Nationalisation of the Mines... let's try that again

Well...it's not easy these days to have a robust but comradely discussion. The Sowetan of November 20 demonstrated this point graphically. On page four of last Friday's edition of the paper a brief single column story was head-lined "Cronin backs Malema". This story correctly quotes me agreeing with cde Malema that the Freedom Charter, in calling for the "wealth to be shared", was effectively demanding nationalisation as one important means for achieving this objective.

But turn the page of the very same issue of the Sowetan and there you will find a five-column story head-lined "You're no messiah - Malema attacks Cronin over nationalisation". Both stories are referring to exactly the same original intervention (see here) that I made in last week's Umsebenzi On-Line!

I don't blame the journalists involved. (But what were the senior editorial staff smoking on the Thursday night the edition went to the printers?) The confusion in the Sowetan reflects cde Malema's own misunderstanding of what I and many other alliance comrades have been trying to argue on the question of the nationalisation of the mines.

I have no interest in cde Malema's personalised diatribes (see article). They only serve to distract from what are important positive and constructive points that the ANCYL collective, at least, has been making on the topic of nationalisation. Let's rather focus on what I take to be the substantive matters that cde Malema imagines he is raising in his response to me.

Nationalisation vs. socialisation?

"Cde Jeremy Cronin", he writes, "takes issue with the fact that the ANCYL has called for the nationalisation of mines, instead of socialisation". He then quotes from SACP resolutions that call for the re-nationalisation of SASOL, for instance.

But I never said the SACP is opposed to, or doesn't ever use the word "nationalisation". What I did say is that fascist, apartheid and progressive states have all implemented nationalisation programmes. Even neo-liberal states have recently implemented massive "nationalisation" programmes. George W Bush jnr, for instance, took over the giant US mortgage companies Fannie Mae and Freddie Mac to the tune of $5.4 trillion dollars. This is a national debt with which ordinary US citizens will now be saddled for generations to come.

When we call for nationalisation we need to spell out what KIND of nationalisation we have in mind. We should closely examine whose CLASS interests nationalisation in any particular case serves. And that is why I think it is always useful to link nationalisation to socialisation. 

The ANCYL's important July 15 framework document "ANCYL's Position on the Nationalisation of Mines" (which, I admit, I had not properly re-read before writing last week) makes the same basic point in different words: "Nationalisation is not a panacea for SA's developmental challenges, but it should in the manner we are proposing it, entail democratising the commanding heights of the economy, to ensure they are not just legally owned by the state, but that they are thoroughly democratised and controlled by the people" (see here).

I think that makes the point more clearly than I did. No disagreement.

Is the Freedom Charter calling for nationalisation?

In my original intervention, I spent some time AGREEING with cde Malema and the ANCYL on this point. Although the Charter doesn't literally use the word "nationalisation", it is patently obvious to anyone who knows the mid-1950s context in which it was adopted that the relevant clause had in mind that the mines, banks and other monopoly industries should be nationalised.

Drawing from the ANCYL framework document, cde Malema quotes both President Albert Luthuli (in 1956) and President OR Tambo (in 1969) making this fact absolutely clear. They are wonderful quotations from great leaders, and we should thank the ANCYL for reminding us of them.

Again, no disagreement.

Mineral beneficiation

It is here that I made my own misstep. I was trying to introduce a touch of polemical spice into what can sometimes be a dry topic. I suggested, more in jest than seriously, that cde Malema possibly thought of beneficiation largely in terms of bling. It was a silly comment, and I apologise. I had not realised that cde Malema had such a delicate skin.

But, again, let's not allow polemical flourishes (in this case my own) to obscure substantive issues. Cde Malema correctly asserts that: "Mining as a critical component of the South African economy should necessarily be used to expand and industrialise the South African economy in a more developmental [way], instead [of] a parasitic mechanism pursued by the current owners of mining activities in SA."

I agree. I also agree that the majority of our mineral production continues to be exported largely unprocessed and that this reproduces our semi-colonial economic status in the world economy. It also costs SA many potential jobs.

So where, then, if at all, do we actually begin to part ways?

Whose class interests?

When I briefly described the seriously problematic features of the actual beneficiation that occurs currently with Eskom, Sasol, Arcelor Mittal and aluminium smelters, I WASN'T saying "we have already got beneficiation, so let's not worry about more beneficiation." I was making an entirely different point. It is a point that cde Malema seems, for whatever reason, not to want to grasp.

The SACP firmly supports the principle and objectives of broad based black economic empowerment. In fact, it was the Communist Party in 1929 that first pioneered the strategic perspective of black majority empowerment in SA. But the moment you disconnect a class analysis from a national (or, if you like, "race") analysis, then BEE inevitably starts to lose its broad-based Charterist character. If you disconnect a class analysis from a race analysis you run the danger of wittingly or unwittingly serving the interests of monopoly capital in SA and its comprador and parasitic allies - many of whom have been close to, or actually within our movement.

Take the case of the "Mineral and Petroleum Resources Development Act" (2002). During the parliamentary hearings on the Bill, COSATU and other progressive forces argued that commitment to downstream beneficiation should be made a mandatory requirement for any 30-year mining licence. However, the Department of Minerals and Energy and its then minister, Phumzile Mlambo-Ngcuka, resisted this amendment. Many comrades had the distinct impression that key ministerial advisers (some of them now in COPE) were keen to use the legislation as leverage to force mining conglomerates to provide a slice of action to aspirant black share-holders. But they were less keen to "burden" the profit-maximising aspirations of incumbent mining corporations and their future partners with responsibilities for beneficiation.

As a result, the present Act is weak when it comes to requiring beneficiation. We now have a sad irony. The Chinese, for instance, are willing and keen to invest in manganese beneficiation manufacturing plants here in SA. But this possibility is compromised by the fact that many of our manganese deposits have been leased out for 30 years to the same old established mining conglomerates and their new "patriotic" bourgeois hangers-on.

This example raises a number of related issues. For instance, would a legislative amendment to the Act not be a more effective (and affordable) way to leverage developmental beneficiation, at least for any new licences? This is a practical question, not a desperate attempt to avoid nationalisation at any cost.

There are many other job-creating, down-stream possibilities where the use of democratic state power to leverage transformation out of the mining sector should be considered. For instance, some genuinely patriotic emerging black entrepreneurs have been asking me why we do not impose national shipping quotas on the mine monopoly sector. More than 90% by volume of all of our exports (mostly minerals) are by sea. Yet all of the shipping involved is foreign-owned, the crews are overwhelming non-South African, and the shipping lines pay taxes in other countries. SA's once relatively significant maritime sector is now down to one single registered ship. Meanwhile, the rest of our logistics network (roads, freight rail and ports) still dedicates billions of rands of public money to lowering the cost to doing business for the mining conglomerates and their new allies.

None of this means that we should simply rule out the question of nationalising the mines. And the SACP has never ruled this out. But it does mean that you don't necessarily need to nationalise mining operations to achieve major immediate transformational objectives. 

The ANCYL's framework discussion document does a good job in defending the broad principles of the Freedom Charter against all kinds of reformist back-sliding. It does a good job of defending the principled right of a democratic state to nationalise the commanding heights of the economy to advance democratisation. But it remains vague when it comes to the actual detail of what mines should be nationalised, and how they should be nationalised. It doesn't address itself to the question of whether nationalisation would be the most strategic and sustainable use of massive public resources at this point in time.

Above all, the ANCYL's document is not able to allay suspicions about whose class interests would (perhaps unwittingly) be served by nationalising mines in the midst of the current recession.

As the still exploratory shipping example above should illustrate, the SACP has never argued that there cannot be shared, multi-class points of strategic patriotic convergence. Multi-class alliances are exactly what a national democratic revolution is about. But the possibility of convergence does not mean that each and every promotion of black-owned capital always advances national liberation. Such promotion (or bailing out) might result, in specific cases, in substantial broad based black economic DIS-empowerment.

The SACP certainly wants to pursue the discussion around the ownership and control of the economy with the ANCYL and with the rest of our alliance. Hopefully cde Malema in his busy schedule will find time to be part of this discussion some time before June next year.

Asikhulume!!

Jeremy Cronin is deputy secretary general of the South African Communist Party. This article first appeared in the Party's online journal, Umsebenzi Online, November 25 2009

Click here to sign up to receive our free daily headline email newsletter