among them, or example, the First National Bank (FNB) Trust Bank, Sanlam, and Volkskas) - and agricultural lands.  The “South African” capital was owned by global corporations. Anglo-American, for example, was precisely that – owned largely by the British and the Americans. The Standard Bank of South Africa was owned by the British.  And so on with respect to other banks, mining companies, large estates, and insurance and shipping companies, etc.  

We argued that the ANC (and other parties) would have to fight against Boer nationalism first. To nationalise banks and assets owned by imperial corporate capital, like the Standard Bank of South Africa, you’d have to fight yet another war against imperialism.  It would not be so simple an exercise as it might appear. Ruth slowly came closer to our position; Joe was adamant that once the state was captured by the people of South Africa, one of the first things the government would do was to take over the control of capital on the way to building socialism.

Let us, therefore, look at the record so far.

South Africa’s first “independence” from Britain was by the Boers in May 1910. The second “independence” came in April 1994, in which the empire colluded with the ANC: it more or less told the Boers that their era was over, and they must make peace with the Africans.  In other words, the empire simply betrayed their erstwhile allies in South Africa, and turned from the Boers to Africans.

As of today, just as the Boers had failed to take over imperial capital, the post-apartheid regime has also, 23 years down the road, failed to take over imperial capital in South Africa. 

To be sure, the government inaugurated the Black Economic Empowerment (BEE) program, and up to a point the imperialist capital played ball by offering shareholding (and even selling off minor assets) to Africans, including, for example, Cyril Ramaphosa. But the BEE is nowhere near creating “national” capital. In fact, according to my analysis, there is really very little “national capital” in South Africa. The South African struggle to nationalise the economy has substantially failed. In fact, the “independent” ANC government has not even been able to fulfil its promise to people to restore their lands, let alone banks.  (In neighbouring Zimbabwe, Robert Mugabe was at least able to transfer land to the people – notwithstanding the shortcomings).

South Africa’s first macroeconomic plan, 1994 - the Reconstruction and Development Programme (RDP) – looked promising.  But it had no clout, no backup by the state. Why not? Look back to what happened immediately after independence. The people were politically demobilised. I travelled around South Africa several times during those early years, and I could see that the people who had given their lives to the cause were getting disillusioned. The South African state was firmly in control of the empire - it was a neocolonial state – and the first thing it did was to demobilise the masses.

The RDP was replaced with the Growth, Employment and Redistribution (GEAR) strategy in 1996. GEAR was replaced in 2005 by the Accelerated and Shared Growth Initiative for South Africa (ASGISA). After Thabo Mbeki, Zuma replaced ASGISA with New Growth Path (NGP). Except for RDP (which lasted only two years) all other macroeconomic plans were fully in alignment with the empire’s neoliberal agenda.

That’s where we stand as of today – like it or not.

The hullabaloo over nationalisation

On March 30, 2017, President Zuma sacked Pravin Gordhan as finance minister, replacing him with Malusi Gigaba, who appointed Chris Malikane as his adviser. Malikane has come out strongly in favour of nationalisation. In an “opinion piece” that he had written before his appointment, he had said that the government should nationalise the country’s national resources.  In the hoo-ha that accompanied his appointment, and as the word spread around of his views creating near panic even within the ANC, the minister distanced himself from Malikane, and went on to assure foreign corporations that there was no intent to nationalise their assets.

And this is the point of this essay. Twenty-three years down the road to South Africa’s independence from the Boers, the government dare not touch imperial capital. It was not surprising that in the aftermath of the public expression of Malikane’s views, South Africa’s credit rating fell to “sub-investment” grade; and the value of its national debt was downgraded to two levels below “junk”. The empire was fuming against the government for their lack of loyalty.  Had the empire not helped to liberate the people from the Boers?  So, of course, it is not surprising that Minister Gigaba rushed to imperial capitals to assure them “please don’t panic, you are welcome to invest in our natural resources. Please come.”

And this is where the problem lies in South Africa.  

Let me now come to the second part of my interrogation.

Whose state?

The captured polity of the South African state

As we noted earlier, the nitty-gritty of the problem lies neither in the parliament, nor even in President Zuma as head of the ANC. Let me repeat: “… even if President Zuma were to leave (and replaced by say Cyril Ramaphosa), the country is nowhere near getting out of its economic and therefore political crisis. The problem lies, essentially, in the captured polity of the South African state and economy”.

Earlier, we also saw how RDP morphed into GEAR, GEAR into ASGISA, and ASGISA into NGP. Except for RDP (which was killed in its infancy), all other macroeconomic plans were fully in alignment with the empire’s neoliberal agenda.  South Africa had abandoned its liberation project in favour of a neoliberal project, and had evolved into its second phase (the first was under the Boers) as a neocolonial state.

Kwame Nkrumah revisited

It is important to understand the phenomenon of neocolonialism, because unless we do so it is not possible to properly analyse the so-called “post-colonial” state in Africa. “Post-colonial” is a temporal concept, a time-based notion that has been used for political ends not only by politicians but also by the academia and the media. Many of them argue that “post” means the end of the empire: Africa is now “independent”; gone are the days of colonialism and imperialism. This is palpably untrue. Our understanding is that independence is an important achievement, but it manifests itself only at the political level and that, too, only partially. The economy is still not liberated from the control of the empire, and so even its politics are compromised.  Amongst all African leaders, the person who best understood and defined neocolonialism was Kwame Nkrumah.[2]

Here I describe five principal features of neocolonialism.

1.     A neocolonial state does not negate the rule of the international financial oligarchy.

2.     However, and this is important, the neocolonial state is at a heightened level of contradiction between imperialism and the people.

3.     The empire, though it may still control the economy, has no direct political control. It operates in a different political context; it has to use local agents, and this makes it more cumbersome for it than during direct political rule.

4.     Political independence, even if partial, is an important stage in the fight against imperialism. The common people are brought into the democratic process directly. Political parties are formed to vie for power and they have to reach out to the people for votes. Elections are regularly manipulated by political leaders and the empire. Nonetheless, people continue to demand “free and fair” elections.

5.     Above all, political independence exposes the internal class contradictions - class oppression and class struggle - more clearly.  The danger is that these are then seen as the “principal” contradictions which the empire continues to exploit and use for their own ends.

More than a quarter century since political independence, South Africa is still a neocolonial state. Its economy is still, for all intents and purposes, under the control of the empire.  South Africa has not liberated itself fully.

So the struggle continues.

A luta continua

The next phase of the battle for liberation has to be fought at three levels: the ideological; the state and economy; and the global. All three are interconnected and contested terrains. Also, at all the three levels the battles are concrete expressions of the history and contemporary circumstances of South Africa. This said, it is also important to learn from other experiences – especially from countries in the global south that are fighting against capitalism and imperialism. It is risky to generalise, for the battles at all levels are complex; so in this essay we can only talk in general terms.  The actual strategy and tactics can only be worked out by people in South Africa in their ever changing circumstances.

At the ideological level

The ideological battle is on a “mixed terrain” in the sense that every major combatant will have its own ideology, and this will be contested by others – and, to make matters worse, even within its own terrain. Within the capitalist camp, for example, the ideological battles on economic theory are fought – in the main - between the orthodox neoclassical diehards represented by the World Bank and the IMF, and the heterodox neo-Keynesian social-democratic reformists.[3] These ideologies have their representatives in South Africa at various levels - in the state, among the academia, in the media, in political parties, and even amongst the trade unions.

Besides the intrusion of imperialist ideologies within the ranks of the working classes and the petty bourgeoisie, there are other forces also at play at the grassroots level which is fragmented along ethnic, religious, regional, gender and other factions. The debates between and within each faction can get extremely complex, and largely beyond the reach of ordinary people. Earlier, we discussed how this has happened in the discourse amongst the left triggered by the sacking of Gordhan as finance minister and his replacement with Gigaba who appointed Malikane as his adviser.  We referred to how Malikane’s views on nationalisation came under fire from a section of the left led by SACP’s Jeremy Cronin.  Malikane was then deftly defended by Oupa Lehulere.[4]

These are important debates, but in my view, the polemical style is distractive and potentially divisive. Some of us from Uganda had a similar debate in the 1970s, the scars of which lasted for quite a while. Importantly, what emerged from our debate was the central question of who is the principal enemy of the people of Uganda. Looking back to the 1970s and our own experience in Uganda I would say that the empire (the USA, the European Union and Japan) is the principal enemy.  We do have many divisions and contradictions amongst the people, but following Mao, we argued that these contradictions are “secondary” to the “primary” contradiction with the empire.

Following this, the view of the leaders of the government of the Uganda National Liberation Front (UNLF) was that we must resolve the internal secondary contradictions amongst the people in order to face the principal enemy on a united front. The UNLF government lasted only one year and was ousted in May 1980 by a military coup.  From then on – now 37 years – Uganda is torn apart by the secondary contradictions, and the empire is laughing all the way to loot Uganda’s resources at the cost of the millions who live in poverty and despair. 

My analysis above leads me to conclude that this is true also of the South African situation.  For over a quarter century the people are paying the price of ideological cleavages among the left – including between and within the political parties and the trade unions.  Clearly, there is no vanguard party or leadership in South Africa to unite the people on a single trajectory of the “second” liberation from the ideological stranglehold of the “development” paradigm of the neoliberal agenda.

In follows  that the South African political leadership at all levels (state, parliament, political parties, the trade unions, the media and the academia) need to set aside their contradictions, and bring all democratic forces together to unite against a single enemy, just as they had done during the first phase of the struggle against the Boers.  This is much more challenging, but the absence of a vanguard party makes the challenge even more daunting.

At the level of the state and the economy

Given that the South African state and economy is “captured” by the empire, it is important to identify the comprador elements within the state and the economy that service imperialist interests, and to assess the degree of their control over policy. My guess is that these number no more than a couple of thousand individuals.

We noted earlier that at independence the empire had thrown baits to a tiny minority of African entrepreneurs, followed by the government’s BEE (Black Economic Empowerment) project. This has not changed the fact that the economy is still in the hands of imperial capital. Even the Old Mutual, to take one example, that was initially created out of workers’ savings was “demutualised”  after independence, following which it migrated to the UK and became a part of imperial capital. Indeed, most of the large properties in Johannesburg and other large cities, banks, insurance and shipping companies, export and import companies, mining and large estates are still owned by global finance capital.

Instead of analysing these in concrete detail, the left in South Africa are engaged in what I consider to be a futile debate on whether the state is captured  by  'monopoly', 'white', 'largely white', 'overwhelmingly white', 'majority white', or the 'established monopoly capital'. This is a futile debate unleashed by Cronin’s attack on Malikane. (Malikane, after all, was only expressing his personal opinion). Of course, I don’t think Malikane’s prescription of nationalising South Africa’s resources can be officially implemented without provoking a major counter-attack by imperial capital, as indicated by the reaction of the global financial credit and investment markets. Malikane is correct that the resources should be owned by South Africa, but for that to happen there is need for a concrete strategy – a phased strategy with sophisticated tactics - to lead the masses.  The GEAR, ASGISA, and now NGP are all neocolonial macroeconomic blueprints, not plans for the liberation of the nation.

And this leads us to the third level – the global.  Political independence, despite its shortcomings, has opened the space for South Africa’s leadership to interact with forces outside the control of the empire.

At the global level

This is a vast subject that needs an entirely separate treatment. However, some salient issues might be upfronted here for further discussion.  

It should be clear to any objective observer of the global geopolitical scene that there is a fundamental shift in global economics and power politics.

To start with, the west is in the middle of a deep crisis, worse than the crisis of the 1930s. This crisis cannot be explained by the mainstream economistic concept of “cyclical” ups and downs of the economy. The crisis is structural and systemic.  In the United States the so-called “deep state” is fighting hard to hold on to its turf under attack by President Trump.  The Republicans and the Democrats are in a state of siege and, together, are fighting Trump with the help of “the Establishment” that includes the media.

Europe is fragmenting, starting with Brexit. And there are other proto-nationalist movements in the rest of Europe that have challenged the legitimacy of the undemocratic institutions located in Brussels. The only thing that holds the West together is the North Atlantic Treaty Organisation (NATO). But in order for NATO to survive, the West needs to “invent” enemies - North Korea, Iran, Yemen, Russia, China and others. With American and NATO military encirclement of the whole world, the Western governments make their peoples feel as if it is them in the west that are beleaguered!  It is simply incredulous.

There used to be a group called G7 (consisting of the USA, UK, Germany, France, Italy, Japan, and Canada) with the ostensible purpose of stabilising the global system. At one point it invited Russia to make it G8. But this did not work out. G7 is now replaced by G20 – a concoction of the West in recognition of the fact that it must adjust itself to a new reality – that of Russia and the emerging countries of the global South. Germany holds the G20 presidency for 2017. The ostensible objective of G20 is to support private investment, sustainable infrastructure, and employment in African countries, as well as contribute to the AU Agenda 2063 – called the “Compact with Africa” which Germany spearheads. Its real purpose is to recover the economic and political ground that Europe and America have lost in Africa.[5]

China is steadily taking over the command of the global economy. Its "Yī Dài Yī Lù” (“One Belt, One Road”) project is a daring and ambitious project with two “roads”- the land-based "New Silk Road", and the Maritime Silk Road. The routes will cover vast areas of Central and West Europe, as well as Asia and Africa, opening doors for China’s trade and investments. China has adopted capitalism, but has adapted it to its own needs and circumstances learning from over 3,000 years of history and the Maoist revolution. China has advised African countries to choose their own path to development.  China now favours a free movement of goods and capital, but is very protective of its own industries and technology (in which it is fast catching up with the West), and careful about free movement of services. China talks about “economic globalisation”, not “neoliberal globalisation”. At the 2017 Davos conference, President Xi Jinping delivered a well thought-through, clever speech, basically saying that China is not ready to take up world leadership, but it may be forced to do so because it was clear that the United States and Europe do not have the material and moral capacity to lead anymore.[6]

I can go on and on.  South Africa (and the rest of Africa) have benefitted from having China (and Russia) to counter 500 years of western hegemony. South Africa should learn from China whilst, also, maintaining a strong negotiating position with China, especially on investments. South Africa is the only African member of G20, but is acting in a servile manner in relation to its dominance by the West. China, too, is a member, but it knows its limitations and is ploughing its own furrow independent of the G20.

Concluding thoughts

Let me summarise and gather the main points of my thoughts.

1.     South Africa is still a neocolony – now in its second phase. South Africa's first independence struggle was waged by the Boers. The first neocolonial state lasted from 1910 to 1994.

2.     South Africa is now in the midst of the second phase of liberation – this time from imperialism. Political independence from the Boers was an important stage in the fight against imperialism. The common people are brought into the democratic process directly. Political independence, whilst partial, has heighted the level of contradiction between imperialism and the people. Political parties are formed to vie for power and they have to reach out to the people for votes. Elections are regularly manipulated by political leaders and the empire. Nonetheless, people continue to demand "free and fair" elections. That’s good.

3.     Who owns capital in South Africa? It is still primarily in the control of imperialist global corporations. The BEE (Black Economic Empowerment) project has failed to create (and cannot create) “national” capital. Thus, imperialism is still the principal enemy of the people. The empire, though it may still control the economy, has no direct political control, and has to use local agents in state and economy. These are “compradors” – about 2,000 in all.[7] Through them the empire is exploiting labour and the natural resources of the land.

4.     Immediately after independence from the Boers in 1994 the masses were politically demobilised; their remobilisation has only just begun. I would put the date to Julius Malema’s rise to express the frustrations of the youth and the masses.[8]

5.     The ruling political elite lack ideological clarity; they are still under the ideological stranglehold of the neoliberal paradigm of “development”. This is chocking the economy and the people.

6.     However, there are positive developments at the level of global geopolitics. The west is in deep economic, political, and moral crisis. The rise of China and Russia has opened space for South Africa (as also for other countries of the global south). The G20 is part of the imperialist agenda. South Africa, as its only African member, should put forward the demands of the people of Africa, and not be subservient to the west.

7.     There is obviously no vanguard party or leadership, and this enables the current political elite to “play politics” with secondary contradictions amongst the people. The absence of a vanguard party makes the challenge of uniting the nation to fight against imperialism in this second phase daunting. I fear it is going to be long, long, struggle without a vanguard party.

@ Yash Tandon

End notes

[1] I have a long-standing very personal and political attachment to the struggles in South Africa, as also in the future of our people in the whole region. I am from Uganda, and together with other comrades from Uganda, Kenya, Mozambique and Zimbabwe, as well as South Africa, we were guests (as asylum seekers) of Mwalimu Nyerere in Tanzania during the 1970s. Among them were comrades from the ANC, the PAC and the Black Consciousness Movement (BCM). We were fighting our own separate battles (in our case against Iddi Amin), whilst also engaging with one another in debates on how the continent might liberate itself from imperialism and racism. During that period and in the 1980s, I have been visiting South Africa through underground routes organised by the comrades in South Africa. In 1997, I founded a non-governmental organisation called the Southern and Eastern African Trade Information and Negotiations Institute (SEATINI) that has a virtual office in South Africa.

[2] See: Kwame Nkrumah, (1965) Neo-Colonialism, The Last Stage of Imperialism. London, Thomas Nelson & Sons, Ltd.

[3] See: Erik Reinert, Jayati Ghosh and Rainer Kattel (eds.), Handbook of Alternative Theories of Economic Development, Edward Elgar, 2016

[4] See: Oupa Lehulere, “Cronin & Company Harness Marxism to the Service of White Monopoly Capital”, Khanya College journal, No 36, Special edition, April-May 2017. http://khanyajournal.org.za/cronin-company-harness-marxism-to-the-servi…

[5] For a more detailed analysis, see my paper “G20: the second Berlin War against Africa”, Posted on July 13, 2017. http://yashtandon.com/g20-the-second-berlin-war-against-africa/

[6] For President Xi's speech to Davos in full see: https://www.weforum.org/agenda/2017/01/full-text-of-xi-jinping-keynote-…

[7] “Comprador” is a term initially used by the Chinese Communist party to describe people who act as agents of the empire engaged in trade, investments and politics.

[8] Julius Malema was president of the ANC Youth League from 2008 to 2012. In 2013 he founded the Economic Freedom Fighters, to contest elections against the ANC.