Questions over the Ascent of the New Bourgeoisie

The polemic by Jeremy Cronin, Alex Mashilo and Malesela Maleka “Chris Malikane and the Gupterisation of Marxism” is an important document. As I have observed elsewhere[1], there has been a notable reluctance by Communists and members of Cosatu and the ANC to confront the question of the new South Africa's class structure. But here at last is just such an attempt, or at least the beginnings of one. Let us start by agreeing that it makes mincemeat of Chris Malikane: this is not a difficult task for Malikane's work is deeply deficient from whichever viewpoint one starts out.

The SACP's Faustian pact

Far more interesting is our three authors' conceptualisation of the situation. They are, of course, high-ranking figures in the SACP and there have been many questions about the Party's role in recent time. Their opposition to Zuma has been carefully modulated to ensure that all the SACP ministers remain in office, enjoying their high salaries, luxury cars and foreign travel. So while the Party claims to dislike “Gupterisation” in practice it continues to prop up and enable the Gupta-led regime.

Secondly, one cannot help but notice that virtually all the criticisms of the Zuma government come from SACP members of the second rank: Blade Nzimande has been almost completely silent on this matter. Apart from wishing to keep his job, Nzimande may need to think of how criticism from a younger Zulu (himself) would be taken by the great Zulu chief, Zuma.

Indeed, one remembers all too well how Nzimande led an SACP demonstration in favour of Zuma's construction of his Great Kraal at Nkandla which he described as “rural development”. This was a straightforward act of obeisance in support of corruption. Cronin, to his credit, has been far more outspoken against corruption, so much so that one cannot but wonder if the Party's leader and deputy leader are still on the same page.

Meanwhile one of the SACP ministers, Rob Davies, is intimately involved in Zuma's project of creating 100 black industrialists. As Cronin, Mashilo and Maleka hint in their paper, this is the very worst form of crony capitalism. What business can a Communist Party possibly have in helping create such fat cats in a time of 40% unemployment?

Cronin, Mashilo and Maleka rightly dismiss Jimmy Manyi's Decolonisation Foundation and Andile Mngxitama's Black First Land First as merely providing Africanist cover for parasitic looting, but how different is the SACP? Most left radicals these days look to the EFF, not the SACP, partly because the EFF has had the courage of its convictions and stays out in the cold, without ministerial salaries or perks.

A mythical history

Cronin, Mashilo and Maleka speak of the first phase of the revolution as “the 1994-1996 democratic breakthrough” during which the ANC “abolished the institutions of white minority rule; introduced one person-one vote representative democracy; and a progressive constitution”. This is not really true: the real democratic breakthrough came with De Klerk's speech of 2 February 1990 in which he lifted all bans on people and organisations; released many hundreds of prisoners; lifted all restrictions on movements such as the UDF; allowed all the exiles to return home and engage in free political activity; ordered Mandela's release and announced that he wished to conduct peaceful negotiations with “leaders of all races” in order to create a new, democratic constitution based on universal suffrage and the recognition of individual rights and equality for all before the law.

From that moment on it was clear that apartheid was dead, that all apartheid laws would go and in all probability Mandela would soon head an ANC government. Of course De Klerk was acting under strong international pressures and was being pushed by a diffuse popular movement far wider than just the ANC, but the exiled ANC exerted only diplomatic pressure: MK was demoralised and ineffective. To talk as though the ANC was solely responsible for the end of apartheid is simply wrong.

We then move on to what is now a favourite myth on the left, that of “the lost revolution”. As Cronin, Mashilo and Maleka put it “a radical second phase of the NDR...should have commenced immediately in the mid-1990s”. Instead there was “an implicit elite pact between established monopoly capital...and elements of the new ANC political elite. This pact was codified, amongst other things, in the 1996 GEAR policy package”.

To put it squarely, Mandela sold out the revolution under the blandishments of monopoly capital. Note how the phrase “monopoly capital” is slipped in. Actually there are few real private monopolies in South Africa. In the old days Lion Match and SAB might have qualified, but not now. Usually the phrase “monopoly capital” is used to (mis)describe oligopolies like that of the four big banks – though even there competition has increased sharply in recent years. The outstanding monopolies in South Africa are Telkom, Eskom, ACSA, Sanral and Transnet – all state owned.

The problem with the “implicit pact” that our three authors believe in is that the only written deal was the Constitution. There was no other pact or agreement which limited the freedom of action of the ANC government. If it had wanted to nationalise everything and collectivise the land there would have been absolutely nothing to stop it. If it didn't want to do those things it was because it had decided not to do so for its own reasons.

There were three principal reasons for this. First, the collapse of the Soviet bloc had undermined the allure of socialism and showed that if the ANC attempted anything of the wort, there would be no help coming from that direction. Secondly – and perhaps partly as a result - Joe Slovo had developed a late-career crisis of confidence in socialism and cautioned the Party and the ANC against any rush to nationalisation, which he could see would be a disaster. (To some critics who questioned him he was entirely blunt: “Of course the ANC is going to fuck everything up. But they have to learn.”)

Given Slovo's standing in the movement at that point, his caution was influential. Thirdly, all too many ANC cadres were hungrily eyeing chances for enrichment – Joe Modise, the key man behind the arms deal, was already meeting foreign arms dealers long before 1994[2]. Capitalism didn't have to do much to suborn men like that: they were eager to be suborned.

Self-enrichment as liberation

This is a key point because everywhere in Africa the victory of African nationalism has brought to power a new bureaucratic and political middle class bent on primary accumulation. Often these groups then turned on the Communists who had previously supported them – this happened in Ghana, Guinea, Egypt etc. The SACP must have known that by supporting the ANC they would inevitably help to bring to power the same sort of bourgeoisie in South Africa. For many, enrichment was what the Struggle was all about, as not a few ANC cadres openly admitted as they helped themselves to whatever they could take[3].

It is important to note that in the world of the ambitious  party cadre self-enrichment (by any means) is actually part of the economic empowerment, even the economic liberation that they talk about. This strange combination has been seen up and down Africa. Ismael Toure, always flanking his brother Sekou on the left, also smuggled out of the country its entire cigarette production to enrich himself with hard currency.

In Kenya Oginga Odinga was on the far left but had a large farm. In Mozambique the “revolutionary” families – the Machels, the Mondlanes etc – are large beneficiaries from rake-offs from trade and investment. And exactly this same bizarre combination is seen in South Africa too. Given that context, there was no imaginable revolutionary (“radical second phase”) opportunity. To talk of that now is just retrospective dreaming. 

It is important, too, to note that we are supposed to be now well into the National Democratic Revolution yet this latest phase has seen corruption rise to new heights. We have an NDR preached by a President who has amassed billions, has built himself a palace in Dubai and is preparing to flee to it.

More mythology

Cronin, Mashilo and Maleka then assert that state capture happened before the Guptas (here agreeing with Malikane): white monopoly capitalists seized control thanks to “the 1996 class project”, i.e. the introduction of GEAR thanks to Trevor Manuel, Thabo Mbeki and Mandela. This is a strange mis-reading of events. The real truth is that in power the ANC seemed to have no economic policy at all, merely an uncosted wish-list known as the RDP. This led to a process of pure drift.

Corporate South Africa was so distressed by this that they offered Mbeki both a plan (“Growth for All”) and expert managers to help carry it out. Mbeki indignantly rejected their offers of help and was determined to deal with matters on his own[4].

But the fact was that Mbeki had earlier only just managed to stop Mandela agreeing to take an IMF loan. This was an interesting story, too little known. The IMF was concerned at the state of the South African economy and could see that it was drifting towards disaster. The world in general did not want to see Mandela and the Rainbow Nation fail at the first hurdle but Mandela knew nothing of economics and admitted it.

So the IMF sent their envoy Alassane Outtara (today the President of the Ivory Coast) to see Mandela and suggest that South Africa take an IMF loan and thus be put under IMF tutelage. Mandela was keen to accept for he could see that if the country continued to drift, disaster loomed. But Mbeki, well aware that to take such a loan would be seen as “selling out” by significant sections of the ANC, managed to scupper the deal.

Having done this, he realised that the only way to keep the IMF at bay was to carry out the sort of programme that the IMF would have insisted on as a condition of a loan. Thus was Gear born – its measures (cutting the public sector, balancing the budget etc) were the price for avoiding having to cede economic sovereignty to the IMF. There is no evidence that “white monopoly capital” had anything to do with this.  Similarly, for the SACP to label this as “the 1996 class project” was almost deliberately misleading – though it is true that Mbeki placed his hopes in the development of a black business class who would, in Marxist parlance, form a “patriotic national bourgeoisie”.

Of course, for the SACP the IMF may itself be just another name for “white monopoly capital”. This too is a strange mis-reading. The IMF is the bank that countries go to when they have got themselves into such a mess that no commercial bank will lend to them. It is the lender of last resort. And it is often willing to lend at very low rates of interest. Of course its loans have conditions, just like any other bank loans. Naturally, many countries hate those conditionalities and curse the IMF, but the only thing that would be worse would be having no IMF. (Despite all the talk, there is no sign of a BRICS bank taking over this role.)

It appears that Cronin, Mashilo and Maleka have nourished the hope that Malusi Gigaba would now launch the much-vaunted “second phase” - and they profess themselves disappointed that Gigaba immediately announced that there would be “no change in Treasury policy”. This is seen as kneeling “before the canons of neo-liberalism”.

It is truly difficult to believe that the SACP really had such hopes of Gigaba, a lightweight and dandy with no understanding of economics who starts with the dreadful fact that his appointment was the signal for a credit downgrade to junk status. He knows he is on a sinking ship but wants to reassure the passengers for a while at least. In any case, as we know, the SACP supported Gordhan and Gigaba was appointed by Zuma precisely in order to get rid of Gordhan's constraints on crony capitalism.

Let us imagine, for argument's sake, that Zuma now launched a “radical second phase of the NDR”. This would cause a huge acceleration of capital flight and of the emigration of skilled professionals. Markets of every sort would crash and unemployment would soar. This would be accompanied by a rising tempo of social violence of every kind. As jobs became scarcer and scarcer and the fear of poverty grew, there would be friction along every social fault line – xenophobic riots, tribal and community struggles, the looting of Asian and Somali shops (as in Coligny) and probable black-white friction as well.

The government would quickly find that it had lost effective control of the country and that its popularity was diving towards new lows. In such a situation power and authority would flow to wherever there was capacity and decision. The country would soon be plunged into chaos and might well be dismembered as a result. Trade unions and the SACP would be trampled underfoot. How can this be what the SACP wants?

Capitalism in crisis. Yet again.

Let us go back. Cronin, Mashilo and Maleka spend much time discussing “tender-based capitalists”, “credit-based capitalists”, “productive industrialists” (as opposed to parasites), “white monopoly capital” and so on. This all seems beside the point, particularly since at the outset they have admitted that for Marx “capital knows neither colour, nor creed nor sexual orientation”.

So you can't really talk about “white monopoly capital” and – as earlier noted – the only real monopolies are public, not privately owned. So really one shouldn't use either “white” or “monopoly” but just talk of Capital. One has to wonder at that because the phrase “white monopoly capital” is certainly very current among many SACP leaders and cadres.

It turns out, of course, that in the eyes of the SACP         there is “an all-round crisis of neo-liberalism (social, economic, political and ideological) that creates the space (and necessity)” for a new radical advance. That there is such a crisis comes as no surprise. Every Marxist analysis I have read in the last fifty years has claimed that “capitalism is in crisis”. It's like being at the races and being told that your horse may have lost this race, but he will win the next race, or the one after that. It's always about to happen but it never quite happens.

This is clearly a religious belief, rather like those who continually prophesy the end of the world for next week or, failing that, next month. In fact the most striking thing about the great financial crisis of 2008/9 – an undoubted crisis of capitalism - was that nowhere did one see the left offer any alternative. In practice it was assumed that capitalism was a permanent and developing system and that normal service would be resumed as soon as possible. Which is essentially what has happened.

For Cronin, Mashilo and Maleka discussion of a black bourgeoisie is confined to consideration of the BEE “credit-based” capitalists and the parasitic “tender-based capitalists”. This, of course, sharply separates their analysis from those who talk of a broader African middle class - including black professionals (doctors, lawyers, academics etc) and, above all, the political elite itself and the burgeoning ranks of the upper civil service.

If, indeed, one's analysis is confined to a bourgeoisie defined purely as those who own parts of the means of production and employ workers in them – i.e. the strict Marxist definition – one is missing a good deal, particularly since many of the highly paid frequently supplement their salaries by looting, and by diverting tenders and contracts to companies owned by their wives or other relatives.

Moreover, this is replicated all the way down the system, in the parastatals, in the Cosatu leadership, in provincial and local government. Indeed, even holding office in the SACP can now be a route to high income and status, and there have been enough cases of corruption and looting by Communist cadres for us to know that the ethic of enrichissez-vous has penetrated even Party and Cosatu ranks.

Understanding the new bourgeoisie

The problem is far wider. We all know that there is no such thing as a poor ex-cabinet minister. Even in bankrupt organizations like PetroSA, the SABC, Eskom, SAA and so forth, the directors regularly award themselves bonuses in the millions of Rands every year. Most premiers are looting their provinces, just as many mayors and councillors are looting their towns.

Over and over again we hear of this or that municipality which owes multi-millions in unpaid water and electricity bills. That water and electricity was definitely consumed, so where did the receipts go? A considerable amount were lost due to non-payment by township residents which, for political purposes, the municipality ignores. The rest is looted.

Go to any town in the Transkei and you will find the pavements and municipal facilities falling to pieces before your eyes, while the mayor and councillors all drive Mercedes. The looting is transparent. Or again, look what happened when the ANC captured Oudtschoorn: the town was looted so thoroughly that even the trust fund for the Cango caves had nothing left in it. Most of the looters are ANC cadres and some are SACP members too.

Perhaps the best way to describe the situation which is also consistent with Marxist analysis is that alongside the relatively small class of black capitalists there exists a far larger class of what one can only term “wannabe capitalists”. The unifying theme is what Marx terms the process of primary accumulation. That is, this much broader class isn't choosy about where it acquires its capital from – by huge salaries or bonuses, by looting, by illicit family enterprises run on the side, through bribes, rent-seeking dodges of one kind or another or by raiding pension funds.

The real problem of South Africa since 1994 is that this large and growing class – which is almost completely parasitic – in its eagerness to enrich itself disregards laws, rules, prohibitions or institutional disciplines of any kind.

The result is a progressive hollowing-out of all the major institutions of state – the civil service, the parastatals, the police and armed forces, Parliament and even the judiciary. This process began in a relatively modest form under Mandela, increased markedly under Mbeki, and has come into full flower under Zuma. We have, indeed, now reached a situation in which multiple members of the Cabinet can easily be identified as bought men or women and where, more or less openly, the President and his family are planning to run away to Dubai with their ill-gotten wealth.

This is comparable with what happened in the Congo under Mobutu. Indeed, the picture of Zuma in exile in Dubai conjures up the obvious comparison with Idi Amin in Saudi Arabia.  It has to be pointed out that the SACP is hardly innocent in this process. Indeed, it has been a crucial part of it. It worked as hard as it could to get Zuma and his fellow looters elected at Polokwane and thereafter it has supported him faithfully until the last few months when the message has become a little more mixed.

Cronin, Mashilo and Maleka claim that all South Africa's capitalists are engaged in a “real war...waged against social grant beneficiaries, against workers and the poor, against the broad public in general”. It has to be said that the people really engaged in such a war are the ANC/SACP looters referred to above. Take any of those Transkei towns above: there you will find the usual chain stores and supermarkets. They are no doubt mainly owned by white capitalists but they do at least supply vital goods and services. In return they make a profit. Why else would they do it? But the ANC mayors and councillors who are looting the town of most of its revenue, are supplying virtually nothing in return. They are parasites pure and simple.

The bureaucratic bourgeoisie

It is over fifty years since the French agronomist, Rene Dumont, concluded that the new states of Africa were all ruled by a “bureaucratic bourgeoisie”, viz. a political elite and their cousins and peers in the civil service, all of them bent on primary accumulation by any means possible.

However Dumont did not provide a proper definition of the “bureaucratic bourgeoisie” and since this is a discussion which takes Marxist terms seriously, we may turn to the far fuller definition of the term provided by the standard Russian textbook on such matters for Humanities students and academics, A History of the 20^th Century, Russia-West-East by A.M. Rodrigues, S.V. Leonov and M.V. Ponomarev (Drofa publishers, Moscow, 2008). Their definition, drawing on the Marxist tradition, uses Asian examples but almost all of it is applicable to Africa:

“Apart from the monopolistic bourgeoisie, everywhere in the East the bureaucratic bourgeoisie is very strong. The financial and economic power of the monopolies, both foreign and national, allows them to subordinate a significant part of the state bureaucracy. Its representatives are found widely, starting with the public sector enterprises which are very prominent in most Asian countries. This public sector is as a rule connected with private capital and acts in the interests of the big, and especially the monopoly bourgeoisie. In the 1960s in India, out of the 339 top managers in the public sector, 136 were drawn from big business and 55 combined their public service with private enterprise, despite a formal ban on such practices.

Apart from their high salaries and apart from their direct stealing from the Treasury, these big bureaucrats managed to obtain bribes and to trade in various licenses, privileges, permissions, patents, the issuing of state credit and providing tax exemptions. By turning all their legal and illegal income into capital these bureaucrats thus became a bureaucratic bourgeoisie which concentrates in its hands both power and wealth. It is not interested in the development of production because that might involve a need to reinvest a part of its profits. Moreover, this class is afraid of any changes which could weaken the bureaucracy's power. Corruption and nepotism flourish in this milieu.

This is a parasitic bourgeoisie which, in Indonesia for example, has appropriated a whole third of the national income. Military factions of this bureaucratic bourgeoisie have emerged in various countries such as South Korea, Indonesia, Pakistan, Burma, Egypt and Iraq. Many heads of state such as Sadat in Egypt, Suharto in Indonesia and Marcos in the Philippines, have actively encouraged this process of the embourgeoisement of the bureaucracy.”

It is surely obvious now that exactly the same thing has happened in South Africa? Here there is simply a lot more to loot than elsewhere in Africa so in effect the ANC elite has been engaged in a looting frenzy these past twenty-three years – unprecedented in its length and intensity. Indeed, for many it has been literally intoxicating. And what have they done with all the loot?

Not much of it has been saved or invested: in practise they have been having a gigantic party, indulging in endless celebrations, fancy clothes, expensive whiskeys, foreign trips, fancy new cars, fancy new girlfriends and so on. In so doing they have asset-stripped every major institution which has fallen into their hands. The result is that the only surviving institutions in a healthy state are in the private sector and that, of course, enrages the parasitic bourgeoisie which is correspondingly eager to get their hands on these entities (hence the brouhaha over the failure to “transform” of many big businesses).

Frantz Fanon has, of course, written some of the most coruscating criticism of this conspicuous consumption and the “colonial personality” it embodies. But it is a pity that he is not here too this summation of the process here in South Africa. One only has to open the Sunday papers to see members of the elite and their wives dressed in opulent bad taste, partying it up at some celebration or another (South Africa is a society where everyone gives everyone else prizes), and departing in their Porsches or Mercedes.

Malusi Gigaba struts around in the uniform of an SAA pilot like a teenager in fancy dress and the papers are full of the war of words between his wife and his high profile mistress. That such a man should also be the country's finance minister is doubtless astounding to the credit-rating agencies, though Fanon would not have been surprised. Yet if, in today's South Africa, one put on a play where the finance minister was depicted as such a character one would be accused of racist parody.

The real problem, in other words, is that far too few of this new black bourgeoisie are involved in building institutions (in the way that, say, their American equivalents were after the Revolution there) or in building productive businesses. Such men do exist – Herman Mashaba and the late Oscar Dhlomo, for example, perhaps not coincidentally both members of Opposition parties.

When one thinks of how Anton Rupert began from nothing or how many Indian businesses have been built up by fanatically hard-working men and women, often just the offspring of plantation “coolies”, one realises how this dimension is almost entirely missing from our new bourgeoisie.

It is important to realise that this frenzy of looting and institutional asset-stripping undermines the possibility not just of  an NDR or socialism but of any political programme at all – liberalism, social democracy, whatever. And it undermines any possibility of democracy too for the looting is quite incompatible with the rule of law: it requires impunity for the elite, bent policemen, crooked lawyers, bogus commissions of enquiry and so on. And because it destroys all institutions it leaves one with a political universe ruled by the whims of the rulers, by a crony-capitalist mafia, by chiefs and by gangs. This could hardly be more different than “the people shall govern”.

All this is missing from the account offered by Cronin, Mashilo and Maleka. 

The big question I would like to put to Cronin, Kasrils and others who now look back sadly at the “lost revolution” - possible in the mid-1990s but not afterwards – is “How can you possibly be surprised or disappointed?”

After all, you had the whole history of African liberation spread out before you long before you came to power. You knew that all over the continent Communist and other Left parties had supported African nationalist movements, only to be dashed by disappointment soon after independence as it became clear that all they had done was to bring a corrupt and kleptocratic elite to power. Surely, all those years when you were supporting the ANC, you must have known that it could end like this? So how do you explain your own role in this sad story?