Address by John Kane-Berman, chief executive of the South African Institute of Race Relations, to Institute members and guests at the Country Club, Johannesburg, September 28 2011

Revealing the Master Plan: What the ANC has in store for South Africa

In my presentation last year I argued that many of the problems confronting South Africa arose not from a few wrong-headed policies, but from the nature of the Government and the way it ran the State. I suggested that when a party with a two-thirds majority in Parliament was still committed to a "national democratic revolution" we should ask what it is that they wished to stage a revolution against. So this evening I will explore the national democratic revolution (NDR) in a bit more detail. I will define it, discuss the process of implementation, look at the implications, and then say something about its future.

The national democratic revolution: origins and renewal

The idea of a national democratic revolution has been around a long time. But it has been obscured in the public mind by other issues. For example, two years after coming to power in 1994 the African National Congress (ANC) adopted the Growth, Employment, and Redistribution (Gear) policy. Supposedly based on the "Washington consensus", this was derided on the Left as "neo-liberal". For an organisation allied with the South African Communist Party (SACP) and the Congress of South African Trade Unions (Cosatu), the ANC has done a fair job of managing a mixed economy - especially when measured against never-ending fiscal crisis in the US and Europe. Right now it looks pretty good in fact!

However, since the ANC's conference at Polokwane in 2007, the NDR has picked up steam: 

1. More and more state planning and regulation is coming in

2. Some people in the government see land reform as an anti-colonial struggle

3. Mining rights were being eroded long before anybody had heard of Julius Malema

4. Employment equity, empowerment, and other goalposts are frequently shifted

5. Attacks on the Press and Judiciary are increasing

6. Foreign policy seems to be the antithesis of what one would expect from a liberal democracy

I will argue that these are not just coincidences, but that the master plan in the form of the national democratic revolution is the elephant in the room. Perhaps the first few years after 1994 were a kind of "Prague Spring" so that the national democratic revolution can now be implemented with greater determination.

In discussing the NDR, I will draw not only on our own research at the South African Institute of Race Relations, but also on the work of three others who have studied it: Irina Filatova, one-time head of the Department of African Studies at Moscow State University and subsequently a professor at various South African universities; Dave Steward, executive director of the FW de Klerk Foundation; and Andre Duvenhage, a professor at the University of the North West. Any mistakes I make in interpretation are my own fault, not theirs.

So what is the NDR? It has its origins in Lenin's theory of imperialism. This means that the wealth of imperial powers arises only from exploitation of their colonies. The theory started to gain influence in South Africa via the SACP in 1962, but gathered further traction when it was adopted by the ANC at its conference in Tanzania in 1969.

South Africa of course didn't fit the standard imperial-power-versus-colony model of Leninist theory so the model had to be adapted. What emerged was "colonialism of a special type'. This meant that whites became the equivalent of the imperial power and blacks the colony. On this analysis, white wealth is never the result of enterprise, but always of exploitation, and is therefore illegitimate. Julius Malema's threats to confiscate land are not aberrations, but consistent with this analysis.

In a normal liberation struggle, the imperial power might be overthrown. But in South Africa's case, the equivalent of the imperial power - the whites - were as firmly settled as the blacks. Also, in 1989, the Berlin wall collapsed and with it the Soviet Union, further undermining the prospects of revolutionary liberation. Finally, what emerged in 1994 from the Congress for a Democratic South Africa (Codesa) was a compromise. Its key components included a sovereign constitution based on the separation of powers plus an independent judiciary charged with the protection of a long list of rights, including property rights.

Where did this leave the national democratic revolution? Although white wealth was supposedly acquired illegitimately, the ANC had signed up to a constitution that guaranteed it. Right from the start, people described by the ANC as ‘ultra leftists' have accused the organisation of betraying the NDR by agreeing to a constitution that supposedly tried to freeze for all time an unjust pattern of property ownership. But did the ANC abandon the NDR?

Filatova, for one, thinks not. She says that most in the ANC are as "passionate as ever" about the NDR. Also, that "it is ideology, not economic reality, that dictates much of the ANC's thinking and policy".

Well, the ANC certainly wasted no time in setting out the further tasks of the NDR in various "strategy and tactics" documents for its conferences in Mafeking in 1997, Stellenbosch in 2002, and Polokwane in 2007. These include:

1. Liberating blacks from "political and economic bondage"

2. "Eliminating apartheid property relations"

3. Redistribution of wealth, income, and land

4. Transforming systems of production and ownership

So much for the economics. What about the politics? Here the agenda includes:

1. Using affirmative action to make all centres of power demographically representative

2. Using cadre deployment to take control of all centres of power 

3. Establishing specifically African control in political, social, and economic life

4. Winning "the battle of ideas" so as to counter both "neo-liberalism" and "ultra-leftism".

Implementing the national democratic revolution

What about implementation? If the absence of a revolutionary seizure of power in 1994 was a setback for the ANC, so was the collapse of the Berlin Wall five years before that. The organisation accordingly recognised that if the State were to "seize the means of production", that would be a "sure recipe for the defeat of the NDR". So the NDR would perforce take longer to implement. Its goal nevertheless remained full "economic emancipation" which, according to the original theory, is not possible under capitalism. But if the collapse of communism was a temporary setback, the ANC believes that the current global financial crisis has helped it by demonstrating what it calls "the bankruptcy of neo-liberalism".

Confusingly, perhaps, the NDR is therefore not being pursued come-hell-or-high-water as an immediate objective. The "balance of forces" that might help or hamper it must be reassessed from time to time. So risks of capital flight, for example, must be considered when nationalisation is discussed. Since property is "at the core of all social systems", tensions about redistribution need to be managed via what are called "dexterity in tact and firmness in principle".

Therefore, provided you keep the long-term goal in mind, you can make tactical compromises - perhaps taking one step back now in order to take two steps forward in the future. A few days ago a newspaper columnist wrote that the NDR was "far from imminent". He misses the point: the "strategy and tactics" documents make it clear that implementation is not via the storming of the Bastille or the Winter Palace but is instead incremental. As a 2010 ANC document put it, you advance when next an opportunity arises to "move the struggle decisively forward".

Julius Malema seems to be applying "dexterity in tact and firmness in principle". Recently, he wrote: "We accepted that the ANC could not nationalise mines and take back the land during the transition from apartheid to democracy because the balance of forces was not in favour... [But now it] has shifted in favour of the forces of change".

Progress to date

How far has the NDR progressed? Here are some of the milestones:

1. The supremacy of Luthuli House, which was eroded under Thabo Mbeki's presidency, has been re-established. Cabinet, Parliament, provincial legislatures, and local authorities all accept that they are subordinate to party headquarters. As Julius Malema has put it, "the Government is a department of the ANC". 

2. The cadre deployment policy is entrenched. The Judicial Service Commission - and therefore the appointment of judges - is under the control of the ANC. So are the prosecuting authorities. The same applies to most parastatals, not forgetting the highly influential SABC - very important in winning "the battle of ideas". 

3. Redistribution is well under way. More and more free goods and services are being provided, while the proportion of GDP appropriated by the State is steadily increasing. 

4. More and more regulatory and licensing bodies are being established, putting more and more business decisions under bureaucratic control. 

5. Mineral and water rights have already been put under state control, while legislation has been prepared to nationalise the assets of the organised legal profession. It also seems likely that the minister of higher education will try to appropriate the assets of sector education and training authorities (Setas) 

6. Plans are afoot to divert private medical aid contributions to the State

7. More centralisation is on the way, including bringing municipal employees under the control of the central government, so undermining opposition parties who capture control of local authorities 

8. The market-orientated Gear strategy has been steadily replaced by more and more state planning

Implications of the national democratic revolution

What of the implications of the national democratic revolution? Well, it helps to answer some of the questions that puzzle people. Journalists (and some foreign governments) have been surprised by the ANC's attempts to clamp down on the Press. 

In the context of the NDR, this is less surprising. Newspaper commentators also seem puzzled that South Africa's foreign policy is sometimes unsympathetic to human rights. But support for Robert Mugabe against British colonialism, or for Colonel Gaddafi against NATO imperialism, is consistent with the anti-imperialist thrust of NDR thinking.

So also, commentators profess themselves "baffled" or even "stunned" by President Jacob Zuma's failure to appoint Dikgang Moseneke as chief justice. The Mail and Guardian editorialises that Mr Zuma betrays a "profound lack of understanding" about the role of the Judiciary in a constitutional democracy. On the contrary, Mr Zuma understands that role perfectly well: he just doesn't agree with it; he wants to make sure that the Judiciary does not get in his way or scrutinise him too deeply.

The ANC's support of the singing of "Kill the Boer" is also explicable in terms of the national democratic revolution, for that revolution is a continuing process, not something that came to an end in 1994. The song is also a means of generating support for revolutionary thinking among the younger generation. 

The demand by the Black Business Council for black control of Business Unity South Africa is likewise consistent with the NDR objective of establishing African domination over all aspects of society, including organised business as a key centre of power. It would also be consistent with the national democratic revolution if Mr Zuma's chosen voice of business were in due course to be dominated by deployed cadres, among them civil servants, committed less to pursuing the interests of business than to the transformation project.

The NDR also explains land policy. The key objective is redistribution from white to black, not the promotion of black agriculture. So black people have simply been settled on previously productive land without capital, training, title, or much chance of success. This thoughtless policy could have been designed by one Trofim Denisovich Lysenko. Much favoured by both Stalin and Mao Tse Tung, he was the peasant agronomist who thought you could increase crop yields by planting all the seeds very close together on the assumption that, like good communists, they would not compete with one another for water and nutrients. If you challenged Lysenko you went to the Gulag. Needless to say, the outcome was massive crop failure as a result of overplanting, not to mention starvation and even famine.

The NDR of course has major side-effects. One is that the deployment of party cadres to key positions in state institutions tends to promote corruption. Another is that appointments to public office on the basis of political loyalty rather than competence mean a weakening state and decaying infrastructure. Yet another is that political struggles within the party and the ruling tripartite alliance are played out in public institutions such as parastatals, government departments, the police and prosecution services, and the intelligence agencies.

Driving the national democratic revolution

Who is driving the NDR? Some components are driven by ideologically committed ministers, bureaucrats, and party officials. Cosatu sees the NDR as the ‘most direct route to socialism". The SACP plays its part. So also do various non-governmental organisations. The NDR also has a momentum of its own. The more judges find against the government, the greater will be the pressure to bring them to heel via speedier "transformation" of the Bench. The more party corruption is exposed, the greater will be the pressures on the Press.

The in-built momentum can also be seen with employment equity and black economic empowerment (BEE) targets. There is a three-stage process at work with these targets. You set an objective which is difficult to meet. You then use failure to meet that objective as a pretext for setting an even more ambitious one. When this also fails to be met, you say that "transformation" has failed, or that willing-buyer-willing-seller has failed, and that nationalisation is the only answer.

Ironically, the Media provide a following wind on some aspects of the NDR. When the Government complains that employment equity or black economic empowerment targets are not being met, the media often chime in with calls for it to get tough.

Those who "buy into" the "transformation" process need to recognise the risk that they may be giving a blank cheque to the national democratic revolution. There is an analogy with the European Union: you sign up to what you think is a common market, but you wind up unwittingly in a process of incremental surrender of your sovereignty to an unelected bureaucracy.

The future of the national democratic revolution

So, how far will the NDR prevail? The answer depends on four factors:

1. How will its contradictions play out? 

2. What of the countervailing forces?

3. How strong are they?

4. What alternatives to the NDR are available?

The contradictions are mounting. You can barely open a newspaper these days without some or other minister berating the private sector one day - only to call for public-private partnerships the next. The more the State fails... the more the private sector will have to come to the rescue. We can perhaps see this most clearly with plans to rely on the private sector to help with land reform.

Perhaps the most telling contradiction is that the ANC wants South Africa to be counted among the BRIC heavyweights (Brazil, Russia, India, and China) but the NDR will ensure that we are left behind by these and other emerging markets. The ANC thinks it can run a modern economy, fix local government, build infrastructure, feed a growing population, combat crime, tackle poverty and inequality, finance a welfare state, create jobs, and generate electricity - without fixing black education, fully exploiting the skills of the white population, liberalising immigration, professionalising the civil service, or making the country friendlier for business.

You have to be a Lysenko type if you think it possible to keep riding all these contradictions. There are in fact quite a few Lysenko types around. The previous health minister, with her garlic-and-beetroot remedies for AIDS, was one of them. The new health minister's national health insurance scheme may turn out to be another calamitous Lysenko fantasy. 

Apartheid had many Lysenkos, of course, especially all those who thought you could reverse black urbanisation. The weakening of support for apartheid among the Afrikaner elite helped bring it to an end. Support for the NDR is likewise beginning to erode. Last year Kader Asmal called for an end to it. Rob Davies and Ebrahim Patel are true believers, but Trevor Manuel can hardly not appreciate the risks. He of course sits in a Cabinet promising to do what he knows no government can do - create jobs.

Cosatu sees the damage that cadre deployment policy does to service delivery. Even Jacob Zuma wants to limit deployment at local level. A former speaker, who helped Mr Mbeki foil the parliamentary investigation into the arms deal, is now part of a new organisation to defend the Constitution.

If you listen carefully, you can hear the pennies dropping as more and more people realise that corruption is an almost inevitable outcome of cadre deployment and the conflation of party and state. Corruption is actually quite useful in this respect, because it's the one thing our rulers cannot really defend. So continuing exposes thereof, always connecting the dots to the national democratic revolution, are likely to undermine its support base, which is in any event not monolithic.

The NDR is further undermined by countervailing forces. These include people such as Vusi Pikoli and Thulisile Madonsela, who have stood up for the rule of law and for probity in public life. Other countervailing forces are South Africa's long tradition of critical vigilance, now embodied in some leading black journalists, and a vibrant official opposition. An independent press and judiciary are also vital countervailing forces, which is why they are under attack. Nor can implementation of the NDR ignore our international economic linkages and obligations. The private sector is also an important countervailing force, but one susceptible to co-option. On some issues, such as mining nationalisation, there are countervailing forces within the SACP and the Cabinet. The same applies to the trade union movement, many of whose jobs and pensions depend on the economic success of the mining sector.

The next ten years or so are likely to see a continuing battle between the proponents of the NDR and some of these countervailing forces. The ANC will manoeuvre, staging tactical retreats and making compromises as the balance of forces shifts against it, pushing ahead again as the balance of forces shifts in its favour.

One example was the shelving some years ago of legislation to put the Judiciary under state control. It was withdrawn after much protest, but bits are coming back in. Expropriation legislation was also withdrawn after much protest. Bits are coming back via the green paper on land reform. The proposed clampdown on the Press has been withdrawn in the face of far more opposition than the ANC anticipated - including opposition within the ruling alliance. We would be wise to assume that it will be reintroduced in due course in some or other form.

The first lesson here is that principled and public opposition has sometimes been successful. The second is that success is probably only temporary, so you have to stay alert. We must therefore ask whether President Zuma's promise of a commission of enquiry into the arms deal is the start of a proper investigation or merely a tactical manoeuvre to avoid being ordered to appoint one by the Constitutional Court in a case brought by Terry Crawford-Browne in which the Institute is appearing as amicus curiae.

The third is that those who want to influence the outcome have to join the game - at the very least coming to the defence of civil liberties, the rule of law, and the Constitution whenever they come under political attack.

Make no mistake: the increasing attacks on the Judiciary presage attacks upon the Constitution and therefore upon property and other rights, including your right to know about corruption. Don't forget the view in the ruling alliance that the 1994 Constitution was not a permanent pact but simply a beachhead on the way to socialism.

This was confirmed earlier this month when the deputy minister of correctional services, Mr Ngoaka Ramatlhodi, said the ANC had made what he called "fatal concessions" at the time of the political transition. Given the balance of forces at the time, including the collapse of the Soviet Union, it had accepted a constitution which, in his view, "emptied the legislature and executive of real political power' and transferred it to civil society and the Judiciary.

In like vein, the minister of rural development and land reform, Mr Gugile Nkwinti, said last week that if the Constitution stands in the way of land reform, it will be amended.

One advantage the ruling alliance has is that it is able to divide and rule because institutions under attack tend to segregate themselves into silos. The mining industry is not bothered about threats to agriculture and vice versa. Industry is not particularly bothered about threats to the Constitution because those supposedly do not affect business. The private health care industry is divided within itself about the Government's national health insurance plans. The Press has generally been supportive of state intrusion into commerce and industry, but complains when the Government threatens press freedom. And so on.

Working to the advantage of the NDR and weakening the countervailing forces, is that institutions under attack tend to be defensive. We can see this with the response to Malema's nationalisation calls. Often it is tantamount to an admission of guilt. Without realising that this is a game it cannot win, business says: "Yes, we admit we haven't transformed fast enough but we are going to try harder now."

Pravin Gordhan said last year that South Africa had little to show for BEE - quite an admission after some R600 billion worth of BEE transactions! And black business, judging by its own complaints and by Mr Zuma's remarks three weeks ago, when he bewailed the absence of black industrialists, has not made much progress. Zuma says share ownership means nothing! If R600 billion has made so little impact, would another R600 billion do much better? Or would the opportunity costs actually make things worse?

There is a risk that defensiveness which results in acquiescence in stiffer BEE requirements will mean even less investment in local mining, for example. More BEE could therefore mean not less, but more, unemployment and greater inequality - precisely the ills supposedly fuelling the nationalisation demands.

I say "supposedly" because the NDR is an ideological project, not a response to social and economic problems. Its aim is not growth, but redistribution. Moreover, it will pursue redistribution and "transformation" irrespective of the damage to growth.

Shifting the paradigm

It's time to shift the paradigm. Here there are opportunities to seize. 

The Government issues frequent threats to the agricultural sector, yet it takes the country's food security for granted - as does the public at large. The opportunity here is a public campaign to point out the destructive consequences that land nationalisation would have not only for food security but for the livelihoods of hundreds of thousands of workers and their families on commercial farms.

Another opportunity arises from Pravin Gordhan's apparent attempt to make the private mining sector the scapegoat for his government's own failures. He recently complained that mining companies did not invest in South Africa when commodity prices boomed. This is an opportunity to spell out in some detail - for a very wide audience, not just the financial Press - the consequences of the often hostile policies adopted towards the mining sector, along with the malfeasance surrounding some mining licences.

Another opportunity arises from the ANC youth league's recent statement that 38% of urban South Africans want mines to be nationalised, 28% are opposed, and 34% are not sure. Is anyone trying to influence those 34% "don't knows" by offering them something better. Nationalisation is a garlic-and-beetroot policy, but it may be ideologically and symbolically attractive to people to whom little opportunity is on offer. There is a vacuum here waiting to be filled. With what?

A real transformation agenda

Transformation as envisaged in the national democratic revolution boils down to African nationalism laced with socialism and pervasive party control. The NDR is a formula for consuming, even destroying, not creating, wealth. This means that we can at best plod along at around 3% growth. Quite a few blacks will get richer, continuing a process already well under way. Whites will generally stay the best off.

However, for most black South Africans the NDR doesn't actually mean any transformation at all. It condemns them to lifetimes without jobs, hope, or the ability to read and write, and to increasing dependency on the State. Abolishing labour brokers means kicking away the ladder that poor young people need to enter the labour market. Hostile laws and incompetent bureaucrats undermine the prospects for small business - the new CEO of Business Unity South Africa thus recently said that feedback from small, mainly black businesses, is that the government treats them like dirt. Failure to provide secure individual title for black peasant farmers in the former homelands, or for black farmers in the proposed new agri-villages, or for many urban householders, denies them the opportunity to start climbing the ladder on which free enterprise is built. So many policies are so hostile to the poor that it sometimes seems as if keeping them poor and dependent may be deliberate.

So the challenge is to offer them hope and opportunity. This means showing how doubling or tripling the growth rate is essential to generating jobs, and how a much friendlier investment climate is essential to speeding up growth. It's a task for all of us, including risk-taking entrepreneurs and capitalists. Business in general needs to get out of the confessional and start blowing their own trumpet, telling the truth about what really needs to be done to conquer poverty, which they alone can do. Government's job, as Gear in fact recognised, is to ensure that the conditions are right for the creation of wealth by the private sector, whether small-scale entrepreneurs or large corporations.

When I first raised queries about the national democratic revolution, a man describing himself as a "long-standing member of the ANC" wrote to me asking whether my critique of wrong-headed policies arose from a fear of losing white privilege. It's a fair question. But the answer is that if you destroy property rights you destroy the very basis of risk-taking and wealth creation on which all our futures, black as well as white, depend. If you alienate white skills in a country where skills are so short, you deprive the country of a key source of growth. One reason why the National Party abandoned apartheid was that denying rights and opportunities to blacks harmed the economy and therefore whites as well. The national democratic revolution will eventually have to be jettisoned because black nationalism will be as destructive as was white.

Two scenarios

We face two broad scenarios. One is continued downward slide, as happened with much of Africa in the last 50 years. In the end many of those countries had to bottom out and embark on political and economic liberalisation. They had no choice and we won't either. But enormous damage was done first.

A better scenario means avoiding what much of the rest of Africa did wrong. That is why the Institute has prepared an analysis of the national democratic revolution. The better we all understand the ideological thrust of policy and the "strategy and tactics" for implementation, the better our chances of counteracting the risks - defending what must be defended, supporting the countervailing forces, and putting forward alternatives.

The contradictions and failures make the climate for alternative ideas auspicious. So does the fact that the ANC is running out of role models. Thabo Mbeki seems to have had doubts that the NDR could be implemented if the USSR was no longer there. China and India are liberalising, Venezuela is heading for collapse, Gaddafi is out, Mugabe won't last for ever, and even the Castro brothers are liberalising. The entitlement state in Europe and America is unsustainable.

Detailed policy work on alternatives will of course be necessary. But the main point at this stage is to change ideas, preparing the soil, as it were, for new policies to be planted. The ruling party must be a prime target, but so must the public at large.

Conclusion

Don't forget, let me say in conclusion, that ideas predate policies and that their power, for good or ill, should never be underestimated. The ANC is well aware of this, which is why winning the "battle of ideas" against liberalism is so crucial to the national democratic revolution. And it was after all, that great incendiary journalist and armchair revolutionary, Karl Marx, who produced some of the most powerful ideas in history.

Some of these ideas still have an iron grip in South Africa. They need constantly to be countered by the ideas that underpin liberal democracy.

Essentially these mean replacing apartheid not with another form of social and racial engineering, but with a free and open society committed to the rule of law, clean government, sound money, amicable race relations, stable family life, secure title for everyone, open labour markets that the poor can enter, and an economy built not on state control and open-ended redistribution but on free enterprise, individual opportunity, and growth* 28th September 2011 

Issued by the South African Institute of Race Relations, September 28 2011

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