The State, Property Relations and Social Transformation

A Discussion Paper towards the Alliance Summit
Umrabulo No.5, 3rd Quarter 1998


The document entitled, The State and Social Transformation initiated welcome debate in the ranks of the NLM about the role of the state in the current phase of the NDR. The theses it propounded were further developed in the discussions at the Alliance Summit of 31 August 1997. Over this period, the various partners in the Alliance have elaborated their own positions on this issue, as reflected in the Strategy and Tactics document of the ANC, discussion documents of the SACP in the build-up to its 1998 Congress, as well as the resolutions and discussions at the last COSATU Congress.

This document seeks to build on these discussions in the context of the current phase of the NDR. For the history and relationship between the apartheid state and capital, reference should be made to The State and Social Transformation. This discussion document seeks to take these discussions forward, with emphasis on understanding state power and its various loci and the issue of the centrality of capital in the process of transformation. The document forms the first part of a discussion on the tasks facing the state; and it should serve as a basis for elaborating a concrete programme of action on the transformation of the state.

The strategic challenge of the current phase is to transform South African society to become truly non-racial, united, non-sexist and democratic. The question then is the power that the NLM commands to lead this transformation and the role of the state in this regard. While emphasis will be placed on the latter, it should be underlined that a critical element in this process is the active participation of the people as the drivers of change. This requires leadership by the ANC and the NLM in general and a vibrant civil society. Reference to social and other relations includes gender relations.

Strategic Objective of the NDR

The ANC's Strategy and Tactics document adopted at the 50th Conference defines the strategic objective of the movement as being "the creation of a united, non-racial, non-sexist and democratic society. This in essence means the liberation of Africans in particular and black people in general from political and economic bondage. It means uplifting the quality of life of all South Africans, especially the poor, the majority of whom are African and female."

The S&T document however recognises that there are limitations regarding the extent to which the NDR can go in resolving the contradictions within society. It asserts that "the creation of this new society will not eliminate the basic antagonism between capital and labour. Neither will it eradicate the disparate and sometimes contradictory interests that some of motive forces of the NDR pursue." And, in this regard, it concludes that "the task of the NDR is to eliminate the basic causes of the national grievance wherever and in whatever form they manifest themselves, and to manage the multitude of contradictions within society in the interests of this objective. Indeed, as we succeed in doing so, new social dynamics will play themselves out, redefining the challenges of the given moment as well as the political permutations that are consonant with the new challenges."

Arising from this are two interrelated questions which form the basis of the NLM's approach to transformation. Firstly, political power is not attained for its own sake, but to pursue given political and socio-economic objectives. As such, the state is not a neutral, non-partisan entity; but it is an instrument that is used to pursue the interests of a class or group of classes. Secondly, the battles around political power are in the final analysis about socio-economic resources and their allocation. Thus, at the core of any revolution is the issue of property relations: how classes or groups relate to capital in particular and resources in general.

The ANC is a multi-class organisation representing the interests of forces that were participants in, and broadly stood to gain from the victory of, the NDR: black workers, the black middle strata, black business in its various ramifications, the rural poor and others - all to varying extents denied opportunities under apartheid. All these classes and strata share a common interest in the advancement of the cause of social transformation. Yet, as the ANC's Strategy and Tactics document acknowledges, their interests, within this broader framework, converge and diverge. This is because the NDR is not aimed at resolving the central question of property relations: it does not seek to create a classless society. Rather the NLM aims to reshape these property relations in line with its non-racial and non-sexist principles, and at the same time to configure them in such a way that they serve the interests of the overwhelming majority of the people, most of whom are poor.

Defining The State

An understanding of "the state" needs to take on board the various forms of usage to which the word has been subjected. There is the concept of a nation-state (or many-nation state), which defines the state as a polity in relation to others. Included in the definition is the geographic entity and its integrity, the government in the sense of the political representatives, the machinery to maintain this integrity and civil order, the rules to attain this and the social relations obtaining in a given historical period. Other definitions narrow it down to the political institutions and the "state machinery"; whereas yet others confine it to the latter. For purposes of this discussion the second definition is used, with the understanding that the state represents class interests and therefore it is part of, and a player in defining, social relations.

It follows from the above, but should not always be assumed, that the state as the overarching social organism, does not sit in a perch above society as such. To the extent that it represents class interests, to that extent does it reflect social dynamics within these classes. To the extent that it circumscribes other class interests, to that extent does it position itself in relation to the dynamics within such classes. Further, the state is not the only terrain where class interests find expression, nor is it capable of reshaping class relations all on its own. In the broader sense, the concept of power should be interpreted to include relations in the work-place, in the home, in the schools and religious institutions - indeed everywhere where social life plays itself out. Yet, as a concentrated expression of social relations, as an institution wielding enormous power and resources, the state is for this reason the most critical area of contestation among classes: transfer of state power is thus characterised as the most visible and critical expression of a revolution.

The state guarantees and regulates property relations and rules of political, economic and social engagement in society. In doing so, it promotes specific social interests. Therefore, it should in its composition and outlook reflect these interests, and afford the classes and strata it represents the wherewithal to carry out their objectives.

Characterising The South African State

How do we then characterise the South African state in the current period?

The achievement of democracy has ushered in a legitimate government based on a democratic constitution, with elected representatives as the main determinants of policy. The rules governing the new society derive from a democratic constitution which contains universal principles of democracy and human rights and makes progressive reference to the issues of social rights.

However, while these principles find formal expression in the constitution, the new legal framework and doctrines, the instruments of state such as the army, police and judiciary remain largely in the hands of forces that were (and some still are) opposed to social transformation.

The implication of this is that the South African state skill has to reflect - in its composition, practical realisation of doctrines, and broadly the capacity to carry out its multi-faceted functions - the social classes and strata that pursue social transformation. In other words, much transformation of the state itself is still required for it to become a true representative of the classes and strata that have brought about democratic change. Currently, ours is a state in transition.

Central to the issue of the role of the state is the question of public resources and their utilisation. Thus an important indicator of control of state power is the capacity or otherwise to set rules for, or actually determine, the accumulation and employment of capital. Indeed, the current state is restructuring the budget in line with the objectives of the new ruling bloc; it is restructuring assets in the hands of the state along the same lines; it is setting out the framework within which capital is accumulated and allocated through measures such as Competitions Policy, Labour Legislation, Procurement Policy and so on. But there are many constraints given the composition of the state machinery; the shortage of resources; the complexity of the operations of modern capitalism; and the effects of globalisation.

An important element in any social transformation is the capacity of the forces undertaking the process to exercise hegemony of ideas. As in other areas of transformation, this remains a contested terrain; not only within the context of the role of the state; but also from the point of view of whether the progressive movement is able to set the agenda - whether its ideas are the "dominant ideas" within society as a whole.

In the overall, the kind of state that the NLM is building is one in which the democratic forces have the capacity decisively to use state instruments for purposes of social transformation. Twin challenges arise from this: firstly, the need continually to shift the balance of forces within the state and in broader society in favour of the movement for transformation; and secondly to use the power that the democratic movement currently commands to implement thoroughgoing changes. These tasks are not sequential but mutually reinforce one another in the same time and space.

Transforming the State Apparatus - Increasing the Power of the NLM

As The State and Social Transformation explains, we have inherited a state which was illegitimate and structured to serve the interests of a white minority. To perpetuate itself, the apartheid state had to rely on repression on a massive scale, as well as an aggressive policy against its neighbours. It also used public resources to try and buy off a collaborative stratum from among the black majority. The apartheid state even went to the extent of denying the territorial integrity of the country in pursuit of its bantustan policy. To attain all these and other objectives, it became the seedbed of corruption and criminal activity both within the country and abroad. The apartheid state subverted all sensible social rules and mores - it was the Headquarters of the South African crime against humanity.

The NLM cannot therefore lay hands on the apartheid state machinery and hope to use it to realise its aims. The apartheid state has to be destroyed in a process of fundamental transformation. The new state should be, by definition, the antithesis of the apartheid state. It is legitimate and serves the interests of the overwhelming majority. It is based on a democratic constitution, a culture of human rights and maximum openness. It seeks to use public resources to better the lives of the majority, especially the poor. It is determined to root out corruption and criminality; and it does not rely on buying off sectors or groups to win their allegiance. It pursues the interests of the motive forces of change; and it strives in many respects to become a state of the whole people.

Transformation of the state entails, first and foremost, extending the power of the NLM over all levers of power: the army, the police, the bureaucracy, intelligence structures, the judiciary, parastatals, and agencies such as regulatory bodies, the public broadcaster, the central bank and so on. This is not in contradiction to the provisions of the constitution which characterise most of these bodies as independent and non-partisan. Control by democratic forces means that these institutions should operate on the basis of the precepts of the constitution; they should be guided by new doctrines; they should reflect in their composition the demographics of the country; and they should owe allegiance to the new order.

If we are correct in characterising the state as an important terrain for the expression of class dynamics within society; and if the assessment that we have not as yet attained all levers of power is accurate, so should it follow that those who serve the interests of the old order will resist change both from within and outside the state. The democratic movement should therefore have a coherent and systematic strategy to change this state of affairs. To illustrate: in these four years of democratic government, what have we done to train and deploy personnel in strategic areas within the state - positions in the security forces and the bureaucracy such as pilots, air controllers, immigration of finials, finance management and information technology!

Where this has happened, has it not been an incidental consequence of ad hoc management? Have we often not allowed ourselves to be distracted by the shallow protestations of the Opposition backed up by the media? Have we been sufficiently open with the people about the problems we face and the challenges that lie ahead or have we reinforced the false impression that "we are fully in charge"!

Some of the questions that will need to be addressed as part of a practical programme of action; and the relevant balances that will need to be struck are:

  • We need to review progress in the elaboration of the new doctrines that should guide each state organ. This should be pursued along with the task of changing the composition of these state organs as illustrated above. Further, systematic preventative and contingency measures should be worked out to deal with counter-revolution. This should include measures aimed at thwarting attempts aimed at establishing "a parallel state" in the form of private security companies, parallel intelligence agencies and so on.
  • Defining the size of the state and its various organs in line with its new tasks is the other challenge. Unlike the apartheid state, the NLM cannot rely for its political sustenance on patronage and a callous disregard of public resources and the needs of the poor. Nor can the NLM sustain an approach that perpetuates payment for work that is not done by continuing to have in its salary bill "supernumeraries". The democratic state should in principle handle public resources with respect and a sense of responsibility. This includes ensuring that public resources allocated for specific purposes actually reach the intended beneficiaries.
  • The resources in the hands of the state should be expanded on an on-going basis, primary among which sources should be a growing economy. A concerted campaign around the issue tax morality; efficient management of public resources and a ruthless campaign against corruption; a rigorous system of monitoring re-prioritisation within departments and agencies with appropriate penalties for defaults at all levels; and other such measures are required.
  • In addition to this, the issue of defining fiscal deficit targets needs to be further debated. On the one hand, the principle that the democratic state cannot rely on borrowing to meet its social deficit is both economically and politically sound. Arguments in favour of this include the sustainability of development, the global terrain in which we operate, the ripple effects of large deficits on most other indicators which impact on the poor such as inflation and high interests rates and so on. On the other hand, an approach, to paraphrase the State President, of behaving like fools who cut their noses to spite their faces - to cut services to the poor in pursuit of fractions of deficit targets - is suicidal both economically and politically. A proper balance has to be struck between the two extremes. In brief the state has the task of maintaining the necessary macro-economic balances, not for their own sake, but in the interest of sustainable development.
  • Transformation of the state also means a clear programme to restructure state assets in the interest of development which favours disadvantaged sectors of society. This requires, as has been resolved in the National Framework Agreement, an approach that is not premised on rigid dogma; but a case-by-case assessment of the pros and cons of particular actions in the short and long-term; as well as conduct that benefits workers, black entrepreneurs and society in general.

These then are some of the areas that will require further programmatic elaboration. In the overall, the NLM is committed to a strong and efficient state that is tenacious in its loyalty particularly to the poor. Transformation of the state is not synonymous with the dismantling of the state, rendering it irrelevant or redefining its role in such a way that the democratic movement ends up with a diffuse system of social cohesion and coercion. This type of anarchic approach, reflecting suspicion of state power per se, which hides behind declarations about the importance of civil society, can be as destructive as the neo-liberal agenda that seeks to transfer the power of the state to the private sector. At the same time, an instrumentalist approach to state power, which sees the state as the all-powerful instrument protecting and delivering to a passive populace can be as dangerous because it leads to the demobilisation of the motive forces of change. Further, in our situation, the issue of division of labour among the various spheres of government - national, provincial and local - may in time have to be revisited in the light of concrete experience.

The Centrality of Capital and Property Relations

The emphasis above on the issue of capital and resources derives from the understanding that economic relations are at the centre of social transformation. The saying that politics is a concentrated expression of economics should serve to remind us of who we are and what we are about.

In the final analysis, one of the basic objectives of the NDR is to transform property relations: to redefine the relationship that individuals, sectors and groups have to capital. The NDR does not aim to reshape property relations in the most fundamental way of creating a classless society where there are no exploiters and exploited. It does not seek to eliminate capital and capitalism. However, by definition, the NDR must see to the de-racialisation of ownership, accumulation and allocation of capital; and it should do this in a manner that benefits the poor.

What then is capital? For purposes of this discussion, capital is defined in a broad sense to include resources in private hands, within the state and in the hands of the public in general. These resources are used for productive purposes, speculation, social services and other activities. How the democratic forces and their state regulate this capital; how they utilise what they possess; and how they restructure the relationship of various sectors of society to capital is the central question of the democratic revolution in this post-1994 phase.

This arises not only in the context of the broad issue of economic power raised above; but also because our revolution takes place in an epoch in which the most critical battles for multifaceted hegemony play themselves out in this terrain. While the threat of counterrevolution which trains its "guns" on state power per se is real; the more strategic contest is taking place beneath the superstructure: it is about the ownership and control of resources and the freedom of the state and the classes it represents to regulate and manage the accumulation and allocation of capital in their own interest. This includes capital flows and the question of investor confidence; it includes manipulating factors that affect the value of the currency; it includes struggles around issues of procurement; it includes battles on the freedom of state lending institutions to pursue policies that encourage productive investment and are, naturally, seen as undercutting the profits of big financial institutions; it includes the contest around the savings of the poor; it includes the endless crooning about the so-called "lowering of standards" in social services; it includes pressure around the question of privatisation. Related to this are the activities of trans-national crime syndicates whose activities, including money laundering and drug trafficking, by definition thrive in a situation in which the state is weak.

As in other colonial countries, South African capitalism evolved in a skewed manner. On the one hand, it emerged on the foundation of mineral extraction and relied heavily on this for many decades. On the other, it was founded in the tradition of big imperial companies and later Afrikaner capital which speedily developed, or was co-opted, into the courtyard of monopoly capital. The development of a manufacturing base especially in the 1950s and 60s was underpinned by the large mining houses, along which had emerged a financial sector which was part of the same circle. The state also became an instrument to accumulate, utilise and allocate capital in the interest of the white community in general and the white Afrikaner sections in particular. The farming sector and small and medium enterprises among whites were also in the main beholden to an evolving state monopoly capitalism. Their growth and successes were achieved in the same measure as any real or potential accumulation in the black communities was suppressed.

The economy in our country is thus characterised by a highly centralised and concentrated system of ownership, overwhelmingly in white hands. The entry of blacks into the monopoly sector has not started to dent this. The same applies in large measure to SMME's. Over the years, the growth of the black section of the working class and, in a limited way; the middle strata has created an army of savers who by sheer numbers have become a significant though largely latent force in the financial terrain. There are also many new trends including the mergers among large financial institutions and, as with the mining conglomerates in the 1980s, movement towards their positioning internationally as global players. South African capital can thus be disaggregated as follows:
  • large private conglomerates in the productive and financial spheres;
  • large institutional capital such as pension and provident funds, most of it located in the above;
  • state or public capital in the form of parastatals and the fiscus itself; and
  • small-scale community and co-operative/social capital.

The NDR, The State And Capital State and Private Capital

What then is the intervention expected of the state in relation to capital and property relations? To recapitulate, this can be summarised as de-racialisation in a manner that serves the interests of the poor. A corollary of this is that the NDR and the state presiding over it coexist with private capital at the same time as they reconfigure the relationship of sectors of society to private and other forms of capital. A dynamic of engagement, identification and promotion of mutual interests, and consistent struggle characterise the relationship between the state and private capital. It is in a sense a case of the unity and struggle of co-existing opposites.

An important element of the tasks of the state is ensuring that the glass ceiling of apartheid is removed from above the aspirations and ambitions of the black middle strata and capitalist class. In a systematic way, the NDR has to ensure that ownership of private capital at all the levels tabulated above is not defined in racial terms. Thus the new state - in its procurement policy, its programme of restructuring state assets, utilisation of instruments of empowerment, pressure and other measures - promotes the emergence of a black capitalist class. Yet if this were to be an end in itself it would be a sure way to abort the NDR. While these forces are direct beneficiaries of the NDR and share an interest in its advancement in the current phase, they can easily be co-opted into the agendas of their white counter-parts; and they can easily also become a source of corruption within the state. ANC leadership of these forces is therefore critical.

The unity and struggle between the new state and private capital express themselves partly in the form of the regulatory and guiding role of the state. Three interrelated functions emerge from this:

  1. The state is interested in, and promotes the involvement of, private capital in the expansion of the economy; and it seeks to guide owners of this capital towards projects that create jobs, expand or initiate specific industries that contribute to development, exports and so on. An economy that grows in a focused way helps the process of redistribution by means of taxation, job creation, improvement of services, and human resource development. At the same time, the private owners of capital are able to make profit and therefore gain from "unity" with the new state.
  2. In order to ensure that the economic system functions in an orderly way, in its task of promoting the interests of its mass base, and in order to obviate and contain market failures, the democratic state utilises a range of regulatory mechanisms. Competition policy; legislation on equity, labour relations and skills development; legislation and regulations on the operations of the stock market; consumer protection measures; taxation laws and others form part of this rubric of supervisory and regulatory functions of the state in relation to private capital. To the extent that this limits the rapacious licence of capital, this constitutes an element of "struggle" between private capital and the state.
  3. The state, the NLM and progressive civil society in general are critical in defining the terrain of discourse around matters of ideology and economic policy. To the extent that the relationship of unity exists between the state and private capital, to that extent will the latter try and co-opt the NLM to its own agenda. To the extent that there is struggle between the two, to that extent will private capital use its positions of power with regard to the media of discourse to undermine the new state. Therefore, battles around issues of ownership of media, distribution and transmission channels, diversity in the media houses, and generally access to information and media of communication by the majority of the people are critical to social transformation.

State Capital and Resources

The state relates to capital in the broader sense not as an outsider peering over what is otherwise a private and exclusive terrain. It is itself an owner of huge resources in the form of public corporations and the fiscus. Indeed, a failure to define in very clear terms the strategic interventions that the state can make to the evolution of property relations through public resources would spell doom to the transformation project:

  • The redistributive function of the fiscus encompasses programmes to meet social needs, including a welfare safety net and human resources preservation and development. Besides the question of the balance between the budget and social deficits referred to above, a critical question of the paradigm of such redistribution needs to be examined. On the one hand, it is unavoidable that, with such programmes as welfare and maintenance grants, UIF and others, the state disburses resources to an individual citizen. Yet, is it correct that state resources - capital in state hands - in an area such as housing should be used primarily to promote individual exclusive ownership without some form of social partnership? What then happens is that state capital is parcelled out into individual and ineffectual capital without accompanying social responsibility. The same could be said about an attitude to Public Works Programmes - again capital in the hands of the state - as an alien entity to which communities relate as workers demanding a living wage and better working conditions. In what ways can such capital, in housing, public works and other areas be transformed into community social capital which communities can together utilise for their collective benefit?
  • Capital in the hands of the state also relates to the ownership of assets and the restructuring thereof. This includes efficiency, redefining the role of the state as the sole or main shareholder, directing these enterprises towards RDP objectives, changing management composition and practices and so on. The capacity to use these entities to make critical interventions in the broader operations of the economic system is one indicator of the orientation of a particular state. In transport, telecommunications, energy and other sectors, state ownership is meant to serve a particular facilitating and servicing function. Some of the areas relate directly to issues of state security. As indicated above, our approach to the issue of state ownership is not guided by dogma. Yet we should also consciously guard against denuding the democratic state of the little capital it has, allowing private companies to undermine public corporations such that we end up with a country's strategic areas regulated and run by the private sector.

State and Finance Capital

An area which forms the bedrock of property relations; which helps to define the direction of development or whether there is such development at all is the financial sector. It is subject to debate whether the NLM has elaborated an adequate framework, let alone a programme, to address this area.

Firstly, the role of state lending institutions is critical in ensuring that inadequacies of the market are addressed both in terms of areas of investment and development of SMME's. Related to this are funds set aside by the state to promote specific projects such as Umsobomvu Fund, Poverty Relief Fund, and the spectrum of resources to assist black entrepreneurs. To what extent have we allowed the private banking sector to limit the space within which particularly the state lending institutions can operate?

Secondly, there has been a level of disjuncture in the manner in which monetary policy and the broader programmes of economic revival and development have been handled. This is a matter that requires urgent attention, without undermining both the independence of the central bank and the need for macro-economic balances.

Thirdly, little attention has thus far been paid to the private allocative sector of capital and any regulation that may be necessary. Thus South Africa evinces a contradiction of massive proportions: envied by other developing countries for the huge financial capital base it commands, but least able to ensure some rationality in the allocation of this capital, particularly for productive purposes. The tendency within the NLM is sometimes to propose solutions that would be way out of line with current realities, such as punitive taxes. Yet as dangerous a tendency is to be so awed by finance capital that we throw the NLM prostrate in front of this sector as if in pagan prayer.

Social Capital

In rudimentary form and as yet not defined in a systematic manner is the social capital that resides and circulates among communities. Stokvels, burial societies and others command significant resources given their environment. Under-developed and with little formal backing, this capital is either co-opted by large financial institutions or, at best, destined to lose value in trunks and under mattresses. Most critically, it should be noted that the social forces which participate in these schemes are also the same forces which have provided the insurance and provident funds with the billions used for speculation on the stock exchange. The emergence of investment and allocation strategies by the trade union movement, using such capital, is a major advance that should be utilised for strategic purposes. It is to be appreciated that at least COSATU has started to debate the allocation of such capital and the strategic implications of such decisions.

Of what significance can the alliance or pooling among state capital, the various forms of social capital, and these institutional funds be in the balance of property relations? This requires its own research. But what can be asserted without fear of contradiction is that such an alliance will help ensure that the state and civil society do not only de-racialise private capital; but also start to strengthen, in the interest of the working people, a new set of property relations that help to redefine the social terrain.

Towards an Understanding of a Developmental State

The totality of the measures outlined above, and the very strategic objective of the NLM, imply that we are pursuing the kind of state whose character is developmental. Development is about improving the quality of life; it is about equity and justice. As the RDP document asserts, development entails a growing economy in which redistribution is a critical element; it includes modernisation of the productive forces and a redefinition of production relations. It includes the preservation and development of human resources in the form of skills-training, job-creation and the provision of education, health services, infrastructure, an adequate social security system and so on. It is also about democracy and popular participation.

A developmental state therefore should be founded on principles of democracy, justice and an abiding culture of human rights - conditions which afford people not only the right to benefit from activities of the state, but also to take active part in improving their lives. This requires, among others, a culture of openness in the operations of structures of government and the machinery of state. It obliges the state to ensure that the citizens are informed of policies and activities of government, and that they themselves take part in their formulation and implementation. It also requires political and civil society organisations and institutions which are accountable and in constant touch with the people.

A developmental state should use the resources that it commands to ensure redistribution of wealth in the interest of the poor and disadvantaged. It should put in place regulatory and other mechanisms that not only seek to obviate market failure, but also afford the state the capacity to intervene in a pro-active way to facilitate growth and redistribution. The fiscal and monetary policies it pursues should not only be mutually consistent, but also help facilitate its prime objectives.

A developmental state however does not benefit only the poor and disadvantaged. Growth and development require capital investments; and these reside primarily in private hands. Therefore, a developmental state has to define and regulate its interaction with private capital in such a way that mutual benefit can be derived. This includes an industrial policy that helps to direct private capital into critical sectors; and a labour market policy that prevents super-exploitation and encourages skills development and work-place democracy. It includes offering aspirant black capitalists opportunities which in fact encourage the expansion of this class. A developmental state should also be able to strike the correct balance between state ownership of productive forces and private ownership, guided, inter alia, by the prerogatives of strategic interest, efficiency, technology-transfer, affordability of services and narrow cost-benefit considerations.

Leadership and Mass Participation

A developmental state prioritises the interests of those who are in need of development - the poor and disadvantaged. It is therefore a state which should reflect, in its composition, doctrines and culture, the classes and strata which stand to benefit from transformation. These forces should be in command of state power. They should be in the driving seat of policy formulation and its implementation. What does this mean in actual practice?

In the "narrow political" sense, mass involvement - a people-driven programme - should derive from vibrant political organisation:

  • One expression of mass involvement is the election of public representatives on the basis of clear mandates; accountability of these representatives to their constituents; and together with the people identifying the priorities at local, provincial and national levels.
  • This implies the existence of an active political movement leading the process of transformation. Such a movement should exist in the people's midst; give leadership at the same time as it learns from the people; involve its members - who should in turn be in touch with people - in developing policies and priorities. It should be a movement that mobilises people to take up their issues, including campaigns of project prioritisation and implementation, mass action around given issues, and fore on matters such as policing and local development.
  • This also requires a style of work on the part of legislative bodies and state institutions which encourages input by civil society. Legislative public hearings, road-shows, consultation and partnership with interest groups, multi-purpose community centres, effective government communications, vibrant media supportive of transformation and other forms should afford CBOs, NGOs, communities, interest groups and individual citizens the opportunity to take part in or influence the formulation and implementation of policy.

In other words, people engage in social change through both "political" and "civil" forms of organisation. The latter includes sectoral organisation as workers, students, business, women, youth, professionals, community civic bodies as well as NGOs. All these forces should be mobilised to take up issues affecting them, and in various ways shape the content and direction of development. Whether this engagement becomes conflictual in relation to the state depends on policies and practices of the latter; but also on the political consciousness within these bodies. It is therefore a continuing challenge to the ANC as the leader of the process of transformation to ensure that these forces pursue their narrow interests within the context of the overall strategy of social change. Ideally, a developmental state and civil society should co-exist in a broad partnership of nation-building and reconciliation, reconstruction and development.

Through elections and participation in political structures an community fore, the people will help define the broad mandate of government, including legislation, programmes and projects. At local level, a more detailed engagement will be possible, including working out council budgets and priorities, identification and implementation of projects, collective ways of improving security, social services and so on. Through local fore and other means, both national and provincial structures will interact with communities and ensure that their interests are taken into account when policies are formulated and implemented. The importance of district "one-stop" government centres in this regard cannot be overemphasised. However, it cannot be expected that each and every detail of government work, within the broader mandate, will have to go through the channels of public consultation.

The same form of hierarchy of information and determination of mandates applies to party political leadership of governmental work. Conferences determine the broad mandate; and party political bodies corresponding to appropriate levels of government ensure supervision of the implementation of this mandate. Since 1994 conventions have been developing within the ANC and the Alliance. The overriding principle must be that there should be as thorough a sharing of information as practicable. This also requires structuring of meetings in such a way that such supervision can be strategic and not administrative. At the same time, room must be left for the governmental executive and the public representatives in general to exercise their prerogative and initiative in the realisation of the policy mandate.

It is in the nature of transformation that there will be various manifestations of counter-action by those opposed to change. Mass involvement is therefore both a spear of rapid advance and a shield against resistance. Such involvement should be planned to serve the strategic purpose, proceeding from the premise that revolutionaries deployed in various areas of activity at least try to pull in the same direction. When "pressure from below" is exerted, it should aim at complementing the work of those who are exerting "pressure" against the old order "from above". This challenge applies to all democratic forces, but it should also be posed particularly in relation to public sector unions who are at the coal-face of the challenge of restructuring the state.

However, to the extent that there will always be sectoral interests; to the extent that these interests - among the motive forces of change - may not always coincide; to the extent that immediate sectoral interests may not always serve the general interest; to the extent that the choice of the path to the common objective may not always be consensual; to this extent and more, will there be "contradictions among the people".

Who then mediates these contradictions? To identify the state as the mediator is misleading. The state is an instrument of transformation in the service of class interests, at the helm of which is the ANC and its allies. As such, the first port of call to mediate and manage these "secondary contradictions" should be the ranks of the political movement which in turn guides the state.

In the past few years, weaknesses in our structures and a tendency to be mesmerised by state power as a "thing-in-itself" has led to unhealthy tension in the relationship between the state and the political movement of transformation, the ANC and its allies. This requires rectification both at the conceptual level and in the hard slog of organisational reconstruction. It requires the elaboration of a programme of action by this political movement which mobilises the people to use all avenues open to them, including the elements of state power they command, for purposes of speeding up the transformation process.

The State and Challenges of Globalisation

Capital and labour have over the decades tended towards international deployment and solidarity. The constant search for cheaper labour, raw materials and markets have chased capital all over the globe. At the same time, the development of productive forces and capital's relentless pursuit of profit have spurred on the concentration and centralisation of production and wealth. In its wake, labour solidarity has, out of necessity, transcended industries and state borders. The tendency towards internationalisation is therefore a necessary product of capitalism and the fight against it.

In the past two decades, this process has been speeded up by the rapid development of productive forces in the form of the new technological revolution, the collapse of the Bretton-Woods Agreement, the consolidation of powerful transnational corporations, and the relaxation of trade barriers and impediments to capital flows. Combined with the collapse of the socialist bloc, this has led to the emergence of what is referred to as globalisation. As such, while political and ideological factors do influence the form and content of globalisation, the fact of internationalisation itself cannot be divorced from the very modernisation of productive forces which is at the centre of social development. Given the dominance of big corporations within and across national boundaries, and given their control of the process of technological development, domestic and international relations have tended to be defined in their terms.

With the collapse of Bretton Woods and the relaxation of barriers to capital flows, a new predatory form of profit-making has taken root in the form of speculation around currency prices, market shares as well as derivatives which have widened the gap between value and price (be it of capital stock or currencies or money itsel0. If in the past the bourgeois state blatantly represented the interests of private capital, today its enslavement is even the more pronounced, with its policies and actions beholden to the whims of owners of stupendously large amounts of capital which is in constant flight across stocks, currencies and state boundaries. More often than not, governments even in the most advanced countries assert their role in the economy merely by "sending signals to the markets", which they can only second-guess. If in the past, the Bretton Woods institutions (the IMP and the World Bank) and the World Trade Organisation pursued the same interests as these powerful corporations and governments, today their prescriptions are turned on their heads as "the animal spirits" sway moods in a set of motions that have no apparent rhythm or logic.

Yet there is rhythm and logic. It is the logic of unbridled pursuit of profit which has little direct bearing to production. It is true that free flow of capital in stock exchanges and banking operations does have the potential to encourage allocation of capital to the most deserving of productive enterprises. It can bring about market efficiency in the form of optimal allocation of resources. But it is precisely this principle that the trillions - lavished in speculation especially in derivatives - negates. Thus individuals with huge amounts of capital can beggar whole economies in activities that are distant from production.
In a world in which armadas and flotillas cannot be credibly deployed for purposes of political and economic dominance, the question can no longer be postponed whether such capital is being, or can be, used to pursue political agendas!

What this in fact means is that, in terms of the broad array of economic and social policy, information and even political integrity, the state has lost much of its national sovereignty. This applies more so to developing countries. While on the one hand they are called upon to starve and prettify themselves to compete on the "catwalk" of attracting the limited amounts of foreign direct investments (FDIs), they are on the other hand reduced to bulimia by the vagaries of an extremely impetuous and whimsical market suitor!

Can a developmental state survive, let alone thrive, under such conditions? The answer is, yes! The starting point should be that constructors of this concept should not live in a fool's paradise. They cannot pretend that they operate in an environment entirely of their own making. This requires an engagement with capital to extract as much benefit as possible from the technological revolution, comparative advantage in trade, pooling of markets and production possibilities, and prudent use of resources and conditions that they possess in abundance.

It means negotiating the myriad of international norms and regulations in such a way that elements that can indeed benefit the nation-state are exploited to the full. It also means that developing countries should collectively seek to influence current international economic relations to eliminate senseless beggaring by short-term capital flows.

What is of even greater significance is that many forces, both within and outside government, both in the developed and developing world, do appreciate the disadvantages of the dictates of multinationals and particularly the predatory nature of international financial capital. A significant sector of humanity is honestly searching for answers to these problems; and the ANC alliance is part of this global movement.
While eschewing a voluntarist approach to the pursuit of our ideals, we should be strengthened by the real needs and aspirations of our own people as well as the global search for forms of social and international relations that take on board the need to build a better quality of life especially for the poor, who in our country are in the majority.

In this respect, the following questions, among others, require attention:

  • For us, as any other developing country, the issue of regional integration and, on our continent, the African Renaissance is not a matter merely of ideological, sentimental or cultural preference. Nor is the principle of South-South dialogue. Both are an economic and political necessity. The programme that we pursue to attain these objectives should be systematic and purposeful: both to enhance the collective voice of these countries and to secure practical arrangements that are in their interest. What is patently clear is that, if sovereignty is being undermined by globalisation, developing countries and their allies do have an obligation to pool their own sovereignty.
  • The disaggregation of South African capital outlined earlier, has much relevance as a methodology in dealing with international capital. For a start, there is mutual benefit that can be derived from relations with productive corporations, large and small. Secondly, large amounts of capital in the developed countries that can be allocated for productive and developmental purposes - such as pension funds - reside in the hands of, or at least originate from, the working people. These are forces that have an interest in our growth and development. As the NISI succeeded in mobilising these forces for effective antiapartheid action in the past, so can they be mobilised today in pursuit of FDI and development.
  • The forces searching for a better world order include, to varying degrees, parties and movements that enjoy significant power in the developed countries. These forces, including in particular, members of the Socialist International, share most of our views regarding the nature of globalisation and how it can be tamed to serve the interest of development and poverty alleviation. In broad terms, many of their positions are similar to those of the working people and developing countries. Should we stay aloof from this movement (the Socialist International), hoping that we can continue to portray the ANC and the country as a unique island which is everything to everyone?

The bankruptcy of some of the precepts of world financial institutions is generating honest soul-searching among economists, politicians and others, including within the World Bank, the IMP and UNCTAD, as well as associations of developing countries. We should encourage, and become an active part of, this discourse. Our approach to should be premised on the interest of the poor and disadvantaged, not only in our own country but across the globe. As such we should seek to encourage creative solutions which go beyond the occasional doses of superficial prescriptions aimed merely at ensuring that capitalism survives another market crash. Rather we should urge for fundamental solutions that aim to harness the market in the interest of equitable world growth and development.

Conclusion - Practical Challenges

The issues raised above are aimed at helping engage the mind of the Alliance in refining its understanding of the challenges we face in the new terrain of struggle. It is critical that the ANC and its allies elaborate a programme to address, among others, the following issues:

  • The restructuring of the state, including issues of doctrines, deployment, optimal size and role, state expenditure and the budget deficit.
  • The programme of branches and members of the ANC and its allies in respect of the restructuring of the state and ensuring mass involvement in the process of social transformation.
  • Review South Africa's financial system and mechanisms of allocation of capital, to explore ways and means through which optimal systems can be put in place for purposes of growth and development.
  • Examine strategies for the most effective utilisation of capital that is owned by, or originates from, the working people, including pension funds, stokvels, resources in the hands of the state, and so on..
  • The programme for our country and movement to take active part in the efforts of developing countries to alleviate their conditions, as well as to influence international discourse on matters of globalisation.
  • The international alliances that the ANC should join or initiate, the platform that should determine this; and particularly: should the -ANC join the Socialist International!


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