"Does the Honourable Minister [for Mines] really think that anyone would produce diamonds if they could be taken away from him without payment? . . . We shall see a flight of capital."
That was Ernest Oppenheimer addressing the Minister for Mines of the Pact government in 1924.
"This is an old story," interjected a Member of Parliament.
"It may be an old story but it will be a true story if the government seizes private property," retorted Oppenheimer.
In fact, there had already been significant capital flight from South Africa following talk of nationalisation and the bloody strikes of 1922. American investment banks including JP Morgan disposed of their South African holdings. A trickle of capital flight threatened to become a flood.
Threats of nationalisation are nothing new to South Africa. Though it is a matter of supreme irony that in the aftermath of the First World War, Ernest Oppenheimer was able to seize control of the spectacularly rich Lüderitz diamond fields while held temporarily by the Custodian of Enemy Property. With South Africa given a mandate over South West Africa, afraid of confiscation and spooked by an uncertain political climate, the German mining directors hastily sold up.
Again in 1948, nationalising the gold mines was one of the manifesto promises that swept the National Party to power.
And so it was once more on the political agenda in 1994 when the ANC came to power on the pledges of the Freedom Charter. The ANC, as the Afrikaner Nationalists and governments before them had done, soon abandoned nationalisation plans when confronted with economic realities. It is often quoted that even Fidel Castro warned Oliver Tambo against nationalisation as early as 1986.
What keeps the nationalisation debate in South Africa alive is that it is muddied and marred by racist undertones and conspiracy theories.
In the past, anti-Semitic cartoons of ‘Hoggenheimer' circulated in the Nationalist Afrikaans press. The mine owners and industrialist were labelled "imperialists". The "British-Jewish international capitalists who are controlling our economy" is how Dr Albert Hertzog put it. Or as Julius Malema said: "We are now engaged in an openly anti-capitalist and anti-imperialist struggle to transfer wealth from the minority to the majority. This includes our call for nationalisation of mines."
As the ANC Youth League leadership has done, so H.F.Verwoerd too characterised opposition political parties as tools of "money power". This was to a degree true. But what seems to be forgotten in the public debate, disturbingly so of late, is that references to a person's race, the interests they represent or an accusation of "political point scoring" are all argumentum ad hominem and therefore cant.
What needs to be examined is whether the arguments hold water.
The most strident arguments now being made in favour of nationalisation are like those of the past - mired in blinkered ideology, suspicion and retribution.
Nationalisation of the mines in South Africa is highly unlikely to improve the lives of the majority, and the jeopardy to which it exposes the economy makes it far too risky a strategy.
What Nkrumah had called "the biggest octopus", Anglo-American, even as it propped up the Smith regime in Rhodesia with oil and money, came to terms with independent Africa and signed deals with Khama, Kaunda, Banda, even Mobutu returned cap in hand, and later with Mugabe and Machel.
For a while though Kaunda lost all patience. Post-independence, he'd watched £260 million leave his country in dividends; £82 million net in royalties to the British South Africa Company; £40 million in taxes to the United Kingdom treasury. While back in Zambia, out of a population of four million Kaunda had only 1000 matric students. He nationalised. But the vagaries of business make it as treacherous as it is full of potential windfalls. A decade later, Zambia was one of the poorest countries in the world.
The distinction between "have" and "have-nots" is misleading. Even those who do not perceive themselves to have a stake in society most certainly will suffer when the economy fails.
A young Nicky Oppenheimer once observed that "capitalism is only attractive if one has the opportunity to enjoy its benefits". That is the promise of capitalism and that is the promise upon which it is at present failing to deliver.
Many capitalist societies trend towards gross inequality. In South Africa, this inequality is seen as continued exploitation founded on an historic injustice that cries out for remedy. Were not the riots against apartheid a protest against poor service delivery? Against a government that looked after only one constituency and shamefully neglected everyone else?
The liberation movement, initially led by men that wanted nothing more than to participate in the capitalist economy, slowly turned away from capitalism and towards state socialism, because business and international capital did not support the people in their hour of most need. The private sector should not make the same mistake again.
The failure of the so-called "trickledown effect" and government's inability to deliver services places the ANC in a most precarious position. Both it and business have much at stake. They need to work far harder at getting together if they hope to improve their lot. A new elite compromise, but this time one that truly favours the poor, seems to be the only realistic alternative.
Brent Meersman is the author of 'Reports Before Daybreak' and 'Primary Coloured'. This article first appeared in Business Day.
