SNC+Discussion+Document+3,+Class+Struggles+in+the+NDR

The Political Economy of Transition in South Africa 1994-2004
Communist Manifesto//**
 * //“The history of all hitherto existing society is a history of class struggle”,

This paper is a revised version of a Central Committee document, with the same title, published last years. The present version seeks to take account of some of the comments made in numerous meetings at which the 2004 version was discussed and is tabled for discussion at the SACP Special Congress in April 2005. The paper’s point of departure is that there is an urgent need for a rigorous assessment of the present state of the NDR guided by Marxist theory. Its major contention is that this needs to be informed by an analysis of some of the major dynamics of class formation and class struggle in the period since 1994.

In the 1970s an extensive body of literature emerged seeking to analyse apartheid society from a perspective of class and class struggle. Although some of this work can be criticized as “academic”, disengaged from the critical strategic issues of the struggle at the time and failing to give due recognition to the overarching reality of national oppression, it made a major contribution by generating important insights into the relationship between many of the major measures of racial discrimination and national oppression and the processes of capital accumulation. Far from being dysfunctional to capital accumulation (as writers within the previously dominant liberal paradigm asserted), a convincing case was made that many of the most important measures of racial discrimination and national oppression (including pass laws and racially discriminatory labour legislation) emerged precisely to create and sustain relations of exploitation of the black working class on which accumulation of capital in South Africa depended at particular historical periods. Various contributions also chartered the struggles between particular fractions and strata of the dominant classes and the way in which their evolution impacted on particular aspects of apartheid policies. A critical perspective in many of the more important later contributions was that the state and state policies could not be reduced to instruments of this or that class force, but rather needed to be identified as sites of continuing struggle and contestation.

Although influential for a period in theoretical and academic debates on the analysis of apartheid society, class and class struggle have been virtually non-existent as concepts in most analyses of the dynamics of “post-apartheid” society. From the standpoint of the SACP this is a major lacuna.

As part of the liberation alliance the SACP has long agreed that the immediate task of the post-liberation period is the advancement of a National Democratic Revolution (NDR) whose main content is the liberation of black people in general, and African people in particular, from the oppression of colonialism, racism and apartheid. This liberation has long been seen by the alliance as a whole as involving more than the attainment of formal political liberation and installation of a political system entrenching formal democratic rights. It has also long been seen as necessarily involving the liberation of the black majority from the socio-economic legacy of poverty, underdevelopment, exploitation and inequality. The programme of the movement further recognized that the “motive forces” for the attainment of the NDR were a bloc of class forces among the historically oppressed, with the working class playing a leading role. Emphasised more in earlier than in later documents, was a recognition that different class forces within the liberation alliance would have different perspectives and interests in relation to the course and content of the NDR and that the relationship established between these forces among the people as well as between the alliance of motive forces and the former oppressors would determine the content and trajectory of the NDR. These perspectives long held both by ourselves and our alliance partners would point to the imperative of assessing the state of the NDR not simply in terms of programmatic content or particular achievements in this or that policy area, but also in terms of the dynamics of class struggle.

More specifically from the standpoint of the SACP, we acknowledge along with the rest of the alliance that the main content of the NDR at this stage is the resolution of the national question. In this respect, the dynamics of the national struggle remain the dominant contradiction at this stage of the NDR. We also recognize that gender inequality and the reproduction of relations of patriarchy have been historically, and remain, integral to the reproduction of both national and class inequality. Combatting gender inequality is thus a central task in the advance of the NDR, both at the present stage and in the future. However, as Communists guided by Marxist theory, we set out from the premise that in a society dominated by capitalism, class, defined in the first instance by place in the relations of production, is the fundamental, determinant of social differentiation and social inequality. Our specific approach to the inter-related dynamics of the national, gender and class dynamics in our NDR is thus to identify the class dynamic as the site of the determinant contradiction. Our particular critique of most existing analyses of the NDR is that they have tended to under play class relations and class struggle as motive factors in the course of the NDR. As the General Secretary has noted, this is exemplified in the fact that the movement has terms for its long term vision of the outcome of the national and gender struggles (non-racialism and non-sexism), but no corresponding term for its vision of the resolution of the class struggle.

Any attempt to examine the dynamics of class in post-1994 South Africa must grapple with two realities. South Africa is a society in which the dominant mode of production remains capitalism. Our country, therefore, remains a society divided into classes with different and contending interests. Simultaneously, South Africa is a society that has experienced an important rupture. The 1994 democratic breakthrough and the transition that has ensued in the decade since have witnessed major changes both in the objective structural determination of important class forces and, perhaps more importantly, in the relations between them. This applies both to classes in the former oppressor bloc and to those among the historically oppressed. South Africa’s domestic transition has, moreover, been widely recognized as coinciding with a major change in the modus operandi of global capitalism. The so-called “informationational revolution” and the related processes of capitalist globalisation have impacted significantly on both the objective determination of and on positions taken in struggle by all class forces in South Africa.

What follows will be an attempt at a very sketchy outline of what seem to be some of the main contours of the state of the class struggle on the eve of the second decade of democratic transition. Two elements will be analysed: First, some of the main changes at the level of class determination – the objective place occupied in the social division of labour; and second some indication of the class positions taken by key class forces in the concrete class struggles of the first decade of democratic transition.

The period since 1994 has seen a number of new developments at the level of structural class determination.
 * 1. Key Trends in Class Determination**

On the side of capital, two processes have been particularly important. The first has been the trans-nationalisation of a significant number of former South African-based conglomerate corporations. This has taken several forms. First, beginning around 1996, an increasing number of hitherto South African based companies large enough to secure a place in the FTSE 100 index (including Anglo American, Old Mutual, South African Breweries, Billiton and Didata) have shifted their primary share listing from Johannesburg to London. Such moves have generally been justified to the South African authorities as a means of raising foreign investment capital more cheaply (without having to pay an “emerging market” premium) to finance activities in South Africa and the rest of the continent. They were probably equally motivated by “uncertainty” on the part of the managements of such corporations about their future under a democratic government, and a sense that their position might be more secure relating to the new government as “foreign investors” with options other than South Africa in investment decisions.

Whatever the subjective motivations of the management of these companies, this move was clearly facilitated, in the first instance, by the integration of South African capital markets into the world system after 1994 – a product both of the overall process of capitalist globalisation and of contested decisions about financial liberalization taken by the democratic government in the post-1994 period. It was also facilitated by specific decisions taken by the government in terms of existing financial regulation to allow off-shore listing. Again whatever the subjective intentions of either the managements or government officials concerned, the effect of this move has been to subject the companies involved to the logic of the operation of global market forces, and more particularly to pressures to perform against the expectations of delivering “shareholder value” in the market to which they shifted their primary listing. A related process of significance in some cases was the “demutualization” of large long term insurance companies (Old Mutual and Sanlam). This had the effect of taking large sums of capital out of collective ownership, subjecting it instead to the vagaries of, in the case at least of Old Mutual, off shore stock exchanges. The combined effect of these processes clearly seem destined to lead to at least some of former South African conglomerates becoming minor trans-national corporations, with the corollary of South Africa becoming only one – and probably a progressively less significant – focus of their operations.

The case of South African Breweries (now SAB-Millers) appears to be an example of this process. Content to focus its operations on the South African market throughout the apartheid period, SAB began its “off-shore” activity by establishing subsidiaries in neighbouring countries as and when these began to lower barriers to the entry of South African capital. Later, after 1994, SAB began acquiring interests in China and Eastern Europe – self consciously seeking to focus on “emerging markets”. After its listing on the London stock exchange, and after the devaluation of the Rand in late 2001 adversely affected its performance in Pounds despite increased profits in Rands, it decided that it was compelled to boost its “hard currency” earning capacity. Its response was to acquire Millers Breweries in the US in 2002, and the subsequent re-deployment of senior management to the restructuring of the Millers operation suggests that operations in the “developed” world will increasingly become a central focus of its attention.

Another way in which former South African based conglomerate capital has been “trans-nationalised” has been through take overs by or mergers with foreign capital. The case of the take over by Mittal Steel of ISCOR, a state corporation until privatised by the apartheid regime in the early 1990s, is a prime example of this. Mittal is the largest steel company of the world operating through 14 divisions. Its take over of ISCOR means effectively the integration of the latter into its global network.

A more detailed examination of cases like SAB and ISCOR would highlight some of the implications of this trend – which would seem to include weakening the ability of the South African state to regulate let alone exert leadership over these corporations, and enhancing their leverage in struggles within the state by giving them options other than investing in South Africa.

The second major development at the level of capital has been the rise of a small, but increasingly influential, stratum of black capital. Increasingly inter-related and inter-connected with this stratum is a larger black professional middle class, including significant numbers of senior state officials for whom a career in “the private sector” is increasingly seen as a logical progression. Although still proportionately small in relation to the capitalist and middle classes as a whole (which remain largely white) and miniscule in relation to the black population as a whole, black capital is clearly an increasingly influential force. Together with the somewhat larger black managerial and professional strata it is an important focus of state policy (black economic empowerment) as well as increasingly influential ideologically. Whilst the emergence of such a stratum was long anticipated and indeed widely seen as a welcome sign that “job reservation” in the bourgeoisie was being ended, this phenomenon raises a number of fundamental questions for the direction of the NDR. In much of the discourse of liberation movement politics, the terms black bourgeoisie (or more likely black business) and patriotic bourgeoisie are used inter-changeably. Yet in reality the two terms have quite distinct meanings. The term black bourgeoisie refers to a particular component of the bourgeoisie defined in terms of its national character. The term patriotic bourgeoisie, strictly speaking, would refer to the conduct of a section of the bourgeoisie implying that it acted in a qualitatively different way from other sections of the bourgeoisie – in seeking to promote the development of productive forces in South Africa and in looking to the country as the major focus of its activities in contradistinction to former white conglomerate capital now increasingly looking to trans-nationalise. This raises fundamental questions. How has black capital emerged and conducted itself ? Has the pattern of corporate empowerment deals that occurred in the first ten years of the NDR created conditions conducive to the rise of a capitalist stratum willing or able to act in any way different to that of the rest of the bourgeoisie ? Is there any real evidence of patriotic or developmental conduct ? Why has “black economic empowerment” – defended programmatically as a broad concept intended to impact on the mass of black people – had such limited success in promoting small business activity in disadvantaged areas?

All of this has taken place against the background of a remarkable degree of continuity in respect of the overall demographic composition of the remainder of the dominant and “middle classes”. A feature of the transition to date is that the white minority has continued to occupy a disproportionate position in managerial and professional categories. This is a product, in part, of the negotiated nature of the settlement, which entrenched property rights and allowed redistribution only through “market friendly” mechanisms. In part, too, it is a product of the impact of trends associated with globalisation. The past 25 years or so have seen a trend towards net job creation only in categories requiring post-secondary qualifications for which national minorities, and particularly the white minority, have been most equipped. Government has responded with policies of affirmative action, employment equity and black economic empowerment. While these have created some space for significant numbers of black graduates and professionals – more in the state than “private sectors” – they have yet to alter the fundamental demographic imbalances created by colonialism and apartheid. Against this, a combination of the ending of South Africa’s international pariah status and the global trend towards liberalization of cross border movement of highly skilled and professional personnel, has created unprecedented opportunities for “global mobility” by these strata. Clearly, at this point it has mainly been younger white professionals (influenced also by a sense of Afro-pessimism) that have sought to re-locate abroad, but experience elsewhere suggests that it may not be long before this becomes a more “non-racial” phenomenon.

On the side of the working class and other popular classes, again two main trends in class determination appear to have been important. First, the period since 1994 has seen a continuation and in some respects an acceleration of a trend evident since the mid-1970s, viz. the expulsion from employment of increasing numbers of less skilled, mainly black, workers. Structural unemployment has been identified as a major factor since the mid-1970s. It was initially associated with restructuring in the gold mining industry.

Real wages for African mineworkers, which were lower in 1970 than they had been in 1889, became a particular target of workers’ struggles and the union movement which began to be re-built in the mid-1970s. Mining capital responded to these pressures, and also to the opportunities created by the rising gold price in the 1980s, by restructuring and mechanizing labour processes in the industry. This began what analysts have identified as a phase of expulsion of labour from the industry – which was initially concentrated on neighbouring “supplier states” (Malawi, Mozambique and Lesotho) but later came to encompass also South African supplier regions. At the same time, the period since the 1960s witnessed a significant centralization and concentration of capital in agriculture.

Associated with this, initially, were apartheid’s notorious “forced removals” of “squatter communities” and later an ongoing reduction of unskilled employment in the sector. Processes associated with globalisation have had the effect of extending such trends to other sectors. The “opening up” of the manufacturing sector, as a result of multi-lateral pressures to lower tariffs and a decision taken by the government after 1994 to use tariff reductions as a way to force local industry to restructure and become more competitive, has compelled local manufacturers to restructure according to global norms. Although this was perhaps inevitable given the global balance of forces, and although the alternative might have been (as government has argued) massive de-industrialisation, its effect has been a restructuring that has seen greater export orientation, more capital intensity, disposal and outsourcing of “non-core” functions, adoption of methods like “just in time” requiring lower levels of stock and hence stock management personnel and the replacement of “Fordist” production lines by smaller “work groups”. All of this has meant that while the manufacturing sector has recorded an impressive increase in manufactured exports (objectively needed in view of the declining volumes and worsening terms of trade for primary products) and a smaller but still significant increase in output, there has been a net loss of jobs. Overall official statistics acknowledge that “formal non-agricultural employment” shrunk by about 1 million between 1989 and 2001, and that the unemployment rate (on the “strict” definition) stands at around 29,5% of the working age population. None of this is unique to South Africa. As Zygmunt Bauman writes, “The problem of capitalism…is shifting from exploitation to exclusion. It is exclusion…that today underlies the most conspicuous cases cases of social polarization, of deepening inequality and of rising volumes of human poverty, misery and humiliation”. In South Africa the brunt of these processes has clearly been felt by less skilled, overwhelmingly black and disproportionately female, workers.

Associated with the above has been a significant expansion of “informal” economic activity. For some time, it was argued in official circles that this expansion was “compensating” or “balancing out” the effects of the decline in “formal” sector employment. It is, however, now generally recognized that the majority of “informal sector” economic activity is “survivalist” or “low quality”. Official statistics indicate that the majority of households in this sector receive an income of less than R 500 per month, and that there are 10,3 million people who live in households without any regular “breadwinner”

From the point of view of class determination, these trends are of great significance.

They mean that the working class is being increasingly fragmented into three categories:


 * 1) largely unionized workers in formal employment enjoying in comparison better jobs and working conditions;
 * 2) casualised and temporary labour, including those involved in survivalist activities;
 * 3) an army of the unemployed and marginalized dependent on government grants and remittances from extended families in the other two categories. Moreover, the numbers in the first category (formal sector workers) have tended to decine, while those in the other two categories have tended to increase. Such trends have also been associated with a fall in the share of national income going to labour – from 57,1% in 1992 to 54,8% in 1997. What all this means is that traditional work place-based power bases of working class organization have been undermined in South Africa, as elsewhere, to some degree at least.

In this regard, it is important to recall that for Marxists the centrality of the working class in the struggle for progressive change does not depend on the working class being “the poorest of the poor” but rather is identified in its potential for collective action arising, in the first instance, from its concentration at the point of production. Trends involving a reduction in the numbers of workers in employment in the major centres of production, as well as the grouping of those in employment into smaller and more isolated work teams or units can only mean more difficulties for working class organization, as the experience around the world in this era of capitalist globalisation tends to confirm.

At the same time, what is termed the “informal” sector encompasses categories engaged in isolated and atomized activity. Although it is here that we find many of “the poorest of the poor”, the inability of such categories to act “for themselves” was famously proclaimed by Marx in The Eighteenth Brumaire in relation to the French peasantry – whom he described as a “sack of potatoes”. Clearly one of the consequences of the accumulation path driven by contemporary capitalist globalization has been the transformation of significant strata of organized workers across the world into components of a “sack of potatoes” isolated from each other.

Apart from this view of the peasantry, Marx and Engels, writing in the 19th century described other categories of the “poor” not employed in the formal capitalist sector as the “lumpen-proletariat” and as a “reserve army of labour”. For a number of reasons it might be important to re-consider some of the largely negative assumptions embedded in these concepts. In the first place, in a society like South Africa (but this is typical of most of the Third World), the numbers of the unemployed far exceed a classical capitalist “reserve army of labour”. Disparaging concepts like “lumpen-proletariat” may also serve to blind us to the large numbers of women, for instance, for are engaged in socially necessary work that is not regarded as “productive” by the capitalist sector. Our own SACP campaigns of recent years, and our own recent decades of anti-apartheid struggle, have also highlighted the centrality of “community” struggles, and the importance of not adopting a narrowly workerist approach to class struggle. Our attempts to theorise, from a Marxist perspective, the strategic objective of a struggle for “sustainable communities/households/livelihoods” (see the separate CC discussion paper, Towards a Marxist approach to the struggle for “sustainable livelihoods”) is also an attempt to submit some of these classical Marxist categories to closer scrutiny. The struggles of informalised workers, the unemployed, the rural poor, squatter camp youths, etc. are likely to have contradictory characteristics – on the one hand, there are multiple household, extended family and community links between the unemployed, the informalised and formal sector workers, bringing these strata closely into contact. But those less located at the capitalist point of production are also likely to be swept into single issue campaigns, abstention from voting, alienation (perhaps taking the form of anti-politics politics) and, in the case of some, criminality. The extent to which these latter manifestations have emerged as elements of struggle in South Africa needs to be further analysed, as should their implications for progressive forces.

More work is also needed to analyse the changing class structure of the South African countryside. Within the historically white owned commercial agricultural areas many of the trends of casualisation and outsourcing observable in the urban capitalist economy have clearly also been present. The “homeland” areas, of course, served historically as generators of cheap, unskilled migrant labour power for the mines, industries and capitalist farms. Even during the last two or three decades of the apartheid period, it was evident that the political economy of these areas was undergoing a major change captured descriptively in the notion of a shift in the function of the “homelands” from “labour reserves” to “dumping grounds” for the surplus population increasingly excluded from productive employment in the capitalist sector. Information currently available suggests that the major sources of income of people in the former “homelands” remains wage remittances followed by government social security grants, with income from small scale agricultural production a distant third. Nevertheless, some re-emergence of petty commodity production, and associated with it of a (differentiated) peasantry, seems a distinct possibility in the future if not now.

Based on the above, this section will attempt to sketch out how major class forces have attempted to position themselves in the class struggle in the period since 1994. Here the focus will be on two major sites of struggle while recognizing that there are also several others – including, critically, work-place struggles.
 * 2. Class Positioning within the State and Liberation Alliance**

The first focus is on struggles within the state. Contemporary analysis and debate on the character of the post-1994 state has lost much of the rigour that was evident in the best analyses of the apartheid state by writers within the “revisionist” or “neo-Marxist” paradigm in the 1970s and 1980s. Much contemporary debate is understandably focused on direct policy questions – such as the meaning and strategy to build a “developmental” state, with those more cynical about its prospects arguing a case for increasing reliance on Public-Private Partnerships. Another key focus has been on the issue of “transformation”. This concept, though often vague and ill defined, is supposed to refer to transformation both of structural and institutional modalities and of the agents occupying places in those structures. Different proponents in the debate have, however, emphasized the two aspects differentially with, on one extreme, “transformation” being reduced to a change in agents alone. Underlying much of the debate on both these themes has been an implicit instrumentalist conception of the state, with much of the policy debate centering in one way or another around the question: how can the state be made more effective as an instrument of the liberation movement or an agency of the NDR ?

While understandable in the conjunctural context, this focus has obscured a recognition of the fundamental reality of the state as a site of struggle and contestation between class forces. The tendency to reduce the issue of “transformation” to a change in agents has also distracted attention from the need to analyse the institutional character of both the inherited and current state structures. Deriving from both the above, there has been little real analysis or understanding of the mechanisms and ways in which contending class forces have attempted to impose their positions on key policy issues. The global context and balance of forces is, of course, critical in this regard. While the domestic transition has impacted on the terms and forms of class struggle within the South African state, so too have the transitions associated with capitalist globalisation.

The ANC, which was elected into government in 1994 with a massive majority in a proportional representation system, was a mass liberation movement, organically rooted among the people and allied both with the largest trade union movement in Africa and the oldest Communist Party on the continent. There can be no doubt that the 1994 election victory gave popular forces for the first time in the history of South Africa an important bridgehead within the state. Many of those taking positions in government structures could be identified as organic representatives and leaders of the people.

Prior to the April 1994 election, the ANC had been involved in extensive policy development and preparation for government. Its flagship programme was The Reconstruction and Development Programme (the RDP). Although the RDP was a comprehensive, but unevenly developed, programme with different elements, its clear thrust was on addressing a number of developmental “backlogs” and reducing poverty and inequality. Its basic philosophy was that promoting economic growth (an increase in the output of goods and services) and development (an improvement in the human condition) were inextricably inter-related processes. Over the ten years since 1994 many cadres, both within government structures and elsewhere, have selflessly committed themselves to improving the lives of the people. The ANC government can also rightly claim an impressive and unprecedented record of delivery of important services to poor communities – over a million houses, provision of clean water to 10 million people, electricity connections, rural infrastructure, clinics and schools among them. This is one aspect of the reality of South Africa in its first decade of democratic rule.

But it is not the only one. “Reality” in South Africa, as in all class societies, is a contradictory one. The cadres of the ANC who entered government in 1994 with a mission to improve the lives of the people came into a terrain not of their own choosing, but one shaped both by South Africa’s own past and the emerging reality of capitalist globalisation. The negotiations that gave rise to the 1994 election had involved a compromise, in which the liberation movement was constitutionally limited in its ability to act against inherited property rights and entrenched public servants. The dysfunctionality of the inherited state was widely recognized as a factor impeding more effective and rapid advances with the RDP agenda. Much of this was, however, attributed to the actions of “old order” officials and inherited rules and procedures. Without discounting these as elements, it is the contention of this paper that these were, in fact, not the major factors creating the contradictory reality of the state and ANC policy milieu, and indeed of South African society, at the end of the first decade of democratic government. Class struggles taking place on the terrain of state apparatuses as well as in the broader society were also critical elements in major policy choices.

A more rigorous and detailed study would be necessary to attempt to even trace the contours of some of these struggles on key policy issues, as well as identify the main loci and sites of class struggle within the state in the post-1994 period. In this respect some examination of the constitutional order – created by the negotiated settlement and reflected both in the 1993 Interim Constitution and the 1996 Constitution - would be important. The fact that South Africa has, since 1994, been a constitutional state with limitations on the actions of government is of considerable significance. Perhaps, more important, however, will be the identification of disjunctures between the formal and the real loci of power within the state. Thus, while the 1996 Constitution is, like many others, based on a formal division of powers between the legislative, executive and judicial branches, the real powers of the different branches are, again as in many other states, highly uneven. As in the case of many other states, the real decision-making powers in the South African state are clearly located in institutions and structures of the executive. This does not refer only to the formal structures of cabinet. A variety of other structures have also been significant. Also relevant in South Africa’s case is the fact that the Constitution provides for intervention in and interpretation of executive decisions by the judiciary.