Revolutionary+Mandarins+and+legal+Marxism,+ANC+Today

ANC Today, Volume 6, No. 25 • 30 June—6 July 2006
=Excerpt from the President’s letter (“Revolutionary Mandarins”)=

The celebration of the 30th Anniversary of the establishment of the BMF draws sharp focus to the need for the national democratic revolution to pay particular attention to an important echelon of our national leadership -the Managers, (elsewhere described after the pre-democratic revolution Chinese Confucian professional, and highly educated senior public servants, as "the Mandarins").

In Chapter 10, our Constitution imposes serious obligations on our "Public Administration". These prescriptions emphasise the critical importance of 'the Mandarins' to the effort to achieve the fundamental social transformation of our country. The Constitution says that the principles that must inform the functioning of our Public Administration include:


 * a high standard of professional ethics;
 * efficient, economic and effective use of resources;
 * orientation to development;
 * response to the needs of the people;
 * encouragement of public participation in policy-making;
 * development of the potential of all public servants, through good human resource management and career development; and,
 * proper accountability of the public servants.

Our Public Administration consists of more than one-and-a-quarter-million people. In terms of responsibility and skill, its members range from our Directors General, corporate CEOs and professionals, to 'span' managers and unskilled workers. The state entity described as our Public Administration is the biggest and most complex multi-task organisation in our country.

In terms of our Constitution, this Public Administration has the responsibility, among other things, to help:


 * heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights;
 * improve the quality of life of all citizens and free the potential of each person; and,
 * build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations.

Obviously, an organisation as big, varied and differentiated as our Public Administration, and charged with the task to contribute to the fulfilment of these fundamentally important tasks, requires a skilled, educated and dedicated leadership cadre.

It needs at its head its own 'Mandarins' - the skilled managerial leadership without which it cannot function as one coherent machine, loyal to the Public Administration principles specified in our Constitution - as well as the overall leadership of the national democratic revolution.

With regard to what we have just said, there are some who belong within the broad democratic movement, who see this as a threat to genuinely progressive change. Accordingly, these descry what they describe as "a powerful political-technical-managerial centre within the state, focused around the presidency with close ties to key departments, notably Treasury and Trade and Industry".

This opinion is further reinforced by the assertion that "(an unacceptably) strong presidential centre within the state...(has as) its leading cadre...a new political elite (state managers and technologically-inclined ministers) and (often overlapping with them) a new generation of black private sector BEE managers/capitalists."

The fact of the matter, however, is that the national democratic revolution will not succeed without training, developing and putting in positions of authority its own 'Mandarins', properly defined.

In this regard we must emphasise that none of these Mandarins need be members of the ANC. Indeed it is prohibited that anybody should be admitted into, or excluded from the ranks of the Public Administration, on the basis of their membership of, or attitude towards the ANC.

However, as part of the public sector "political-technical-managerial centre", our 'Mandarins' must necessarily be committed to the objectives reflected in our Constitution, to build a united, democratic, non-racial, non-sexist and prosperous South Africa, committed to promoting the liberty, equality and human dignity of each and everyone of our citizens.

//SACP Discussion Document//
=The Communist Assault on the Year 1996=

As reported in last week's article, 'God save us from the false prophets', in its Discussion Document, the Central Committee of the SACP says:

"The...dominant state project since around 1996 has been the former - to drive a process of restoration of capitalist accumulation. The overriding objective has been to create conditions for a sustained 6% (capitalist-driven) growth path. The assumption is that only such a growth path will provide the resources with which to address the developmental challenges we all agree are critical (racialised inequality, unemployment, poverty, socio-economic duality, etc.)... Relative to the pre-1994 reality, the restoration project is progressive.

"But relative to the transformational potential of the 1994 conjuncture, this project represents a serious strategic setback for the working class (and the national democratic revolution)..."

The question therefore arises - what happened in 1996 that distinguishes this year as the decisive moment when "the dominant state project... (translated into a set of measures designed) to drive a process of restoration of capitalist accumulation."

As is obvious from the article on 'False Prophets', capitalist accumulation characterised the capitalist system in our country in 1994, as we achieved our liberation, as well as in 1996, in the same way that it characterises capitalism everywhere else in the world.

Therefore, the assertion in the Discussion Document concerning "a process of restoration of capitalist accumulation", allegedly embarked upon by our movement and government from 1996, has absolutely no meaning. Since ours was a capitalist economy, capitalist accumulation was an established fact. It required no intervention to "restore" it.

With regard to the "restoration" thesis, once again the problem we face is that we are confronted by a supposedly Marxist interpretation of our reality by "Marxists" who have not taken the trouble to study and understand Marxism. This is what has led to the absurd proposition about the 'restoration of capitalist accumulation'.

This absurd assertion, we assume, derives from the continuing opposition of the SACP to GEAR (Growth, Employment and Redistribution: A Macroeconomic Strategy, 1996). Our adoption of GEAR in 1996 is what gives this year its special significance, leading to the claim that this is the decisive moment when our movement and government betrayed the revolution.

GEAR, of course, sought to address the challenge of our macro-­economic balances. It also argued for the achievement of a 6% economic growth rate, or more. It resulted in the implementation of interrelated measures essentially targeted at achieving particular interrelated macro-economic objectives.

In its Discussion Document, the CC SACP conveys its conclusion that it was precisely these measures that "drive a process of restoration of capitalist accumulation" and "represent a serious strategic setback for the working class (and the national democratic revolution)..."

Inevitably, we must therefore reflect on what GEAR meant and means, and its role and place within the context of the functioning of our essentially capitalist economy.

Among other things, the GEAR document said that to respond to our economic challenges, we had to put in place "an Integrated Strategy". It went on to say that

"the core elements of the integrated strategy are:


 * a renewed focus on budget reform to strengthen the redistributive thrust of expenditure;
 * a faster fiscal deficit reduction programme to contain debt service obligations, counter inflation and free resources for investment;
 * an exchange rate policy to keep the real effective rate stable at a competitive level;
 * consistent monetary policy to prevent a resurgence of inflation:
 * a further step in the gradual relaxation of exchange controls;
 * a reduction in tariffs to contain input prices and facilitate industrial restructuring, compensating partially for the exchange rate depreciation;
 * tax incentives to stimulate new investment in competitive and labour absorbing projects;
 * speeding up the restructuring of state assets to optimise investment resources;
 * an expansionary infrastructure programme to address service deficiencies and backlogs;
 * an appropriately structured flexibility within the collective bargaining system;
 * a strengthened levy system to fund training on a scale commensurate with needs;
 * an expansion of trade and investment flows in Southern Africa; and
 * a commitment to the implementation of stable and coordinated policies.

"It is Government's conviction that we have to mobilise all our energy in a new burst of economic activity. This will need to break current constraints and catapult the economy to the higher levels of growth, development and employment needed to provide a better life for all South Africans. We are confident that our social partners will join us in the combined efforts needed to achieve this goal."

In what way do these objectives constitute "a serious strategic setback for the working class (and the national democratic revolution)"!

In this article, we will not discuss all the elements reflected in the "integrated plan" contained in GEAR, as reflected above. However, we recall that at the height of the "left" challenge to GEAR, the reduction of the budget deficit, as indicated in the excerpt above, was one of the issues raised as representing a betrayal of the revolution.

The charge was made that such reduction of the budget deficit, together with the other measures, represented the implementation by our movement and government of a "neo-liberal" project, informed by ideological adherence to the "Washington Consensus".

For our part, we were convinced that sustained high budget deficits would serve as a serious obstacle to the achievement of the goals defined in the Reconstruction and Development Programme (RDP).

In any event, the RDP, as adopted by the Alliance, had given some specific directions that the ANC-led government had to respect. The RDP said:

"Financing the RDP presents both a challenge and an opportunity to revive our economy and set it on a path to sustained reconstruction and development. We must finance the RDP in ways that preserve macro-economic balances, especially in terms of avoiding undue inflation and balance-of-payments difficulties. This requires a strategic approach that combines public and private sector funding, taking into account the sequence and timing of funding sources and programmes.

Before this, the document issued in 1992, "Ready to Govern", reflecting guidelines adopted at the 1991 ANC National Conference had said: "Emphasis will be placed on macroeconomic balance, including price stability and balance of payments equilibrium... The democratic state will exercise fiscal discipline in order to avoid inflation."

Responding to all this, among other things the September 1994 Government RDP White Paper said:

"The Government has already acted decisively to bring about a structured change in fiscal policy and this will begin to have the desired macro-economic effects. The immediate challenge facing the Government was the need to finance and staff the RDP without exacerbating the unacceptably high government debt.

"In particular, consumption expenditure has risen to more than 20 per cent of GDP and interest repayment is absorbing more than 17 per cent of the Budget.

"Increasingly, the market evaluation of such a situation was that the Government could not curb expenditure, dissaving would continue, the balance of payments would be adversely affected and that inflation would rise. As a result, interest rates subsequently rose which, in turn, increased the government debt burden. In the context of such macro-economic instability, other crucial objectives would be undermined."

Why then does the SACP Discussion Document consider the continuum of decisions taken by the 1991 ANC National Conference, the Alliance process that produced the RDP, the consequent 1994 Government RDP White Paper, and the resultant 1996 GEAR "a serious strategic setback for the working class (and the national democratic revolution)"!

Throughout all these instances, our movement understood and sought to take into account a number of related issues. It considered that:


 * unsustainably high budget deficits would divert public resources away from meeting the needs of the people, to paying the money lenders, to service the national debt;
 * diversion of national wealth to the public sector, especially to finance consumption expenditure, would reduce the resources that should be devoted to productive investment and the expansion of the economy;
 * public sector dissaving, arising out of unacceptably high budget deficits, would push up interest rates, which would increase the public debt and the cost of credit needed to finance higher rates of economic growth;
 * the resultant inflation would, among other things, reduce the real earnings, and therefore the standard of living, of the working people and those living on pensions and other social grants; and,
 * the balance-of-payments would go into unsustainable deficit, precipitating a chain of events that would result in job losses and growing impoverishment.

GEAR was put in place to ensure that we avoid these highly negative consequences for our country and working people. At the same time, and correctly, it sought to give expression to policy directions that had been decided both by the ANC and our Alliance as a whole.

Yet, our 21st century "Marxists" have made the determination that the measures we introduced in 1996 constitute "a serious strategic setback for the working class (and the national democratic revolution)"!

Let us however report what Karl Marx said about the phenomenon of budget deficits in a capitalist economy. This will help us to distinguish demagogy posing as progressive political economy, resulting in dangerous political adventurism, from genuinely progressive political economy, which helps to inform correct revolutionary interventions in the economy.

In his seminal work, "Das Kapital", which is fundamental to the understanding of the regularities of the capitalist system, certainly by those who claim to be Marxists, Karl Marx discussed the important issues of budget deficits, the national debt, fiscal policies and the development of capitalism.

We will now proceed to quote an excerpt from "Das Kapital" at some length, to assist us properly to understand the issue of macro-economic balances. Marx wrote:

"The system of public credit, i.e., of national debts, whose origin we discover in Genoa and Venice as early as the Middle Ages, took possession of Europe generally during the manufacturing period. The colonial system with its maritime trade and commercial wars served as a forcing-house for it. Thus it first took root in Holland.

"National debts, i.e., the alienation of the state - whether despotic, constitutional or republican -marked with its stamp the capitalistic era. The only part of the so-called national wealth that actually enters into the collective possession of modern peoples is their national debt. Hence, as a necessary consequence, the modem doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital.

"And with the rise of national debt-making, want of faith in the national debt takes the place of the blasphemy against the Holy Ghost, which may not be forgiven.

"The public debt becomes one of the most powerful levers of primitive accumulation. As with the stroke of an enchanter's wand, it endows barren money with the power of breeding and thus turns it into capital, without the necessity of its exposing itself to the troubles and risks inseparable from its employment in industry or even in usury.

"The state-creditors actually give nothing away, for the sum lent is transformed into public bonds, easily negotiable, which go on functioning in their hands just as so much hard cash would...

"With the national debt arose an international credit system, which often conceals one of the sources of primitive accumulation in this or that people. Thus the villainies of the Venetian thieving system formed one of the secret bases of the capital-wealth of Holland to whom Venice in her decadence lent large sums of money. So also was it with Holland and England.

"By the beginning of the 18th century the Dutch manufactures were far outstripped, Holland had ceased to be the nation preponderant in commerce and industry. One of its main lines of business, therefore, from 1701-1776, is the lending out of enormous amounts of capital, especially to its great rival England.

"The same thing is going on today between England and the United States, A great deal of capital, which appears to-day in the United States without any certificate of birth, was yesterday, in England, the capitalised blood of children.

"As the national debt finds its support in the public revenue, which must cover the yearly payments for interest, &c., the modern system of taxation was the necessary complement of the system of national loans. The loans enable the government to meet extraordinary expenses, without the tax-payers feeling it immediately, but they necessitate, as a consequence, increased taxes.

"On the other hand, the raising of taxation caused by the accumulation of debts contracted one after another, compels the government always to have recourse to new loans for new extraordinary expenses.

"Modern fiscality, whose pivot is formed by taxes on the most necessary means of subsistence (thereby increasing their price), thus contains within itself the germ of automatic progression. Over­taxation is not an incident, but rather a principle.

"In Holland, therefore, where this system was first inaugurated, the great patriot, DeWitt, has in his 'Maxims' extolled it as the best system for making the wage-labourer submissive, frugal, industrious, and overburdened with labour.

"The destructive influence that it exercises on the condition of the wage-labourer concerns us less however, here, than the forcible expropriation, resulting from it, of peasants, artisans, and in a word, all elements of the lower middle-class. On this there are not two opinions, even among the bourgeois economists. Its expropriating efficacy is still further heightened by the system of protection, which forms one of its integral parts.

"The great part that the public debt, and the fiscal system corresponding with it, has played in the capitalisation of wealth and the expropriation of the masses, has led many writers, like Cobbett, Doubleday and others, to seek in this, incorrectly, the fundamental cause of the misery of the modern peoples..."

From 1996, and even before, our movement and government intervened to stop what Karl Marx described as "the alienation of the state", and "the expropriation of the masses", which would be brought about by increasing the indebtedness of the democratic state to the capitalist money lenders.

By this means, we sought to protect the working people from the burden of paying the national debt, which Marx described as "the only part of the so-called national wealth that actually enters into the collective possession of modern peoples".

We sought to avoid the eventuality, recognised even by the early bourgeois economists, that the national debt, originating from high budget deficits, should serve as "the best system for making the wage-labourer submissive, frugal, industrious, and overburdened with labour".

We did not want that the national debt, deriving from high budget deficits, should, in our country, "become one of the most powerful levers of primitive (capitalist) accumulation", "taking the place of the blasphemy against the Holy Ghost, which may not be forgiven."

Strangely, it is the "Marxist" SACP, in its Discussion Document, that has so taken to the worship of the national debt, that it came to consider the reduction of the budget deficit, among the other measures contained in GEAR, as the height of blasphemy!

On this basis, it has proclaimed as loudly as it can, that the year 1996 marks the moment when the democratic state embarked on a project that constitutes "a serious strategic setback for the working class (and the national democratic revolution)"!

Throughout the period since 1996, and before, when we took firm action to bring the national debt under control, our movement and government have ensured that under no circumstances would we reduce the public resources available to discharge our RDP commitment to "meet the needs of the people".

Our actions in this regard stood in direct opposition to the normal "structural adjustment" prescriptions of the Bretton Woods institutions, as well as the related ideological posture represented by the "Washington Consensus".

Beside empty rhetoric, there is no factual information in terms of which, since 1996, and therefore the implementation of GEAR, our government has reduced the social wage that benefits the poor of our country, or otherwise impoverished the masses of our working people.

There is nothing to substantiate the assertion that 1996 represents the great moment of the betrayal of the working people by the ANC and the democratic state - the moment the SACP describes as marking the adoption of the defining "project" of the "restoration of capitalist accumulation", directed against the vital interests of our workers and working people.

There was nothing wrong with the year 1996. There was everything wrong with the assessment of this year by our 21st century "Marxists", who ended up as the great defenders of the interests of the money-lending owners of financial capital, who are interested to see the democratic state beholden to them as a debtor.

Contrary to the strangely dismissive remarks of our 21st century "Marxists", we must do everything to achieve economic growth rates of 6% and more, relying on both the public and private sectors, as the RDP document said.

The achievement of this objective would indeed provide us with the wealth we need to confront the serious challenges of unemployment, poverty and underdevelopment, which the national democratic revolution is committed to reduce and eradicate.

Perhaps not surprisingly, these 21st century "Marxists" do not even understand that Karl Marx's celebration of the revolutionary potential of the capitalist mode of production centred on its capacity to develop the means of production and organise the productive process to the point where, objectively, through high growth rates, it would be possible to generate the wealth needed to meet the needs of the people.

Marx and Engels argued that the only fetter that would deny this possibility would be the capitalist relations of production that would have created the possibility for, and the reality of, high economic growth rates.

In a famous passage in "Das Kapital", Kar1 Marx writes:

"One capitalist always kills many. Hand in hand with this centralisation, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the co-operative form of the labour-process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour into instruments of labour only usable in common, the economising of all means of production by their use as means of production of combined, socialised labour, the entanglement of all peoples in the net of the world-market, and with this, the international character of the capitalist regime.

"Along with the constantly diminishing number of the magnates of capital, who usurp and monopolise all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organised by the very mechanism of the process of capitalist production itself.

''The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated."

The SACP Discussion Document calls on the ANC to undertake a "revolutionary/systemic transformation of society that begins to resolve the inherent contradiction in favour of the working class and its popular allies".

At the same time, it says nothing about the directly related matter, whether "centralisation of the means of production and socialisation of labour (have) at last reached a point where they become incompatible with their capitalist integument".

This is the point at which, according to Marx, objective conditions emerge for revolutionary socialist change, and therefore the 'resolution of the inherent contradiction in favour of the working class', which it calls for.

In his Budget Speech on 21 February 2001, the year of the 5th anniversary of the adoption of GEAR, our Minister of Finance, Trevor Manuel, said:

"The 2001 Budget brings to this House the fruit of the macroeconomic transition we have undergone. Our 1996 strategy was designed to achieve stability, fiscal reprioritisation and consolidation to create the basis for sustainable growth and development. It focused on reversing the growth of debt, unsustainable deficits and the rising burden of interest payments, which threatened our young democracy.

"It was designed to ensure that a greater share of resources went to key priority areas such as education, health and social welfare targeted to the poor. It aimed to put the economy on a sound footing, improve competitiveness and strengthen access to global markets.

"Today we can say that macroeconomic stability and fiscal consolidation have been achieved and we can move to the next phase of economic reforms.

"It is instructive to reflect on how different things might have been. Debt service costs rose during the 1990s from 15 per cent to over 20 per cent of the budget in 1998/99, steadily eroding the resources available for delivery of services.

"If the trend had continued, the headlines for today's Budget would have been 'Interest on debt now R10 billion more than spending on education and rising'. But we reversed that trend. Next year we will spend R10 billion more on education than on debt and by 2003/04, R15 billion more. Interest on debt in three years time will have retreated to 16,4 per cent of consolidated spending."

None of the revolutionary-sounding assertions in the SACP Discussion Document prove that what Trevor Manuel said in his 2001 Budget Speech was untrue!

So, there was nothing wrong with the year 1996. There is everything wrong with the assessment of this year by our 21st century "Marxists".

We must continue to pursue the goal of a 6% or higher growth rate, precisely "to address the developmental challenges we all agree are critical, (racialised inequality, unemployment, poverty, socio-economic duality, etc.)".

We must continue to attend to the challenge to maintain the correct macro-economic balances. We must continue to mobilise both public and private capital to achieve the strategic objective to improve the lives of our people and transform our society.

It is perfectly obvious that we would have been extremely unwise if, in 1996, we had allowed ourselves to be persuaded to follow the economic advice of our 21st century "Marxists".

True to form, a decade later, our 21st century "Marxists" persist in putting forward positions that are not only extremely unwise, but actually suicidal. Evidently, they still know very little about what Karl Marx actually said!


 * From: http://www.anc.org.za/ancdocs/anctoday/2006/at25.htm#preslet**

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