Capitalist Nature of Post-1994 South African state: A Response to Jeremy Cronin* by David Masondo (Former YCL National Chairperson)

Introduction

Since 2005 there have been lively and intense discussions within the SACP on the post-1994 state, which were sometimes narrowly framed as a mere question of the relationship between the SACP and the state. At the heart of these discussions is whether the South African state is capitalist or not, and what to do about it. The SACP Deputy General Secretary, Jeremy Cronin's letter to the NUMSA General Secretary, Irvin Jim (IJ) [i] has reignited this debate, unfortunately in a manner that shed less light on the debate; but adds more superficial labels to the South African political lexicon.

Be that as it may, Jeremy Cronin (JC) correctly re-affirms the principle of open and robust discussions in analyzing concrete reality and how to change it. I would add that we should do so without degenerating the discussions into petty labeling and counter-labeling, which sometimes obscures what is really at stake in the debate.  It is in this spirit and hope that I join this debate.

This paper is organized around three questions. The first being, whether the South African state is capitalist or not. Here I do not address its colonial character. The second being whether the state can undertake reforms that are against specific capitalists, and under what conditions can it do that. The third will be whether the entry of the SACP leaders into the state has had any significant impact in changing the post-2009 state's neo-liberal economic policies.

In this paper, I argue why the South African state is inherently capitalist, notwithstanding the fact that it is contested and relatively autonomous. That is to say the state in a capitalist society is bound to reproduce capitalism as a mode of production regardless of who is in it, therefore it is inherently capitalist in that sense.

The state form and the extent to which it can undertake reforms that are favorable to the working class depend on its limited degree of freedom from capitalists. Here the state can undertake progressive reforms that are in the interest of the working class and against the will of capitalists, albeit without transcending the capitalist system.

The paper will show the conditions under which the capitalist state can be relatively autonomous, and how it should be contested to increase its relative autonomy from capitalist classes within the limits of capitalism.

Furthermore, the paper will also show how the state since 2009 has continued with neo-liberalism despite the entry of many senior SACP leaders into it. Here we argue that the entry of the SACP leadership into the state has not increased its relative autonomy of the state from capital, partly because of our SACP's tactical choices, which include abandoning mass struggles from below in engaging with the capitalist state.

Cronin's erroneous understanding of the South African state

JC seems to suggest that the South African state is not inherently capitalist because the state political leadership and top bureaucrats are from the left liberation movement composed of working class organizations committed to socialism, including the immediate implementation of free education and national health insurance.

Therefore, characterizing the South African state as inherently capitalist is to suggest that the political and administrative leadership of the state is capitalist and cannot undertake reforms that would militate against certain capitalists, JC would argue.

JC further argues that because the South African state is contested; it is not therefore inherently capitalist. Therefore in JC's conception of the state, there is nothing inherently capitalist about the state, but its class character depends on who wins the contest in the state. State's class character depends on who is in it.  

Currently the bourgeoisie has won the state contest; hence the South African state has been ‘hegemonized' by the bourgeoisie, but it is not inherently capitalist JC would argue. Ostensibly, mechanisms by which the bourgeoisie has ‘hegemonized' the state include but not reducible to capitalist lobbying including in elitist golf-clubs; the presence of bourgeoisie oriented political leaders and senior bureaucrats as well as the institutional configuration of the state which includes the ‘presidential center' which centralized power in the presidency, particularly during the Mbeki administration era, and the dominance of National Treasury over socio-economic policy issues, JC would point out. All these make the state susceptible to the bourgeoisie's dominance and influence, JC would further argue.

Implicit in JC's limited understanding of the state, is the political practice that the left should simply remove capitalist oriented politicians and bureaucrats and replace them with those with a working class orientation and change the institutional configuration of the state (e.g. super-state ministers responsible for cluster ministries) and hope that once that is done, they can simply foist the working class's agenda on society. 

In other words, the political task here would simply to put in place right politicians and bureaucrats and state institutional reforms without changing the underlying class relations. In JC's misleading and empiricist understanding of the state, the state only becomes capitalist when capitalists directly capture the state or use their corrupt means and lobbying to influence the state.

No one doubts that capitalists use lobbying and supporting bourgeoisie oriented politicians and bureaucrats, and business friendly state institutional forms as mechanisms to secure their interests in the state and society. I would add though that the capitalist political party funding is one of the obvious mechanisms secure capitalist influence in the state, but it does not seem to be dominant in the South African context.

However, the factional battles in the ANC-led alliance seem to be largely funded by capitalist funds to enable capitalists of different sizes to capture the ANC as a ruling party, which in turn enables dominant factions to instrumentally capture the state for its economic interests using legal and illegal (i.e. corrupt) means. 

Furthermore, no one denies the importance of the progressive state's institutional reforms, including passing legislation on disclosure of party political funding and stemming corruption. The point however is that even in the absence of these overt mechanisms the state will remain capitalist as long as it operates within capitalism in which the means of production are in the hands of capitalists. To think that the transformation of the capitalist state institutional forms without transforming capitalism is not only reformist, but also idealist at best.

JC's failure to see the inherent capitalist nature of the state lies in his inability to recognize the inherent connection between the structural power of capitalists rooted in their ownership of the means of production and the state's ability to generate its own revenue necessary for carrying out its functions, including reproducing capital and working class.

The capitalist private ownership of economic resources gives them power to determine where and when to invest their capital, which in turn determine the state's ability to generate its own revenue and employment.  In other words, what is glaringly absent from JC's argument is his failure to acknowledge the underlying and less obvious structural mechanisms that make the state capitalist - which is that the state's dependence on capitalist investment, without which the state cannot perform its functions of reproducing not only the working class and capital, but also the state itself. In fact, the ability of capitalists to lobby, bribe and fund politicians and political parties is also enabled by their private ownership of the economic resources.

The South African state as inherently capitalist

A capitalist state is not capitalist bias because of the state's elite, that is, politicians and senior bureaucrats are capitalists by way of owning the means of production. Nor   is it capitalist just because capitalists use obvious mechanisms such as bribes, lobbying and the ‘presidential center' to influence the state, as JC seems to suggest.

States under capitalism are inherently capitalist because they depend on the decisions of capitalists to generate revenue to undertake their functions ranging from repression to providing material economic concessions such as social welfare to the working class, building economic infrastructure and laying out and administering the legal framework within which capitalists accumulate and compete.

Because states do not control and own significant economic resources, they tend to depend on business to invest their resources. Without investment by the capitalists, the state cannot generate revenue from taxing profits and wages from the employed people. Free education and national health insurance also depend on the rate of capital accumulation without which the state cannot generate revenue to finance these.

Therefore states are forced to set a conducive environment for capitalists to invest.  So, capitalists do not need to be in control of the state itself or lobby to make the state capitalist. They only need to own the economic resources that enable them to force the state to set a conductive environment for capital accumulation, which additionally enables the state to increase the growth of its tax revenue base.

If the state elite presides over a declining economy characterized by unemployment and low state revenue to finance social services, it will lose the confidence of the electorate, thus running the risk of losing electoral support. So, it is in the material interest of the state elites for capitalists to invest.

Capitalists make certain considerations before they invest, which include state policies, potential generation and realization of profits based on the size of the domestic market and the extent to which the working class is under control. This is also usually referred to as investor confidence.

In the context of the massive workers strikes, which also includes what NUMSA and Pallo Jordan have characterized as the ‘first post-democracy state massacre'[ii] at Marikana, and the policy debate on nationalization of the mines and land, the investor agencies began to underrate the South African economy. The state elite reassured global and national capital that their interests are still protected despite the debate on nationalisation and popular protests[iii].

Therefore, when there are mass popular protests, both the state elites and the bourgeoisie tend to worry about the prospects of further investment in the economy, hence they will be quick to quell the mass struggles from below, including through tactics such as the Marikana state massacre. To say this is not to ignore the alleged reactionary violence committed by non-NUM members, but it is to show the underlying structural conditions that generate antagonism between workers and the bourgeoisie, and the inherent state bias in favour of capitalist.

To continually compare   the state's violence against workers and the reactionary violence against the other workers as JC does, is to continue to pit workers against each other, and is a failure to reveal the capitalist character of the state, and what is to be done about it.

Capitalist state and progressive reforms

If the state is capitalist, how do we explain certain state policies and reforms that benefit the working class?  Specific state action and policy outcomes are not inscribed in the structure of capitalism itself.  Capitalist power rooted in the private ownership of the means of production, does not inherently lead to pre-ordained specific outcomes.

It is possible to have progressive policy state actions and reforms even within the limits of capitalism. But they do not fall from heaven or from the benevolence of capitalists or capitalists with ‘social conscience' as JC would sometimes want us to believe. Instead they are a product of class struggle, which increases the relative autonomy of the state.

Class struggles from below have forced states to undertake welfare and redistributive policies, which have improved the socio-economic conditions of the working class. When the tempo of class struggle from below decreases there is a tendency for the reversal of progressive state reforms.

The presence of communists in the state accompanied by working class struggles from below have the potential to increase the states' relative autonomy. The communist presence has the potential to ward-off neo-liberalism and capitalist instrumentalist state capture for their own narrow economic interests through legal and illegal (i.e. corrupt) means.

Note that this is different from the proletarian take over and transformation of the state because once this happens, the state seizes to be capitalist in that the proletarian would start dispossessing the capitalists of the means of production, thus reconstructing society along socialist lines.

The fact that the state is contestable and being contested should be self-evident. To say, that the state is capitalist is not to say it is not contestable. It is often argued by JC that those who characterize the state as capitalist fail to ‘recognize the contested nature of the state'.  This is far from the truth. This is just a straw man that JC draws to justify his erroneous conception of the state. 

Therefore, Irvin Jim is correct to say that the state can be engaged and there is nothing inherently wrong with communist participation in a capitalist state. There is something wrong though to think that the state can be socialist under capitalism. The contestability of the state and the communist presence, does not mean the state is not capitalist. Contrary to JC's attempts to seek to project NUMSA as theoretically and ideologically confused, there is no contradiction in saying that the state is capitalist, whilst arguing for communist participation in it. The question is how to contest it, and how to strike a balance between extra-parliamentary and intra-state struggles. 

In fact, the question of communist participation in a capitalist state has been one of the perennial questions in the working class movement. It is beyond the scope of this paper to delve into this.

Suffice to say, the questions on how to contest the capitalist state have been whether the struggle for socialism should be advanced within the existing politically democratic institutions or outside them, or both. The reasons for participation ranged from spreading socialist propaganda, including using the elections campaign to raise and gauge the working class political consciousness; and to using the democratic institutions to bring about socialism.

The debates also involved questions on whether communists should be part of the government executives. The results of communists' participation in various capitalist states had contradictory results.  In certain instances it led to progressive reforms in the interest of the working class. And in other instances it led to demobilization and pacification of the workers and the bourgeosification of communist leaders who tend to be spokespersons of the bourgeoisie and capitalist states at the expense of the working class.  

Let us now turn to how our SACP has been contesting the state in the pre and post-Polokwane periods.

Pre and Post-Polokwane and the SACP's engagement with the state

The capitalist economic power manifested itself in the post-1994 state in the continuation with the neo-liberal economic policy, which was initiated by the Apartheid regime in the mid to late 1980s. In 1996 business expressed its low levels of confidence in the South African government through low levels of investment and currency depreciation.

In response to this the state adopted the GEAR policy, which uncritically welcomed by the then SACP leadership as ‘path-breaking macro-economic strategy......resisting free market dogmatism' and as the strategy, which ‘situates itself as a framework for the RDP' and ‘envisages a key economic role for the public sector, including in productive investment'[iv]. After intense ideological battles in the Party on GEAR, the Party officially rejected the policy. Between 1998 and 2009, the SACP together with COSATU fought the neo-liberalist policy through mass struggles from below.

Both NUMSA and the SACP have rightly celebrated the ascendency of the left into state office since 2009, which provides the potential for increasing the relative autonomy of the state, thus enabling communists to undertake radical reforms.  But has this potential been realized has the left successfully challenged neo-liberalism in the state? The answer is NO. Of course, no one expected neo-liberalism to disappear by the mere presence of communists in the state. This is a function of on-going struggles within and outside the state. Equally, it is incorrect for JC for argue that the New Growth Path signifies a shift from neo-liberal macro-economic policy.

JC's attempts to convince us that there is a shift in neo-liberal economic policy are clearly detailed in his paper titled Let's Consolidate Support for a New Growth Path[v]. To justify his imaginary shift from neo-liberalism, he suggests that the terms of the economic policy debate in the last 16 years have mainly on whether the South African economic strategy should exclusively focus on economic redistribution or should also include discussion of a change of our colonial industrial structure.  In JC's view ‘the paradigm shift' in the NGP lies in its recognition of the need to transform the semi-colonial growth path.   That is to say, what is new in the NGP is the goal of transforming our industrial structure towards its diversification and job-absorption.

Contrary to JC's wrong framing of the debates on economic policy, in the last 16 years, the terms of the debate over macro-economic policy within the ANC-Alliance were not about the need to change the South African semi-colonial growth path and its associated industrial structure.

After all, the GEAR policy recognized the need to diversify our economy. It called for the growth of non-minerals exports, as well as new industrial and infrastructural development as a necessary (even if insufficient) condition for economic redistribution and employment creation.  But in fact, and contrary to JCs claim, the bone of contention has been largely on the appropriate macro-economic policy instruments and forms of ownership appropriate to transform our semi-colonial growth path.  

It is in the macro-economic policy instruments and their underlying analytical assumptions where GEAR and the NGP share significant similarities. To argue against the macro-economic policy framework entailed in the NGP is not to oppose some of the micro-economic interventions such as investment in working class infrastructure, small farmer extension services and mineral beneficiation.  But let's be aware here that these interventions will most likely be sacrificed on the altar of the narrow inflation targeting imposed by neo-liberal macro-economic policy. Put differently, this macro-economic framework will undermine some of the non-objectionable micro-economic interventions.

The danger of magnifying these micro-economic interventions, as JC's intervention does, is that we will miss the inappropriate macro-economic neo-liberal paradigm at play. To cut a long story short: the paradigm shift in the NGP is more in JC's imagination than real, and goes against many of the pre-Polokwane SACP economic resolutions, thus putting into question the material difference between the pre-Polokwane and post-post-2009 government administrations' economic policies. 

The pre-Polokwane SACPs strategic response to GEAR has been that lack of growth  per se is not the major problem, but rather the concentration of economic power in the hands of the white monopoly, recently joined by an economically insignificant black capitalist class, which it uses to reproduce the colonial features of the economy.

To shift this economic power, a developmental state (which is still a capitalist) has to be built, which amongst other things should deploy its capacity to discipline and force capital to invest in the productive economy, and thereby to transcend our industrial structure.  

The SACP also argued that this should include state ownership and control of the strategic economic resources such as mining. It is in this context that the 2007 SACP Congress resolution called for the re-nationalization of SASOL and Arcellor-Mittal steel. This call was borne out of the recognition that the private sector on its own cannot drive the process of industrial transformation.

It is driven not by Mr. Bobby Godsell's ‘social conscience', the former CEO of AngloGold as JC implies, but by profit. Jobs, income distribution and diversification are not so much the aim of capital. It is an unintended consequence. Investment is not a goodwill act of capitalists with a ‘social conscience'.

Therefore a revolutionary state, which owns the nationalized property and rooted amongst the popular forces, should use its economic power to foster the process of industrialization. It is a well known fact that the lesser the democratic movement's ownership and control of the economy, the lesser it will be able to determine the patterns of investment towards changing the industrial colonial structure.

Note that this is radically different from the GEAR and NGP policies, which argued that the problem is a lack of competition that requires more actors in the market to unbundle monopolies that block ‘perfect' competition.

Embedded in our SACP resolution is the argument that in its search for profits, capitalist competition itself generates inefficiencies and misallocation of resources, which do not only lead to centralization and concentration of economic power, but also plunges us into the periodic crises that JC refers to. In other words, it is competition that generates crises, not the lack of it.

Therefore, JC's celebration of the defeat of strategic nationalization is a celebration of the defeat of the 2007 SACP congress' economic resolutions, thus protecting capitalist, neo-colonial and imperialist ownership and control of the South African economy.

Whatever the well-meaning intentions of JC's defense of the NGP (even when not constrained by state and ANC parliamentary disciplinary protocols), he objectively provides ideological legitimation and rationalization of the overwhelmingly neo-liberal residuals in the post-2009 state macro-economic policy as well as defending neo-colonialism and imperialism in South Africa. Consequently JC weakens the left within and outside the state.

Political democracy: a socialist means and end

It is incorrect for NUMSA to uncritically usage of Lenin's phrase that ‘bourgeois democracy is nothing but the best political shell behind which the bourgeoisie hides its dictatorship'[vi].  Quoted in this fashion and without also showing Lenin's critical celebration of political democracy under capitalism, might generate an impression that political democracy is less important.

Whilst we should be critical of political democracy under capitalism, we should also bear in mind that the struggle for political democracy, including universal suffrage, is a product of working class struggle. The bourgeoisie did not want universal suffrage. It supported qualified democracy in that only those with a certain amount of property and level of education could vote.

The bourgeoisie's opposition to democracy was based on the fear that the working class will use political democracy to deal will social inequalities rooted in differential access to productive assets.  The bourgeoisie's opposition to democracy was based on the real fear that the working class would extend political democracy to other spheres of social life, particularly the economic sphere.

It is beyond the scope of this paper to venture into why the working class worldwide has not been successful in using political democracy to attain socialism. The point however is that Marxists cannot simply dismiss political democracy under capitalist as just bourgeoisie. The conditions of political democracy enable the working class not only to wage their struggles from below to increase the state's relative autonomy, but also extend democracy to the economic sphere. Political democracy enables the poor to strike and speak out against capitalists and bourgeoisie state elites.

It is actually this democracy that enables us to conduct self-criticism of ourselves as the left, but also the democratically elected representatives in our democratic government, including communists. Therefore the struggle for political democracy cannot be separated from the struggle for socialism. Without political democracy robust discussions will be absent in our own organizations and including within the capitalist state.

Footnotes:

* The paper will be presented at the Marxist Study Circle in Polokwane as one of the contemporary topical issues for discussion. It is also written with the aim of possible publication in the SACP quarterly theoretical journal - The African Communist.

[i] Cronin. J. Open Letter to cde Irvin Jim in Umsebenzi online, Volume 12, No. 10, 14 March 2013

[ii] Jordan, P. Bisho Martys Commemoration Lecture, 6 September 2012.

[iii] See Beyond Marikana: the crisis - Massacre ‘shows how fragile SA is', City Press, 15 September 2012 17:26, Bisseker, C.  Impact of Marikana massacre on investment: Rob Davies on Marikana massacre, Financial Mail, 18 September 2012 and Ensor, L. Davies to reassure investors in the wake of Marikana, Business Day 3 September 2012

[iv] See the SACP Press statement on Growth, Employment and Redistribution Macro-economic policy, 14 June 1996

[v] Umsebenzi-online Volume 10, No. 2, 19 January 2011

[vi]  NUMSA Central Committee (CC) Press Statement, 2 September 2012

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