Pay the workers and stop promising too much, Mr Cutifani.

The strike in the platinum mines might go on for a month or more without any resolution. The workers are determined to hold on. Many of the workers have a home that produces incomes in kind, as well as support and sympathy from families and friends. Indeed, the workers have the sympathy of the broad public. Half of the employees in South Africa are paid R3300 or less per month (StatsSA). They and their families have a life to gain from the mine workers being successful in leading a wage revolution.

 But this is a misdirected sympathy howl the corporate cry-babies. The 9% offer from Angloplats, Implats and Lonmin is the rational, neigh even the scientific, solution to the conflict. The "ignorant" R12500 demand is a working class pipe dream that will crush platinum mining in SA. "Amcu is demanding too much", even now when the union agreed to phase in the R12500 in basic salary over 4 years, whilst limit increases of all other benefits, allowances and bonuses at the rate of inflation.

The business press fails to understand that the Amcu leaders are straining to the limit their relations with the rank and file by tabling this reduced demand.

 An "unskilled" worker in grade A4 at Angloplats has R5400 in basic wage. With an annual R1775 increase he or she will reach R12500 in the fourth year. Looked at superficially this amounts to a 32.9 percent increase for the first year, and falling gradually to a 16.6% increase in the fourth year. But if other allowances and pension costs comprise about 42 percent of the total gross remuneration as in 2012, and assuming official inflation of 6% for the next four years, the total nominal wage increase in percent for the first year, for this pay grade, would be 21.6% and fall gradually to a total increase of 12.1% in year four.

All the other grades organised by Amcu, in pay grades B and C, start the increase in basic salary from a higher or much higher level. They reach a basic salary of R12500 much easier. The highest C grades have it already. We need the number of employees in each pay grade to know exactly - and the SA employer strategy is to hide information - but Amcu's demand surely means that the total wage bill for all its members increases by far less than 20% the first year and close to or below 10% in year four. Especially, of course, if inflation is well below 6%.

We are speaking of a wage revolution, but at the expense of profits, not at the expense of production of wealth, and if Amcu can make any more concessions it must be the demands for pay grades C (in line with letter and spirit of the Employment Equity Act). From C1 and upwards the basic salary starts close to or above R12500. In fact, wages to these categories differs immensely between the three giants, so much so that one can wonder what keeps them together at the table. It cannot be wage policy.

 But perhaps it is profit policy. Profits are Policy. It is nonsense to regard demands for profits as the voice of science rather than the interests of specific and small elite, i.e. political group promotion. The public witnessing this battle, as well as the workers living it, must therefore ask what the mining bosses and their constituents, the big shareholders and financial institutions are demanding, exactly.

 Already in 26 July last year, the outspoken new CEO of Anglo American (AA), Mr Cutifani, went public about increasing "return on capital" invested in the giant to "the north of 15%", sending a message "WE HEAR YOU!" in his presentation to firms like JP Morgan Cazenove, SBG Securities, Deutsche Bank, Morgan Stanley and Citi(Business Day, 28/7 2013). This goal and promise is reinforced in AA's 2013 annual report, which says repeatedly that the new profit levels will be reached by 2016 (Business Day, 25/3 2014).

 What is this about? It is about setting a preposterous profit benchmark for the SA mining industry in general and for platinum mining specifically. Business doesn't get it. The Business Day articles and the 2013 annual report of AA compare with the 30% "return on equity" boom six years ago, largely driven by platinum mining.

 Let us play with the numbers to see the essence of this. Angloplats has 51 000 permanent employees. AA owns 78 percent of Angloplats. The CEO of AA promises an increase in Return on Capital Employed ("ROCE") in Angloplats mother company, going from 11 percent in 2013 to a "minimum" of 15 percent "ROCE" by 2016. AA's version of this profitability measure is the "underlying operating profit divided by capital employed", but which is attributable to the equity shareholders of AA themselves. That was $4,369 million, says the 2013 annual report. We divide that number by $39 billion ("employed capital attributable to AA's shareholders") and find a "ROCE" of 11.2 percent.

 Very well! It is in this situation that Capital demands, through the voice of Mr Cutifani, that "ROCE" at AA -the giant trend setter and no doubt acting Business chief whip in the platinum mining bargaining team - increases to 15 percent. In 2013, that would have meant going from $4,369 million to $5,850 million in profits. This mere increase of $1,481 million cautiously corresponds to 15, 699 million rand at an R/US$ exchange rate of 10.60, or an increase by R15.7 billion.

51 000 are permanently employed at Anglo Platinum. But if we divide this demanded profit increase of R15 699 000 000 to every one of 158 900 permanent and contracted staff in the whole world wide AA mining empire, we land on an average wage increase of R98,800 per year or R8,200 per month, by far overshooting the demand tabled by Amcu in the platinum battle. Indeed, "Capital" demands this increase for itself: the big shareholders demand this as a work free income from capital. They demand an increase by 33.9 percent. You will have it in two years, says Cutifani.

The low wage regime in SA mining must fall. It will fall through drastic wage increases at the expense of profits and also, of course, through mechanisation that increases wealth production per worker underground and brings down the death and illness toll. With a government that intervenes against the blind market, plans and facilitates transfer of labour power to other industries, this development will benefit labour. Alone thousands of jobs are needed to clean up and rehabilitate land destroyed by mining.

 As for beneficiation, the SA platinum industry marks itself out as having a value chain, from mining to car industry. Yes, platinum from mines will be more expensive when the value of mining labour power increases. But instead of looking at the recycling of metal as a threat, it should be regarded as a beneficiation opportunity, knowing that mining exploits a finite resource: it will all end. Indeed, profit maximising Time-Is-Money mining will end it faster.

 The corporate and political elite seem to believe that the present labour revolt in mining is created by anarchist agitators or "bad education in economic realities". This is guided by the will not to know. The revolt and the strikes are created by low wages and unbearable conditions in the mining shack lands. This is the economic reality. It is the real reality.

It must be recognised as an objective factor, as opposed to the routine objectification of the subjective investor appetite for more profits, addressed by Mr Cutifani in his preposterous promise to the Finance Houses in US and Europe. To refuse radical wage increases at the expense of profits today is to accept and pave the way also for the political dictatorship of the so called "Mineral Energy Complex" (as if South Africa hasn't already had enough of its economic diktats).

 The Department of Labour, the DMR and the Chamber of Mines wish for a "modern" and "reasonable" trade union bureaucracy to collaborate with. This is the real pipe dream today. Unlike the wage demands of the mine workers, it has no material basis. "Established" and "reasonable" - this is precisely what NUM had become in the platinum belt. It led to NUM's demise. The material base for civilised political arrangements between Capital and Labour can only be civilised wages and civilised working and housing conditions for the broad mass of workers and their families. If that material and real economic foundation is lacking, there can be no orderly labour relations. And in a capitalist class society of the South African extremist type, outright socialisation must bang on the door.

Liberals and democrats who wish a defeat of Amcu in the present situation will soon find themselves supporting a police state in the mining areas. They should wish for Amcu's success, but even more for a Labour government that sides with the unions, the workers and the poor, instead of with the capitalists and their blind bigotry; with those who claim they have superior knowledge about "the economy", but have understood nothing.

 Dick Forslund is senior economist at Alternative Information and Development Centre in Cape Town.

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