The impact of socio-economic restructuring on the working class and the challenges facing them

Jeremy Cronin (South African Communist Party)

Harold Wolpe Memorial Trust forum meeting

Cape Town, 11 May 2000





The ANC/SACP/Cosatu Alliance – an input by Jeremy Cronin

As the ANC we were concerned that while the conferences held every five years and their elections are important, they do not allow for the discussion of theoretical and strategic issues. A strategic conference is due to be held in July on race and racism and the ANC as a popular movement. A draft input document on motive forces of the national democratic revolution was prepared for this, but it was weak, naming the motive forces as the black working class, the middle classes, and the patriotic bourgeoisie, and lining them up like soccer teams Chiefs and Pirates. I have been asked to be part of the drafting team to revise the document.

My first encounter with Harold Wolpe was while preparing a draft SACP input in April 1989, naming the same motive forces. Harold had an impact on improving this static notion of forces and classes. These social forces are heavily contested, and they have their own stratification and tendencies. There is a great political contest for their political allegiance. The Alliance has its own contests, internally and outside. How we understand the Alliance is often filtered through the media, and through our ideological paradigms.

We don’t have a good understand of what the key strategic option in South Africa is. There is a new kind of opposition in the country, and it is not retrograde conservative forces (although these do exist). A project of radical change confronts the Alliance. It is not conservative but conserves the powers from the past. It is not particularly racist, but is about reconfiguring class terrain of South Africa. It is transforming the level of organisation of the working class. It has not won the right to a two-tier labour market, but is effectively doing this through casualisation and contracting out. The capitalist class is being reconfigured, deracialised, it is a more global player, and it plays a sub-imperial role.

Big business and the Alliance

SA Breweries commissioned a study from the Centre for Development Enterprise (successor to the Urban Foundation and under the leadership of Ann Bernstein), published under the title Policy making in a new democracy. The publication reviews government’s performance, and amounts to a kind of Bonapartist project. It suggests the country requires a new centre of gravity and tough leadership to respond to the challenge of the future. It proposes a powerful presidential centre, and constituting a new ANC bloc to replace the ANC Alliance. This bloc would comprise large business as government’s most important ally, emerging black business, handpicked provincial leaders, the rural and urban poor, and members of Zionist-type churches. It describes the members of these churches as ‘people who are not experts in the toyi-toyi or first in the entitlement queue’, and as disciplined hard-working people. According to the report, in order to achieve this new power bloc, the present ANC Alliance would have to be smashed. The report praises ramming GEAR through in spite of opposition, and the castigation of sections of the Alliance, for example, Kader Asmal openly criticising recalcitrant teachers. This is a paradox, a kind of Faustian bargain. The report proposes building an authoritarian figure – authoritarianism is seen as a virtue – but what will happen if this authoritarianism is unleashed? For example, Mugabe was previously saluted by IMF as a hero, but the situation has turned. Mbeki said yesterday in Parliament we need legal land reform, and would not tolerate land invasions. Big business want Mbeki to be this Bonapartist figure. They want him to take off the gloves, but make sure the white minority feels it is important. The report mentions ‘watching for the body language, not just saying it, but meaning it’. This grouping wants Mbeki to be a Bonaparte, but one sent to Swiss finishing school. This paradigm moulds how the media writes about the alliance.

The media and the Alliance

Howard Barrell wrote an ‘idiot’s guide’ to South African politics in the Mail & Guardian of 4 March 2000. This exemplifies the kind of paradigm which influences the media: that there are only three things which affect politics: the economy, race, and power.

The economy

With regard to the economy – Barrell says since the late 1980s, since the triumph of the neo-liberal orthodoxy, there is only one economic policy – there is no alternative, no debate to be had. Any attempt to do anything else will be punished. Any alternatives may be dismissed as populism and rhetoric. In the Sunday Times, Ray Hartley praises Trevor Manuel strategy of assembling a team of high-powered technocrats, and dismisses the idea of political compromise as cynical or painfully naïve.

The media does not engage in meaningful policy choice debate. The Mail & Guardian is not able to inform us about what is happening in the ANC, the Cabinet, or the Alliance. Business Day is an important exception – it has a hard business orientation. There is not just one capitalist viewpoint on, for example, inflation targeting – there are real debates in and between sectors. For the other media there is just the Western consensus, all the rest of the debate is just a lot of noise.

Hartley says Manuel did the right thing by ignoring an Alliance consensus position. But the job of technocrats is to model, to spell out the pros and cons of policy. Their job is to inform the policy makers, and the policy makers must make intelligent choices. Hartley conflates two things – he does not separate the technocratic stuff from policy choices. This is the economic line.

Even in Washington there are debates. We have a colonial kind of mentality here. Barrell says there is no difference between the SACP, the ANC, the NNP and the DP. His view is that the ANC in practice is the same as DP and NNP in theory. We in the SACP are seen as a hangover, all Stalinists, but in our saner moments we get it right. This is a cognitive dissonance, Barrell says.


Barrell says the top leadership and a few bright minds are ahead of their constituents, and they operate by using the race card as a kind of rhetorical device to connect enlightened leadership and ignorant mass base. In his view this is the area of political discourse; it is not for real.

A lot of newspapers say the ANC says one thing, but means another. The newspapers see deep meaning behind the superficial meaning of what it says. For example, when it says restructuring, it really means privatisation, but it cannot say the word. This idea that the ANC has problems with vocabulary, with words, is almost racist.


The media also sees political space as being about power. Week after week, the Mail &Guardian exposes abuses of power, careerism and factionalism in a reductionist way. The Sunday Times and the Mail & Guardian are fascinated by power, as is the Centre for Development Enterprise in its Bonapartist presidential project. Even the choice of terms indicates this, for example, a Business Day headline refers to Geoff Radebe as the ‘tsar’ of privatisation. The Sunday Independent speaks about two Geoff Radebes – the good one, the cavalier privatiser – and Geoff the small town preacher, for example, when he spoke at the Human Rights Commission hearing into the media.

The Centre for Development Enterprise supports the construction of a powerful centre but seems to regret that the ANC plays this role. How can Tony Leon stand on a soapbox in Brown’s Farm to talk to poor people? You need black politician with street cred. If I had a chance to write the ANC’s submission on racism in the media to the Human Rights Commission, I would have located the debate about racism as a neo-colonial project to make Mbeki say what Tony Blair says; to act as the president’s ventriloquist; an indirect rule model in which the media praises him in a supine manipulative way, while reinterpreting what he says – for example, restructuring really means privatisation.

The state of the Alliance

There is some truth in all of this media coverage. Under pressure from volatile markets, with the rand losing 20% of its value in the balance of payments crisis in 1996, some ministers did go the technocratic route. The attempt to suppress the debate about GEAR has been successfully resisted but it has not changed the policy. Igoli 2002 is an example of a technocratic, managerial approach to the real financial crises experienced by local authorities. The race card has been played, but remarkably infrequently. Perhaps there are elements of Bonapartism in Mbeki, but this is far from the whole truth.

We are an alliance in struggle. An alternative programme, a dominant but contested programme within the Alliance has to do with several things. The most salient is race as a defining reality within our society. According to UNCTAD figures, 53% of South Africa’s people are poor and 27% are ultra poor. Of the 53%, 98% are black. Trevor Manuel says the latest Gini coefficient figures show that South Africa is once again the most unequal society on earth. We have displaced Brazil from top spot. Inequality has deepened in our society. At the opening of Parliament the president was talking about two nations – one impoverished, poor, deprived and black; and a second nation which is mainly white, although not as entirely white as it was. Of the top 10% of the wealthiest households, 9% are white. Not just the unemployed, but even employed workers live in deep poverty.

In the Alliance the ANC is the national movement – in a society which is racialised like ours, its constituency is mainly the downtrodden, the poor, and mainly black African. It is not a typical third world poor – proletarianisation has taken deep root, creating a constituency for the Communist Party, and Cosatu. The defining reality of South Africa underpins the unity in the Alliance. There are strains, but the underpinning features remain in place.

Several things have confronted the alliance in the last six years. One has been taking on governance without a cadre with experience. History excluded our cadre from this kind of experience. 1994 was the worst possible time to transform – social democracy was in tatters, there was chaos in Eastern Europe, a chaos echoed in Seattle in 1999. Under huge pressures and realising the constraints we face – an inadequate budget, an onerous debt, massive pension fund commitments – there has been a tendency to get bureaucratic and technocratic. What has been portrayed in the media as a strain in the Alliance was Cabinet taking things through the ANC. I was involved in explaining what GEAR was in Mafeking. At the time the press reported it had been approved by ANC, but this was not the case. There is a disjuncture between being in government and being a mass movement – these are some of the strains of being in power. The speed with which decisions must be made and their technical complexity make it difficult to open a space for debate. However, there is more ferment and debate inside the Cabinet and the ANC National Executive Committee about appropriate economic policy. With inflation targets, no formula will work, it must be appropriate to local conditions. The promises of the GEAR policy package have not been realised – at this point we were promised 6% growth and many jobs, but none of this has happened. Some say that it has not taken place because of externalities (like the currency crisis), others say because of internalities.

There are strains between the movement character of the Alliance, and the intensity of policy making within government. Party members are often portrayed as left-wing malcontents within the Alliance. The Alliance itself is contested – the debates within the alliance get refracted through the media, which are often hostile. There are strains, but the Alliance will continue. It is a robust alliance.



Naledi Pandor: Are we talking about some homogenous entity, without different viewpoints? We do have different viewpoints. When you said ‘the Alliance’ you meant ‘ANC’. When you made reference to the executive, you did not reflect on how the SACP felt – you need to be measured because that there are different opinions. We were not seeing the distinctions that exist. I want to dispute the Gini coefficient characterisation of the emerging bourgeoisie and the poor among blacks. We do not look at the social formation within which blacks find themselves. If you are poor you are actually supporting many people, having a good income does not mean the same for blacks and whites. This is part of the misreading of black people. There is a lack of understanding of social experience of black people. New wealth does not repose in an individual, we may misread the contribution that an individual is making.

Alex Lichtenstein: So the whites say we have a deracialised economy, the left uses fake statistics?

Neil Coleman: These statistics are punted by conservative forces in society, they are not part of left thinking as such.

Norman Levy: The Centre for Development Enterprise argues on the basis of class forces. The conclusions they may reach may not be ours, but it is interesting to see that class is the basis of its argument. I would be interested to see the countervailing power it sees – big business, the Zionist Church ‘disciplined hard-working corps’? In fact, some of these are supporters of the Alliance rather than a grouping which could constitute some alternative opposition.

Jeremy Cronin: The main point is that this viewpoint is contrary to early drafts of motive forces of forces for change and others against it. There is a kind of strategic project and an ‘authentic’ national democratic project. Both compete for the support of the ANC.

Neil Coleman: Speaking from the trade union movement, a lot of the agenda driven since 1994 by captains of industry has been covert. The business sector published Growth for all in 1996 – this was an open intervention. While not much was openly accepted from this source, many of its proposals have found expression in GEAR. These things work in a sophisticated and covert way. Where did the high-powered government technocrats and bureaucrats who deal with big business come from? In 1996, Financial Mail pointed out Maria Ramos met with captains of industry where they proposed a devaluation of 25%, as proposed in Growth for all. This is how much value the rand lost in the currency crash of that year. The currency crash was a managed devaluation done in a covert way.

Jeremy Cronin: Liberalism has many currents. It is also present in the ANC, as can be seen in our liberal democratic Constitution. One liberal current attached to white business has always been out of power – before, when the Afrikaner nationalists were in power and now that the ANC are in power. Now these people are saying build a Bonapartist figure to promote continuity. They say strikes attack our attempts to grow, the only way we can make money is to invest offshore. The RDP is more than an election manifesto, but it is not enough of a macroeconomic framework. The RDP wanted growth and development to be catalysed by major infrastructural development in the areas of transport, skills training, housing and many others. Only massive infrastructural investment would overcome the inequities and geographical illogic of apartheid, but by 1995 it was clear that we did not have the resources in the state to do this. So, the key thing become to attract foreign investment, not through development, but by making the right macroeconomic noises. One of the technocrats involved in GEAR told me what they had planned was to prepare in great secrecy, not clouded by democratic debate, take a dramatic tough measure, hit hard, by surprise, and then open the debate into a job-creating environment. But the 1996 market crash stole our thunder, so the devaluation of the rand we had planned had been done by the market instead. Now the market keeps saying ‘what you are doing is good, but convince us you are serious’. We keep trying to prove we are really serious. A lot of the polemic directed at us should be more directed at the market. We could not devalue the rand by 25%. Massive investment flows have not come for a variety of reasons. We are sending ‘the right signals’, for example, austerity, devaluation and massive privatisation.

Naledi Pandor: Most parastatals are sitting with huge pension debts – taking its pension debt into account, SAA was worth only R1. It had borrowed money against the pension fund. The whole of Transnet is under-funded. We passed a bill in Parliament to take over this debt so that strategic equity in SAA could be sold.

Richard Rosenthal: They were committed to pay a pension for which they had not provided the underlying capital.

Neil Coleman: The biggest problem is speculative capital. This is directly linked to high interest rates imposed by the Reserve Bank – it is a vicious circle, linked to the balance of payments problem.

Jeremy Cronin: There has been a net outflow of domestic savings. The dominant ideology out there has been an Afro neo-liberal one in so far as Washington consensus is concerned. The request is for foreign investment but with a black economic empowerment component. There is talk of a (black) patriotic bourgeoisie – the RDP wanted to mobilise all resources, statal, parastatal (in the sense of selling strategic equity stakes), as well as domestic capital. The idea is that only the black capitalist class will be patriotic, hence the appeal to domestic capital to invest and create jobs. We have said to white capitalists ‘we are not interested in you’. Cosatu has been exploring domestic capital investment in the Millennium Council. The sociology of black households is different (Naledi’s point), but subject to the caveat that my friends, lots of people I know, are disowning relatives, others not. The fact that the one person that has done well is often because a whole village has sacrificed to send the person to school, and now it is payback time.

Shirley Walters: Both in the Centre for Development Enterprise’s argument about the need for strong leadership on the one hand and your talking about the ANC, rather than the ANC and SACP leadership, the notion of a more authoritarian system is with us. This suits capital. The popular press conveys an increasing idea of the president philosopher king, whether it is the African Renaissance, or AIDS and HIV. The media is shutting down debate. The president is leader of the government, head of the ANC, and part of the Alliance. How does this affect the Alliance’s way of operating?

Norman Levy: One normally thinks of Bonapartists as strong figures, and strong state intervention. What opportunities for choice are there with the big economic reality of globalism? To what extent do we respond to the imperatives of the international market, or to something before GEAR? Are we victim and participant in global reality?

Annemarie Wolpe: We have had several sessions on globalisation – for example, Dorat’s paper on diminution of skills of the labour force. Can we link this with the discussions we have had?

Jeremy Cronin: To answer Shirley’s question – part of what many of us have been arguing for is that we need a fairly effective, well-managed state, but this has been one of the problems. There is a high degree of incoherence, we have a Ministry of Transport but key public resources fall under the Ministry of Public Enterprises, for example, SAA and Transnet. We need a more purposeful, more directed government which can lead reconstruction and development by harnessing all the available resources and drive the process of transformation forward. Some of this is happening, but there is a danger of authoritarianism. It is not just white South Africans who are worried about what is happening in Zimbabwe. In Zimbabwe there was a peasant guerrilla army – the upper echelons of which went into government, the middle into the army, and the rest were demobilised back into the rural areas. That was a classic third world revolution – the rank and file are remote and scattered peasants unable to impact on the higher levels. We never got our guerrilla struggle up and running, it was more armed propaganda involving people in the factories, churches, townships and other places. There are elements who would like to demobilise Cosatu back to the ‘Eastern Highlands’, but this will not happen, the conditions are different. ‘Zanufication’ can happen here, but there are powerful countervailing forces. During presidential question time in Parliament this week there was a question about Zimbabwe, led by the opposition, saying ‘why are you so silent?’ Mbeki said we must have a soft landing in Zimbabwe, we must remain in contact with that government, because that government could pull the whole region down. The President is portraying it as a land crisis – I don’t think it is, although there is a land issue. It has to do with ZANU losing the referendum and deepening poverty. Now the Zimbabwe Council of Trade Unions, previously a tame appendage of ZANU, which had begun to assert its independence, is now in an opposition political role. What Mbeki is saying privately to Mugabe we do not know. Under repeated questioning he effectively said ‘I am not Mugabe, how could you think so?’ There is a racist assumption here – they want him to be Bonaparte, but they do not want the flipside of that. But eventually he said ‘we will not allow this to happen’.

Gerald Shaw: He could only influence with quiet diplomacy.

Richard Rosenthal: Mbeki wanted to express empathy with the dispossessed. The other statement he needed to make to focus the attention of white South Africa and say what is unacceptable there is unacceptable here. But he had to say, ‘don’t worry, it will be done in an orderly way, don’t panic’.

Jeremy Cronin: In Parliament we said we have a land redistribution programme. This made no difference. Mbeki has a distaste for ‘ventriloquy’, he did not want to say ‘we won’t allow this to happen’, but was pressured into doing it. The ANC has had challenges and has faced up to them unevenly, as have the SACP and Cosatu. This might be a huge lack of realism and pragmatism in the face of massive, rampant globalisation.

Norman Levy: It is not that we are mainly following Washington consensus. The economic reality is that capitalism has reconstituted itself, it goes wherever the returns are greatest. We talk as if we have choice. Is there any coherence, are we not just responding to imperatives? Is there really a policy at all?

Jeremy Cronin: If you are incoherent you have very little choice. There is a great deal of incoherence in this situation. There is an important priority around centralism in the Alliance, but there is also a shared strategic perspective and there is evidence of greater coherence in certain areas. In the EU free trade negotiation process, it became clear that capital is free, except when we try to export to them, or to export steel to the US. The free market is not so free, even on silly issues like ouzo and grappa where we could never be a threat. On the trade front, a greater coherence and toughness has emerged in struggle. Also, Trevor Manuel has critiqued many things about globalisation – he supports the positive things, and has focused on a major re-engineering of the IMF and World Bank. There is an emerging perception of a struggle – for example, South Africa’s role in the Non-Aligned Movement and the Organisation of African Unity show elements of an emerging alternative radical third world project.

Richard Rosenthal: When you referred to the events of 1996, you referred to an historic opportunity that was missed – the opportunity to devalue the rand and lift foreign exchange controls. Funds locked up here for a long time are likely to flow out as soon as exchange control goes. The opportunity was lost in the incremental market devaluation. How can we recapture this opportunity, become architects of our economic fate? If we are looking for serious long-term investment, we need to take the risk, the punishment, lift exchange controls and risk serious capital outflows. Foreign investors can come and go as they please.

Jeremy Cronin: The argument out there is that people inside want to get their money out. Third world countries are generally not getting foreign investment, although Brazil and Mexico are doing a little better than others because they are closer to the US. China is the major recipient of foreign investment in the world in spite of the fact that it sends all the wrong signals, and has a socialist public sector as an important engine of growth. India has all kinds of blockages to investment. Both survived the Asian economic meltdown. China gave its public servants a 15% wage increase, running up an increased deficit, but did this to boost its own market. Capitalism and socialism depend on each other. A strong state is the key factor. I don’t think we are about to be a major beneficiary of foreign investment, but we do have some resources. However, I don’t think we are using the opportunity – our roads are falling apart, and railways are being closed down. We need an effective Transnet even if it is publicly owned, Kevin Wakeford of SACOB and I agree on that point.

Alex Lichtenstein: Rhoda Kadalie openly took on Philip Dexter – here a communist may stand on a public platform and be heard. The Alliance depends on what people get out of it – what are the partners getting out of it?

Annemarie Wolpe: The ANC is not a consensus.

Jeremy Cronin: We have just dismantled the provincial executive committees of Gauteng and the Free State. I was part of the decision, and we went to explain our action to the branches. When there is a complex mass issue, communists become useful to explain things. Five hundred ANC branch activists gave Blade Nzimande of the SACP a standing ovation. The ANC remains at base level a radical revolutionary, transformation-committed third world movement. The SACP is seen to be part of that tradition that people want to see continue – this is its symbolic value. We are prepared to stand up and be say our thing. The ANC’s election effort depended massively on Cosatu, with its 1.8 million members. The ANC is falling apart, it is riven with rivalry and factions, but it offers political power. Now there is the possibility of making some money in politics, the prospects are not just jail or death. Cosatu has a different kind of machinery, it runs in a way that the ANC is not able to do.