PROFIT - ‘THE CRUELLEST GOD’ OF THE BOURGEOISIE

Every now and then it is necessary to summon up the fortitude to read what the SACP is saying to its own support base in the Alliance.

It was in this spirit that I recently delved into the 3 100 word message of Jeremy Cronin, the SACP’s 1st Deputy General Secretary, to the National Union of Mineworkers 15th National Congress.

There were no great surprises. The 1st DGS decried the growing attack on NUM from a number of angles - including The Times Media Group -“owned by the monopoly mining houses”; “monopoly capital” (whatever that it is); and “reactionary commentators like John Kane-Berman”.

However, it was not only monopoly capital who were mounting attacks against NUM. Its assailants also included “the NUMSA leadership clique”; the EFF “rabble army”; and AMCU - which is “essentially vigilante unionism”.

According to Cronin, NUM “to its great credit” had “acknowledged that organisational and other challenges and weaknesses within the union” had “also provided gaps for the anti-NUM offensive”. He accordingly welcomed NUM’s determination to go “back to basics” and to put “membership first!”

What I found of greater interest was the manner in which Cronin, true to form, continued to project the relationship between “progressive unionism” and “capitalist bosses” as one of struggle. “…At certain times [it might] be relatively civilized, at other times it will be aggressively hostile. But even in the best of times, the class interests of the bosses and the class interests of workers stand in fundamental contradiction to each other.”

With a union movement holding such views - led by communists who do not really accept the right of “capitalist bosses” to exist - it should not be surprising that - according to the World Economic Forum’s Global Competitiveness Report - South Africa has the worst employer/employee relations in the world. Our inflexible labour dispensation is, in turn, one of the main reasons for the loss of hundreds of thousands of jobs throughout the economy.

Cronin’s comments about profit are even more enlightening:

“For the bosses priority number one is always private profits for themselves, ‘maximising share-holder value’ as they call it. All other considerations are secondary - job creation, a living wage, health and safety, the social conditions of workers and their families, even whether to invest or not to invest - all of these are secondary considerations. Private profit, that cruellest of gods, is the one true object of worship for the bourgeoisie.”

Profit is, in fact, the reward that entrepreneurs gain by providing goods and services that people want, at prices that they are prepared to pay. In achieving profits entrepreneurs have to ensure that their costs - including labour costs - do not exceed their income. If companies run at a profit they are able to expand and create more jobs.

If they break even, they stagnate. If costs consistently exceed income they close down - which is bad for everyone and particularly for the workers involved. An important part of the success of profitable organisations is the acceptance by workers and bosses that their interests do not stand in contradiction - but should be in close alignment to ensure the success of the venture in which they are all involved.

If entrepreneurs enjoy ‘excessive profits’ they quickly attract competitors who lower prices or produce similar goods of better quality. Also, they do not sit on their profits - like Scrooge McDuck in his fabulous gold bin: they redeploy them through banks, which determine where they can best be reinvested to produce yet more economic activity and still more profits.

That is how economies grow. In the process, free market societies throughout the world have achieved - far more effectively than any socialist society that has ever existed - Cronin’s wish list of “job creation, a living wage, health and safety” and the improved “social conditions of workers and their families.”

Cronin trots out with some pride the SACP’s own nostrum for economic growth. Inspired, no doubt, by Soviet proletarian art of the 1930s - he sees “the re-industrialisation of our economy” as being at the centre of the second radical phase of the National Democratic Revolution - without which “South Africa will continue to be little more than a neo-colony of the imperialist North”.

“We have to re-industrialise and this means leveraging off our one major global competitive advantage our massive mineral resources”. The Government plans to achieve this by dictating to mines - through the Mineral and Petroleum Resources Development Act - to whom and at what price - they should sell their mineral products. 

It is precisely because of such attitudes that South Africa has not been able to take advantage of recent commodities booms to develop the richest mineral resources in the world. 

Has Cronin considered whether his proposed industrial undertakings would run at a profit - this cruellest god of the bourgeoisie? If the answer is ‘yes’ there would be no shortage of private investors. If, as is more likely, the answer is ‘no’ they would have to be subsidised by an increasingly bankrupt state.

The fact is that everything Mr Cronin owns - from his cotton socks, to his mobile phone and his official Mercedes - has been created because entrepreneurs have been able to make a reasonable profit. He is able to saunter down to his local supermarket and pick any product that his heart desires from well-stocked shelves with great service from friendly attendants because of profit; he can shop for a wide variety of excellent products at competitive prices because of profit; he can eat at charming little restaurants because of profit. None of these things were available for ordinary people in any of the communist societies that ever existed. Of course, Cronin, as a member of thenomenklatura in a future communist state would have access to special shops.

The centrality of profit to wealth creation and economic growth is a fundamental and immutable economic truth. 

Perhaps the greatest crisis that we now face is that economic policy within the ruling alliance has been seized by Mr Cronin and his SACP colleagues, who control 40% of cabinet portfolios without ever having won a single vote in their own name in a democratic election. They are hell-bent on creating a society in which there will be no profit for anyone.

Dave Steward is Executive Director of the FW de Klerk Foundation.