Pres+Mbeki+on+May+Day+in+ANC+Today

ANC Today
- Volume 5, No. 18. 6-12 May 2005 - THIS WEEK:

marginalised -
 * Letter from the President: Was it a Happy May Day, after all!
 * Women's emancipation: A just world is not possible while women are


 * LETTER FROM THE PRESIDENT**

=Was it a Happy May Day, after all!=

Two days after the publication of the last edition of ANC TODAY, our workers joined their comrades throughout the world to celebrate May Day. Quite correctly, all the Alliance speakers in our country emphasised the important issues of the need to save jobs, against retrenchment, as well as the imperative to ensure that our economy creates more jobs to reduce the levels of unemployment and poverty.

In countless demonstrations and rallies elsewhere in the world, the workers raised similar questions, relating to workers' rights, unemployment, casualisation and deregulation, quality jobs, a living wage, outsourcing, the challenges of globalisation, and so on.

This emphasised the fact that workers throughout the world face similar challenges. It underlined the impact of the process of globalisation, which is integrating all countries into one international market. From as early as the 18th century, political economists pointed to the integration of the peoples of the world in one economic system.

In his famous book, "The Nature and Causes of the Wealth of Nations", first published in 1775/76, Adam Smith presented a thesis that is worth reproducing at some length. He wrote:

"The discovery of America, and that of a passage to the East Indies by the Cape of Good Hope, are the two greatest and most important events recorded in the history of mankind. Their consequences have already been very great: but, in the short period of between two and three centuries which have elapsed since these discoveries were made, it is impossible that the whole extent of their consequences can have been seen. What benefits, or what misfortunes to mankind may hereafter result from those great events, no human wisdom can foresee. By uniting, in some measure, the most distant parts of the world, by enabling them to relieve one another's wants, to increase one another's enjoyments, and to encourage one another's industry, their general tendency would seem to be beneficial. To the natives, however, both of the East and the West Indies, all the commercial benefits which can have resulted from those events have been sunk and lost in the dreadful misfortunes which they have occasioned. These misfortunes, however, seem to have arisen rather from accident than from any thing in the nature of those events themselves. At the particular time when these discoveries were made, the superiority of force happened to be so great on the side of the Europeans, that they were enabled to commit with impunity every sort of injustice in those remote countries. Hereafter, perhaps, the natives of those countries may grow stronger, or those of Europe may grow weaker, and the inhabitants of all the different quarters of the world may arrive at that equality of courage and force which, by inspiring mutual fear, can alone overawe the injustice of independent nations into some sort of respect for the rights of one another. But nothing seems more likely to establish this equality of force than that mutual communication of knowledge and of all sorts of improvements which an extensive commerce from all countries to all countries naturally, or rather necessarily, carries along with it. In the mean time one of the principal effects of those discoveries has been to raise the mercantile system to a degree of splendour and glory which it could never otherwise have attained to."

We have every right to expect that if Adam Smith was writing about the contemporary world situation, he would have said that the current process of globalisation is "one of the greatest and most important events recorded in the history of mankind".

He would have gone on to point out that this process has also had some negative consequences for "the natives" in the developing world, to whom "the commercial benefits which can have resulted from globalisation have been sunk and lost in the dreadful misfortunes which they have occasioned".

In this regard he would have drawn attention to "the superiority of force on the side of the developed countries, which has enabled them to commit with impunity every sort of injustice in those remote countries", and urged redress of this imbalance of power, to achieve "equality of courage and force...inspiring mutual fear".

About 75 years after the publication of Adam Smith's "The Wealth of Nations", Karl Marx and Frederick Engels issued the "Manifesto of the Communist Party" - popularly known as "The Communist Manifesto" - and returned to some of the themes raised by Adam Smith. They wrote:

"The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never known before, and thereby, to the revolutionary element in the tottering feudal society, a rapid development...

"The bourgeoisie has, through its exploitation of the world market, given a cosmopolitan character to production and consumption in every country...In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal interdependence of nations...

"The cheap prices of commodities are the heavy artillery with which it forces the barbarians' intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e. to become bourgeois themselves. In one word, it creates a world after its own image...

"Modern industry has established the world market, for which the discovery of America paved the way...(The bourgeoisie) has resolved personal worth into exchange value, and in place of the indefeasible chartered freedoms, has set up the single, unconscionable freedom - Free Trade...Workingmen of all countries, unite!"

Whereas Adam Smith wrote about an international market characterised by imbalance of power between nations, the North and the South, Marx and Engels spoke about an international market characterised by imbalance of power between a global bourgeoisie and the workers of the world.

Today, all commentators, from the United Nations and the World Bank downwards, speak in virtually one voice about an international market characterised by imbalance of power both between the countries of the North and the South, and between the trans-national corporations and financial capital, on one hand, and the poor of the world in both developed and developing countries, on the other.

The common message that issued from the May Day demonstrations internationally, communicated the message that substantial universal consensus exists about the challenge that faces all humanity, arising from the phenomenon of unequal power in the global economy and society.

In this context, Adam Smith prayed that the time would come when "the imperfections of the market" would be corrected by the organic achievement of "equality of courage and force" across the globe. On the other hand, Marx and Engels argued that these "imperfections" would only be addressed, and equality of force achieved, when the global proletariat responded to their call - workingmen of all countries unite! You have nothing to lose but your chains!

In time, Adam Smith, Karl Marx and Frederick Engels were appropriated by different and opposed ideological schools of thought. It may be that as a result, the possibility was destroyed for all humanity to understand the common basic message they sought to communicate about the functioning of the capitalist system, and the challenge it posed to all humanity, to recognise its enormous capacity to produce "the wealth of nations", while understanding the need to regulate its operation to ensure the equitable distribution of this wealth of nations.

Certainly, today, our workers, trade unions, and our people as a whole cannot plead that they do not understand the common message that Adam Smith, Karl Marx and Frederick Engels sought to convey. Nevertheless, all of us still have to answer the question whether we have responded adequately and correctly to the challenge posed by Adam Smith, to achieve "equality of courage and force...inspiring mutual fear", to address the "imperfections" of the global capitalist market.

In this regard it would be fair, and historically correct, to say that it does not seem likely that this "equality of courage and force" will be achieved by the "workingmen of all countries" uniting against a common class enemy, the international bourgeoisie.

Apart from anything else, the workingmen of all countries understand very well that the bourgeoisie has the possibility to move capital among the various countries of the world, and thus the possibility to "compel all nations, on pain of extinction, to adopt the bourgeois mode of production".

This suggests that rather than uniting across the globe to respond to the pressure to adopt the bourgeois mode of production, the "workingmen of all countries" are more likely to respond to this pressure by organising themselves and taking action in each country as the only way to achieve "equality of force" and the improvement of their wages and working conditions.

Responding to this reality, a few years ago, organised labour and organised business in our country travelled together to Europe to study the response of some European countries to what Marx and Engels had described as the imposition on all countries of "the unconscionable freedom - Free Trade".

This had obliged all nations to compete against one another for a place in the sun that owes its existence to the fact that the bourgeoisie has "given a cosmopolitan character to production and consumption in every country".

One of the countries they visited was the Republic of Ireland, which seemed to have found a way of responding effectively to the challenges of globalisation, rather than merely lamenting its negative effects on "the natives", with all the passionate and elegant eloquence which is a gift of the Irish people, both in Gaelic and in English.

In a 2002 "Discussion Paper" published by the International Labour Organisation's autonomous International Institute for Labour Studies, entitled "What is dead and what is alive in the theory of corporatism", Lucio Baccaro wrote:

"After a decade (the 1970s) dominated by centralised pay agreements and a period of decentralised, free-for-all collective bargaining, Irish social partnership started again in 1987 with the Programme for National Recovery (PNR). Government debt and deficit were skyrocketing, investments were stagnant, and, undeterred by emigration, unemployment was on the rise. This perceived sense of crisis played an important role in the coming together of Ireland's major social partners.

"With the PNR, the Irish Congress of Trade Unions (ICTU) agreed to contain wage increases within limits negotiated at the national level. Also, the ICTU committed itself not to take industrial action that would result in additional cost increases for the employers. This latter clause signalled an important departure from the practice of two-tier bargaining that had characterised previous centralised agreements in the 1970s. In exchange, government agreed to increase take-home pay by reducing personal taxation. Government also agreed to maintain the real value of social welfare allowances...

"During the three years covered by the PNR (1988-90), the Irish economy performed very well. GNP grew strongly (3.6 percent per year) and led to improvements in virtually all other macroeconomic indicators. Interestingly enough, the combination of small nominal wage increases, low inflation, and tax reductions led to higher real disposable wages between 1988 and 1990. In the previous period of free-for-all collective bargaining between 1980 and 1987, real take-home pay had, instead, declined.

"After this encouraging beginning, social partnership became the backbone of Irish economic policy. Each three years, a new agreement was approved. These agreements contained both wage guidelines and a number of social and economic measures...

"From an economic point of view, the Irish social partnership has been a big success. In fact, it is held to have substantially contributed to the Irish economic miracle of the last few years by greatly increasing the competitiveness of the Irish exposed sectors in international markets, particularly in sectors dominated by multinational companies. So far, social partnership has proven remarkably resilient to changes in both business cycles and the political composition of governmental coalitions...

"The unions' role in the new social pacts is to participate in enhancing the competitiveness of the national economy. In exchange, the unions gain access to policy-making. This enables them to check the distributional consequences of policies and limit the impact on the weakest segments of society. Whether this is the best that labour can do at this point in time, given systemic constraints, is a question this paper cannot address, but one that unions and the left should seriously consider, as their future seems crucially dependent on it."

Responding to what they had learnt during their visit to Ireland and Europe, organised business and our trade union federations decided to establish the Millennium Labour Council.

Nevertheless, the rest of our people are still entitled to inquire whether this Council and NEDLAC, the body charged with the responsibility to produce our counterpart to the Irish Programme for National Recovery, such as the Programme of the Growth and Development Summit, have succeeded to do what the Irish social partners did, as reported by the International Institute for Labour Studies of the ILO.

It is clear that to achieve the unquestionably positive results realised by the Irish social partners, our own social partners have to accept that each one of them has a responsibility to contribute to our National Recovery or Growth and Development, for common and shared benefit. As part of this, our social partners have to understand that they have to pursue the objective to create the better life for all our people within the given context of the challenging global circumstances originally described by Adam Smith, Karl Marx and Frederick Engels.

Practically to achieve the desired and necessary outcomes, resulting in pushing back the frontiers of poverty, our social partners will also have to achieve a shared understanding of "the state of the nation", beyond the messages each one of them has to convey and propagate to promote their particular, as opposed to the national interests.

In this regard, we will have to answer a number of questions together, and overcome the temptation and practice to corrupt the understanding of our national reality, seeking to promote our partisan interests. For instance:

What is the "real situation" in our country with regard to the labour market, including the issue of "flexibility" and "rigidity"? What is the "real situation" with regard to job creation and job losses? What lies behind the widespread process of casualisation of labour and the employment of "illegal migrants"? What is meant by the "official definition of unemployment"? What causes unemployment?

What is the "real situation" with regard to our human resource and research and development imperatives? What is the "real situation" with regard to the size of our economy and its rate of growth? What considerations should determine a correct macro-economic policy? What considerations should determine a correct micro-economic policy?

How accurate are the economic statistics issued by StatsSA, the Reserve Bank and the media? What is the difference between the "grey economy" and the informal sector, and how important are they? How organically competitive are the various sectors of our economy? Objectively, do we have "sunset" and "sunrise" economic sectors or sub-sectors? What is meant by a competitive exchange rate and how must we achieve it? What other questions should we ask and answer together?

In next week's "Letter from the President", I will comment on some of these questions, to contribute to what hopefully will be a frank public discussion of these and other issues, as well as the other fundamental considerations mentioned in this Letter. In the meantime I am honoured to reiterate my best wishes for a happy May Day to our working people, which I conveyed during the national May Day rally, convened by COSATU on 1 May in Thembisa, Ekurhuleni.



Thabo Mbeki

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