No 157 SECOND QUARTER 2001

 

Published quarterly as a forum for Marxist-Leninist thought by
the South African Communist Party

CONTENTS

EDITORIAL NOTES

Build a people’s economy – defend the public sector!

ARTICLE 1

A Political assessment of the current conjuncture: Challenges
facing the working class in the national democratic revolution

ARTICLE 2

Restructuring of state assets - SACP input to alliance
10-aside held on July 16.

ARTICLE 3

The role of the state in capitalist industrialisation: a
short study of ESKOM

ARTICLE 4

Is the Multi-billion Rand Arms Deal in the Interest of the
Working Class?

ARTICLE 5

Impressions and Memories of Communism in South Africa

ARTICLE 6

Envisioning Real Utopias

ARTICLE 7

The new global economy

EDITORIAL NOTES

Build a people’s economy – defend the public sector!

The SACP Central Committee, meeting over the weekend of September 14th
– 16th, devoted considerable time to discussing the unity of our
ANC-led tripartite alliance. Sharp public divisions had emerged within the
alliance in the run-up to the COSATU-led anti-privatisation strike action, which
was supported by the SACP, but criticised by the ANC and government.

The Central Committee believes it is time to throw our full weight behind
re-building the unity of our alliance. We believe that the mass constituency of
our alliance, which has often been confused and distressed in the recent period
by leadership spats, expects nothing less from all of us.

Of course, this unity cannot be an unprincipled or merely sentimental unity.
The Central Committee believes that a key component of rebuilding unity lies in
reaffirming the shared commitment of all alliance partners to the defending and
building of an effective, democratic, strategically located public and
parastatal sector, in the context of a mixed economy.

There may still be many differences within the alliance, but if we focus on a
shared strategic commitment to building an active public and parastatal sector,
then our differences can more usefully be characterised and managed. Instead of
getting stuck in two trenches, a pro-privatisation and an anti-privatisation
trench, let us rather begin with building confidence in an effective public
sector. Our differences around how to foster such a public sector can then more
effectively be subjected to the test of rational debate, case by case
examination, and to an ongoing review of our actual experience of restructuring
of publicly-owned assets over the past six years.

To re-locate ourselves, as an alliance, on this more favourable terrain
requires disciplined and intelligent engagement from all sides. We need to
avoid, in the first place, wild claims and allegations that simply heighten
tensions. From the side of many in COSATU and the SACP, we need to avoid
dogmatic fundamentalism, we need to appreciate that in our current global and
national reality, the public sector has many limitations, and we need to work to
discipline, regulate, but also attract, private sector investment, technology
and expertise. From the side of government, comrades need to communicate much
more effectively with our mass base. Statements that might win the short-term
approval of potential foreign investors, but which confuse our mass
constituency, are self-defeating. Some comrades in government have,
understandably, reacted with anger to the accusation that they have "sold
out" on the Freedom Charter, or the RDP. But the same comrades seem never
to react with equal outrage when the commercial media, day after day, portray
them as "tsars of privatisation". Failure to set the record straight
might, momentarily, impress potential private sector investors, but it quickly
creates confusion in our mass constituency. It gives credence to the claim that
the term "restructuring" is simply a fig-leaf to cover up the
"real intention", which is to sell off the family silver.

We have, jointly, to rebuild our own confidence in the critical role of the
public and parastatal sector, and we have to be prepared to argue this
confidently in the public domain.

The case for growing and transforming the public sector embraces three
critical dimensions – social delivery, economic growth and national
sovereignty.

The profit driven private sector is absolutely incapable of ensuring the
efficient, affordable and sustained rolling out and provision of basic social
needs like water, electricity, transport, land, telecommunications, health-care
and education.

While a wider range of forces is beginning to accept the argument for
publicly-owned entities for social delivery, the economic growth and development
role of the public sector is less frequently recognised, yet it is equally
critical. The myopic, short-term vision of private sector investors is entirely
inadequate to overcoming the huge structural distortions of the South African
and Southern African economies. We need an economically active and strategically
effective public sector for sustainable economic growth. The role of a
publicly-owned IDC in providing the necessary kick-start to the Mozal
development in Mozambique is a case in point. Private sector investors simply
boycotted the project until the IDC put up 20% of the capital required to get
this major aluminium plant outside Maputo up and running.

An effective and growing public sector is also critical to buttress national
sovereignty in a wide range of areas from public broadcasting, cultural
development, to the safety of citizens and security at airports. The
privatisation frenzy threatens not just social security and sustainable economic
growth, it also threatens the safety and moral character of the society we are
trying to build.

Fostering efficient and accountable corporate governance of publicly owned
entities is part of building a powerful public sector. We do not want to defend
a bureaucratic or purely legal state-ownership of economic entities. Indeed,
many of the weaknesses of the recent past in South Africa have not been due to
privatisation so much as weak public sector corporate governance – the recent
examples of the Post Office (where ownership remains public, but where there was
a disastrous strategic management partnership with the privately.owned New
Zealand Post Office) and SAA are, perhaps, cases in point.

The key objective of the SACP in the coming period is to build alliance unity
around a commitment to building an effective, democratic public sector. Ongoing
popular mobilisation must, at all times, be geared to ensure that we take
forward, rather than compromise, the consolidation of a united alliance
perspective that enjoys the support and understanding of our mass constituency.

80 Years of Unbroken Struggle for National Liberation, People’s Power and
Socialism

During the month of July, the SACP celebrated its 80th
anniversary. The activities which marked this anniversary included two major
national rallies, a veterans’ dinner, the unveiling of a memorial plaque in
the street where the SACP was founded in Cape Town, and more than seventy
Workers’ Assemblies. The activities directly reached out to at least 50 000
poor and working people in our country. Through these activities we were able to
look into our history and our current role.

Working people who took part in the Assemblies raised and discussed with SACP
structures a range of issues and concerns including unemployment, poverty,
homelessness, the state of the public health system, corruption, the role of
parastatals in development, problems with the pension system, calls for specific
SACP interventions in the mining sector, slow housing delivery, slow land
reform, problems with financial institutions, the need to rekindle the link
between the people and their leaders, the role of the SACP in parliament and
government, and so on.

Our cadres are taking up all of these concerns in a variety of ways. The SACP
will continue to deepen its organic links with working people in our country.

The tragedy in the US and the increasing noise of war drums

This African Communist comes out in the immediate aftermath of the tragic
attacks on New York and Washington. . Absolutely nothing, no ideology, no sense
of grievance, no injustice suffered can remotely begin to justify these
barbarous actions. The SACP has been in dynamic contact with our many American
friends to express our solidarity and condolences.

Those responsible for these terrorism attacks must be brought to book, and
tried in the context of appropriate international law. There is, unfortunately,
a danger that the US administration will take advantage of this tragedy to
strengthen forces of repression and international military aggression.

This is time for the US to demonstrate maturity and restraint. Fanning
chauvinistic anti-Arab, Islamo-phobic sentiments or stirring up mass hysteria
around the call for revenge will be absolutely counter-productive.

If, indeed, the US administration is right to characterise the attacks as
being not just against the US, but against human civilisation, then all people
of the world who espouse democracy and human solidarity should have a say in the
appropriate response. For the SACP this response must be building global
solidarity with people around the world struggling against war, poverty and
exploitation and deepening the movement to protest unilateral aggression from
whatever side. We call on all progressives in the US in particular to use this
tragedy to open up a rational, intelligent, balanced and introspective debate on
the role and responsibility of the US and its people in the world in the
struggle to ensure peace, development and a more equitable world. It is in the
self-interests of the majority of the people of America, and all humanity that
this happens.

Apology

The Editorial Collective of the African Communist once more apologises to all
its readers and subscribers for the very late publication of this second quarter
issue.

ARTICLE 1

A Political assessment of the current conjuncture: Challenges
facing the working class in the national democratic revolution

This is an edited version of a paper presented by the SACP
to the SACP-COSATU bilateral held on 26 July 2001.

Introduction

A meeting of this nature is long overdue. The meeting between our two
organisations – the two socialist components of our Tripartite Alliance – is
necessitated by the intensified struggles to shape the kind of a South Africa we
are seeking to build. It is important in this context to clearly define our
understanding of the current period as well as the kinds of struggles we need to
wage to build the capacity of the working class as the motive force of our
revolution.

The following input by the SACP is an initial attempt to survey some of the
key issues we need to discuss and confront, as a starting point to what we see
as an on-going process of engagement between ourselves. This input therefore
seeks to do two interrelated things. Firstly, it is an attempt to summarise some
of the key discussion documents and policy positions of the SACP as developed
over the last two to three years on the current political situation and the
challenges facing the working class. We thought that it is important to share
these perspectives, as we have not done so for a while at this level. The second
objective is to contribute to what we hope will emerge, in the coming period, as
a common working class analysis of the current political situation and the tasks
of the working class during this period. We are therefore presenting this not as
a final definitive analysis, but as a platform for debate and discussion.

This paper is informed by the reality of

1. Seeking to deepen the NDR on the terrain of capitalist dominated global
   and national conjunctures

As the working class we are waging the struggle for the deepening and
consolidation of the national democratic revolution n a terrain not of our
choosing. Specifically we are struggling to consolidate the NDR on a terrain
of capitalism. Much more critically our country, in the light of the deepening
capitalist and neo-liberal global restructuring, has entered a stage where it
is becoming clear that it is the working class, including the urban and rural
unemployed and poor, that s bearing most of the brunt of current economic
restructuring. As the SACP we have consistently argued over the last few years
that this is neither desirable nor inevitable.

We need to surface and frankly grapple with the kind of accumulation regime
underway in our country, and to what extent this regime is fostered,
consciously or unconsciously, by present government economic policies.

During the transition there has been weak growth and a relatively weak
accumulation process. For many of the major South African corporations, the
key strategic objective has been to disinvest, to use huge capital reserves,
generated over decades of apartheid to now accumulate in other markets.
Government’s liberalisation measures have, by and large, played directly
into this agenda. This is not to say that there has been no capital
accumulation within South Africa. However, insofar as there are some new (or
perhaps persisting and residual) accumulative processes under-way, the
following statistics provide some pointers:

• total compensation of workers increased by 5,7 percent in nominal terms
  for the year to September 2000. After inflation, workers as a group
  effectively received 0,8 percent less than the year before. Over the same
  period, the operating surplus of companies increased by 17 percent, a
  whopping increase of 10 percent in real terms.
• For the same period total compensation of employees as a percentage of
  gross domestic product fell to its lowest level since 1980. This reflects,
  principally, the very substantial job losses in the formal sector over the
  last six years. Firms, however, had their biggest slice of the cake since
  1980, with surplus as a percentage of GDP at is highest point in 20 years.
  Shareholders have benefited relatively, while workers have lost.
• The final 15 years of the apartheid era saw a massive transfer of wealth
  from poor to rich (the income of the poorest 60 percent dropped by about
  35 percent). However, by 1996 we had not reversed the trend, on the
  contrary the gap between rich and poor had grown even greater. In 1996,
  the poorest quintile of the population received 1.5 percent of total
  income, compared to the 65 percent received by the richest quintile, and
  the 48 percent by the richest 10 percent.
• The "deracialisation" of wealth, power and privilege is often
  exaggerated. The emergence of black strata of the bourgeoisie is extremely
  limited, and is largely based either on relatively crude plundering of
  public resources, or on complicated financial gearing and share
  acquisitions that are typically initiated by white and international
  capitalist forces themselves for pre-emptive, buying-off purposes, or to
  acquire political influence and credibility. Nonetheless, notwithstanding
  these weaknesses, the most significant deracialisation has indeed happened
  at the upper quintile level. The proportion of urban Africans in the
  richest quintile increased five-fold between 1990 and 1995 (from a mere 2
  percent to 10 percent), a trend that has probably continued. However,
  poverty, marginalisation, unemployment, vulnerability to disease remain
  overwhelmingly racialised (and gendered).

(statistics from South Africa: transformation for human development
2000, UNDP; and Bureau for Economic Research)

We believe that these trends are indicators of accumulation and class
formation processes under-way. They underline just how difficult it is to
implement a thorough-going NDR on the terrain of a capitalist economy, and in
the broader context of an imperialist and considerably uni-polar world. Above
all, they underline the need for clear analysis, and for much greater clarity
around our understanding of motive forces, and the principal strategic dangers
to our NDR.

What needs to be underlined is the fact that capital accumulation is not a
neutral phenomenon. What this requires therefore is a deeper analysis of the
nature of the current regime of capital accumulation and identifying its main
beneficiaries. The current working class struggles, not least the current and
planned strikes, are also a response to the neo-liberal position, which
envisages growth in South Africa as that which should strengthen the power of
the capitalist class with the promise that this will trickle down to the
working class and the poor. The very restructuring of state assets seems to be
more informed by this kind of approach than to foster a developmental role for
these institutions.

The distinct feature of South Africa’s transition to democracy therefore
is that while the apartheid regime has been removed, and significant progress
made to consolidate our political democracy, South African capitalism,
dominated by a powerful white monopoly capitalist class, remains intact,
through not without its crises.

The above reality is manifesting itself in a number of other ways. First
and foremost in the job-loss bloodbath underway, is a concrete manifestation
that it is the working class, particularly its organised sections, that is
being asked to sacrifice its jobs in order to "turn our economy
around". Related to this is the growing ideological discourse,
manifesting itself in a number of different, but essentially common, ways
seeking to justify the sacrificing of the working class in current global and
national economic restructuring.

One ideological justification for this is that the working class must
"grow up", be "realistic" and understand that
globalisation is all over us. Another variation of the same ideological theme
is that the working class, in seeking to defend itself and challenge the terms
of economic restructuring, it is acting as an "aristocracy" and in a
"selfish" manner. Again, in seeking to justify the attacks of the
working class and demonise its struggles, we are being told that the time for
"adversarial" labour relations is over, as if capitalism has stopped
being adversarial and had stopped exploiting the working class.

Another variation of basically the same theme, sometimes found within the
ranks of our own broad movement, is that for the trade union movement to act
in a revolutionary manner it must understand the "broader picture"
(the necessity for current job destroying economic restructuring in order to
create jobs in the future!). But nowhere is it clear how the working class
interests are factored in this argument or how is this linked to advancing the
interests of the working class as the main motive force in the revolution. In
essence, this argument, practically translates into asking the working class,
in the name of broader revolutionary understanding, to approach the transition
and the current period from class interests other than its own!

Linked to the same ideological theme, are attempts to project the SACP as
an irrelevant factor or tailing behind the trade union movement. Indeed it is
important for the Party that it should jealously guard its independence,
strengthen its vanguard role and not to tail behind trade union struggles. But
practically, this criticism seeks to dissuade the Party from throwing its
weight behind, and seeking to lead, working class struggles, particularly
those of organised workers.

The net intentions of all the above is to seek to marginalise socialist and
left approaches to the task of deepening the national democratic revolution.
One particular expression of this is the tendency to describe working class
struggles as essentially being sectarian and narrow by virtue of being working
class struggles. Of course it is important that we should constantly guard
against the working class acting in a narrow and sectarian manner, just as the
working class should guard against the danger of acting as if there is no
reality of capitalist globalisation and the overwhelming dominance of private
capital. But to characterise working class struggles as being inherently
narrow and sectarian, is to seek to privilege other class interests, thus,
consciously or unconsciously projecting those as being in the national
interest.

In a way what we see in our country today is not something new but a
combination of what Lenin observed and warned about in Russia in 1905:

Intellectual bourgeois know full well that they will not be able to get
rid of the working class movement. That is why they do not at all come out
against the working class movement as such, or against the proletariat’s
class struggle as such – no, they even pay lip service to the right to
strike… In other words they are fully prepared to "yield" to the
workers the right to strike and freedom of association (which in fact has
already been won by the workers themselves), if only the workers renounce
their "rebelliousness", their "narrow-minded revolutionism",
their hostility to "compromises of practical use", their claims
and aspirations to place upon the "revolution of the whole Russian
people" the imprint of their class struggle, the imprint of proletarian
consistency, proletarian determination… That is why intellectual bourgeois
all over Russia are exerting every effort, resorting to thousands of ways
and means – books, lectures, speeches, talks, etc. – to imbue workers
with the ideas of (bourgeois) sober-mindedness, (liberal) practicalness,
(opportunist) realism… (In) appearance (these) coincide with Marxist
slogans, and, with some minor omissions and slight distortions, can easily
be confused with and sometimes even passed off as (socialist) slogans…
Actually, however, it is a bourgeois imitation of (socialism), an
opportunist distortion and perversion of the concept of the class struggle…
At the root of all this gigantic bourgeois subterfuge lies an urge to reduce
the working class movement mainly to a trade union movement, to keep it as
far away as possible from an independent policy…

We are highlighting these issues in order to illustrate the importance of
constantly seeking to analyse and understand the current period from a
consistently working class perspective. We should not allow ourselves to be
diverted from this path, as it is only the interests of the working class that
are capable of being the interests of society as a whole. These issues also
serve to underline the fact that one of the sharpest contradictions in the
current period is that of deepening the NDR on a terrain of capitalism. Indeed
we knew that the defeat of the apartheid regime would not mark the end of
capitalism. But to seek to deepen the NDR without sufficiently analysing the
nature of our capitalist terrain can act to undermine the very goals of the
NDR. It therefore requires of us to approach the NDR from the standpoint that
it is a struggle to confront three interrelated contradictions, the class,
national and gender contradictions. It is a fact that the national
contradiction (racism and the legacy of national oppression) still remains the
dominant contradiction in our society, this contradiction cannot be addressed
except inunless in its relationship to the class and gender contradictions.

Indeed it is important to recognise that the 1994 democratic breakthrough
was a very important achievement for the overwhelming majority of our people,
and the working class in particular. Since then we have seen major advances
made in establishing a labour market regime, that entrenches some of the most
important gains of the working class. Our government has also made important
strides in addressing matters related to the improving the socio-economic
conditions of the overwhelming majority of our people.

However, if we are to sustain and defend these gains, as well as to
properly understand the challenges facing the working class at this point in
time it is important that we correctly understand both the global and national
terrain within which we seek to deepen the NDR.

2. The nature and challenge of the current global conjuncture

In approaching this question, as the SACP we are guided by our 10th
Congress Party programme

From its launch in 1921, the Communist Party in South Africa has committed
itself to an internationalist perspective. We have always sought to understand
the interconnectedness of our own struggle with socialist, working class,
democratic and liberation struggles around the world… The SACP is today
convinced that internationalism is more relevant than ever before… A
strategic understanding of present international forces is central to
developing a clear programme for the South African transformation struggle
(p.19)

Analysis of To analyse the global conjuncture needs to be conducted not
only to is not only informed by the necessity to locate the NDR and the
struggle for socialism in its proper international context, but also because
there are differences within the broad liberation movement about the character
and challenges of the current global conjuncture.

2.1 Globalisation is imperialism

The SACP advances this, perhaps obvious, perspective, not for the
purposes of a rhetorical flourish, but to ensure that we approach current
international realities scientifically, and not just descriptively. For the
past 25 years or so, there has been another intensified wave of
internationalized capitalist expansion, driven, not just by technological
advances (notably in ICT) but also by sharpening and systemic internal
contradictions (notably declining profitability in the core centres of
capitalist accumulation).

To side-line the concept "imperialism", displacing it with the
vague and entirely descriptive term "globalisation" runs the risk
of portraying current international realities as largely neutral and benign
processes, brimming with positive possibilities, apart from a few
"market failures". The latter are portrayed as the result of a
combination of developing countries and their governments failing to
"adapt" to the new realities, and of some unfortunate aspects
("oversights") in the international "rules of the game",
which we need now to "change" through persuasion.

When we speak of imperialism, we are not using the concept as a mere
emotive slogan, or as a swear word. Lenin’s development of the concept,
for instance, is thoroughly dialectical. Imperialism (like the broader
category "capitalism" of which it is a part) is, in some ways, a
progressive, innovative and historically objective reality which produces
many things that are essential for socialism, including the historical
forging of an increasingly internationalized working class itself. But when
we speak of globalisation as being essentially a new phase of imperialism,
we are reminding ourselves that it is a process that is riven with systemic
contradictions, that is based on super-exploitation, and that is
simultaneously a process of development and systematic under-development.
While engaging with this reality is unavoidable, simply "joining"
it, or "structurally adjusting" to it is no solution to its
systemic contradictions. While changing the "rules of the game"
(if this is possible) may be a worthwhile tactical and short-term endeavour,
it is no substitute for a consistent struggle for the transformation and
abolition of imperialism.

We do sometimes find a vulgar or pseudo-Marxist appropriation of the term
"globalisation", including within our movement at times. This
argument seeks to use Marxism one-sidedly, particularly the Communist
Manifesto, to justify globalisation as an inevitable, objective process of
capitalist development. Globalisation is those things, but it is no less
barbaric, no less riven with contradictions, and no less incapable of
securing development and human civilisation for that reason. This vulgar
Marxism (drawing on a long tradition) argues that we must "allow
capitalism to run its full course", l before it can be destroyed. Any
serious challenge to it at this point is presented as "premature",
as the worst form of voluntarism. Thus those who seek to challenge the logic
of capitalist globalisation are normally dismissed as
"unrealistic", "infantile", "ultra-left" and
not understanding the contemporary realities that we face.

Apart from the obvious vulgarisation of Marx, Engels and Lenin in the
above argument, there are a number of other serious weaknesses in it. This
argument essentially enjoins us not to wage a struggle against capitalism
and imperialism, but rather to seek the best possible terms of incorporation
under the present international economic order. This argument emphasises
only one side of Marxism, that of its analysis of the economic logic and
development of capitalism, and expunges the other more critical dimension -
and in fact the core of Marxism - which is the waging of class struggle. Not
only does the argument side-line class struggle, but it presents the
economic logic and development of capitalism as a relatively smooth
progression, free of systemic contradictions.]]]]This is tantamount to
unilateral ideological disarmament.

Globalisation is both an objective and alterable process. It is the
development of a particular mode of production – capitalism and capital
accumulation. To emphasise only its objective character (and then in purely
technical, and evolutionary way)– as vulgar Marxism does – leads to the
disarming of forces wanting to challenge capitalist globalisation. To
emphasise only the subjective character of globalisation is infantile. Both
positions are unMarxist.

Sometimes it is said that to point out the imperialist character of
globalisation is to fail to understand or is to resist engagement with
globalisation. Nothing could be further from the truth. To engage
capitalist globalisation from an understanding that such engagement has to
be informed by an anti-imperialist approach is a far more realistic approach
than that which seeks to de-emphasise imperialism. As the SACP has
consistently said, to engage with global realities without a sufficient
analysis of its capitalist character is bound to lead to a lot of problems.

2.2 Globalisation is the simultaneous integration and marginalisation
of developing countries

The one defining feature of imperialism is that of forever drawing all
the countries of the world into its economic orbit, but under terms and
conditions that favour the developed countries at the expense of developing
countries. This constitutes one of the major contradictions of
globalisation. This simultaneous integration and marginalisation captures
the realities that to be integrated does not in itself translate to benefits
for the developing world, precisely because of the imperialist and
capitalist character of globalisation. Integration also means the narrowing
of progressive developmental options for the developing countries – thus
having no choice to experiment with developmental programmes beneficial to
their people. It is therefore incorrect to assume that to be integrated into
globalisation comes with benefits.

The most significant expression of this phenomenon of simultaneous
integration and marginalisation are the structural adjustment programmes (SAPs)
imposed by the IMF and World Bank on developing countries. In essence the
prescriptions of SAPs aim at opening the developing world to the
profit-seeking activities of the transnational corporations through
liberalisation, privatisation and deregulation. These programmes have
nothing to do with addressing the socio-economic needs of the majority of
the population in these countries. In essence, developing countries are
integrated through marginalisation, because their location at the periphery
is both a cause and an outcome of the imperialist nature of capitalism. The
converse is also true, that developing countries are marginaliszed through
the processes of integration into global capitalism, as their integration
makes them dependent on the prescriptions of the international economic
order.

This thesis is also important in highlighting and exposing another myth -
that we as a country are supposedly "returning from our apartheid-era
exclusion from the family of nations". In fact, colonialism and
apartheid were not exclusions, but the very ways in which South Africa was
integrated through marginalisation into the broader imperialist system..
This further highlights the importance of collective struggle with other
developing countries in order to challenge the very logic of imperialism in
the current period. This is also important to challenge neo-liberalism,
which strangely enough shares the same view as vulgar Marxism, that
marginalisation is as a result of the failure of countries to create
conditions and the correct "signals" for full integration into
capitalist globalisation. It is for this reason that the neo-liberal
prescriptions simultaneously deepen integration and marginalisation. The
faster the developing countries are integrated – opening their economies
up – the deeper they are marginalised. This is even more acute for the
African continent as shown by 20 years of SAPs.

The process of simultaneous integration and marginalisation throws many
developing countries into an even deeper cycle of contradictions. The more
they open their economies, not only do they get marginalised from the
mainstream global economic benefits – "top-down"
marginalisation, but the governments in those countries also get
marginalised from their masses – a "bottom-up" marginalisation.
The Zimbabwean case is a classic example of this phenomenon of simultaneous
integration and marginalisation from both the mainstream global economy as
well as from its populace, as a direct result of the effects of SAPs.

2.3 Globalisation simultaneously weakens and strengthens the
contemporary nation-state

Although it is true that globalisation weakens the contemporary
nation-state in certain respects, this needs to be nuanced in order to
properly grasp the effects of globalisation on the nation state as well as
the challenges facing communist and socialist forces internationally.

One of the main arguments of what we referred to above as vulgar Marxism
as well as neo-liberalism is that there is very little that the contemporary
nation state can do on its own to forge a progressive development agenda
other than to re-orient itself to the imperatives of globalisation. Our
starting point is that the nation-state still remains an important site and
instrument for waging an anti-imperialist struggle as well as to forge
international solidarity of progressive forces. Even more important the
nation-state still remains an important site for the mass mobilisation of
the people to struggle for a just world order.

What does this mean? It is incorrect to simply say globalisation weakens
nation-states, partially true as this might be, without at the same time
recognising that the states of developed countries are weakened, if at all,
differently than developing countries. Globalisation in fact is in many ways
strengthening the US nation-state as a global super-power, particularly in
the military and political spheres. Indeed the end of the Cold War and the
growth of other regional economic centres like the EU and South East Asia do
pose a threat to US economic dominance globally. Despite this there is no
way in which the US nation-state can be said to be weakened by globalisation
in the same way as the Mozambican state. This is one dimension of our thesis
that globalisation simultaneously weakens and strengthens the contemporary
nation-state.

The other dimension of this thesis is more of an internal dynamic. Whilst
on the whole, globalisation does weaken the nation-state, particularly in
developing countries, we must at the same time not overlook the fact that
certain aspects of the nation state need to be strengthened in order to
drive a neo-liberal programme. Much as globalisation does weaken the
nation-state - in particular the post-colonial state in developing countries
– we must not lose sight of the actual reasons for this weakening nor the
fact that certain functions of the state are actually strengthened by
globalisation.

Globalisation weakens in the main the developmental role of the state in
economic development, whilst strengthening its regulatory, and in many
cases, repressive functions in order to drive a neo-liberal programme.
Precisely because neo-liberal measures almost always lead to popular
resistance, it is necessary for the repressive apparatuses of the state to
be strengthened in order to deal with such resistance. In many cases
therefore the weakening of the state is not only due to the pressures of
globalisation from above, but also due to the pressures from below as a neo-liberalising
state loses its mass appeal.

The myth and reality of "good governance"

Whilst the state is being rolled back in driving economic programmes
beneficial to the mass of the people, its regulatory capacity to oversee
this process tends to be strengthened, and this is normally referred to as
"good governance". This "good governance" essentially
means developing and rigorously monitoring rules and regulations aimed at
ensuring that private capital and capitalist accumulation processes
flourish.

However, "good governance" in the language of the World Bank,
etc., does also frequently refer to a wider range of institutional
arrangements – multi-party democracy, free and fair elections, ending
arbitrary administrative rule, dealing effectively with corruption, etc.
This wider scope of good governance is partly the result of pressure in the
North from progressive and liberal NGOs and human rights groups, and partly
because transnational corporations believe that their own unfettered
operations can be best be secured with such institutional arrangements in
place – after all, if the economy has been privatized, and key decisions
are made by the IMF and World Bank, multi-party democracy can be reduced to
little more than intra-elite (often inter-ethnic intra elite) rivalries.

But, whatever the agendas, and we need to analyse these and be vigilant
about them, at least the lip-service paid to "good governance" can
also be used for progressive purposes – in Zimbabwe or Swaziland for
instance. It is critical that working class and progressive forces
hegemonise and give concrete and programmatic content to the concept of
"good governance".

2.4 Engaging private capital – necessary as it is – is neither
the starting point nor does it inevitably translate into privatisation

The reality of capitalist globalisation is the dominance of private
capital in the form of transnational corporations that dominate almost the
entire globe. No serious revolutionary can afford to ignore this reality, or
fail to adequately strategise on how to deal with it. But there are a number
of myths and problematic notions that are being peddled as a result of this
reality, which are seriously flawed.

If there is one persistent criticism of our Party, both from inside and
outside our movement, it is that we have not adequately answered the
question of how to engage private capital in the contemporary period. Our
starting point as revolutionaries cannot be how to engage private capital.
Rather the starting point – as the SACP has consistently argued – is
what kind of a state do we need to build. We have said we are struggling to
build a developmental state, with a coherent industrial policy, that should
play a leading role in driving a reconstruction and development agenda,
including decisive intervention and leadership in economic development. It
is only from this perspective that we can then ask the question of how do we
engage private capital, as a component of the overall task of building a
developmental, national democratic state. This approach is fundamentally
different to that which starts by asking how do we engage private capital
and only then to define the role of the democratic state in relation to
dealing with private capital. The latter approach effectively subjects the
logic of the developmental state to that of the imperatives and logic of
private capital. The former approach seeks to subject the logic of private
capital to meeting the objectives of a national democratic state. To start
by asking the question of how do we engage private capital inevitably leads
to one answer – that of privatisation and of seeking to develop the state
in a manner that does not upset the market.

However the most important argument in this thesis is that engaging
private capital does not equal privatisation. There are a number of options
available in engaging private capital, and privatisation is only one of
many. What we have perhaps not fully explored as the Alliance are the other
options of engaging private capital, within the framework of building a
developmental state. It is in this area that we have a lot to learn from the
Cuban and Chinese experiences. Whilst these economic models may indeed
involve privatisation, but the general thrust of Cuban and Chinese models is
that of public-private partnerships which are driven by the state and do not
involve the alienation of public property from the control of the state. For
instance in many instances in China and Cuba 100% owned state enterprises
enter into partnerships with the private sector, without diluting the
ownership of the state component in such partnerships. And much more
importantly, such partnerships are driven within a clear framework of
strengthening the role of the state in economic development. There is a vast
difference between this path and that of selling off state assets.
Privatisation is in essence disengagement and not engagement with private
capital, and in many instances the retreat of the state from those areas
that are in private hands.

2.5 The challenge in the African continent

The challenges facing progressive forces on the continent are
multi-faceted and enormous. The one question that we have to answer is
whether thereare any significant left forces in the continent with which we
can forge alliances with as South Africa’s working class? The collapse of
the Soviet Union and the pressure of globalisation and imperialist-sponsored
counter-revolutionary movements in the continent and the region seem to have
led to a retreat by most left forces from a commitment to thoroughgoing
national democratic revolutions and socialism. Instead, many of these
movements seem to be retreating to narrow and chauvinistic African
nationalism, becoming bureaucratised and more suspicious of the working
class movements. Are we therefore not running the danger of being isolated
as left socialist forces in the region and continent?

A related question is that of our form of engagement with the President’s
initiative of the Millennium African Recovery Programme within the context
of an African Renaissance? What is to be the main content of this programme
as well as the African Renaissance itself? Is an African Renaissance
possible without waging an anti-imperialist struggle on the continent? What
form should such an anti-imperialist struggle take, and who are our
potential allies, and who are our enemies? While MAP appears to be a
fundamentally progressive programme (our formations have yet to actually see
even a draft), its drafting and formulation has, in contrast to, for
instance, the Freedom Charter or the RDP, been driven at a diplomatic and
inter-governmental level. If it is to be progressive not just in form, but
in reality, it needs to become the active property of mass movements within
our country and continent.

2.6 Lessons from existing socialist countries eg. Cuba, China and
Vietnam

The SACP has very strong bilateral relations with the communist parties
in Cuba and China. We have exchanged delegations, information and visits
with these parties over the last ten years, and we consequently developed
very extensive relations. However as the SACP we have not systematically and
collectively studied the new experiences and experiments undertaken by these
countries in the post Cold War era. For example, China has over the last 20
years experienced massive economic boom and development, almost unparalleled
in any socialist country in the recent past. Have the Chinese found the
right way of engaging the global realities in a manner that will strengthen
socialism in that country or is there a danger of a self-imposed return to
capitalism? The survival of Cuba and in fact the turning around of its
economy –which was more than 80% dependent on the Soviet Union, and in the
face of the vicious blockade by the US – is a very important issue to
study closely. Most impressive is the manner in which the Cuban revolution
is genuinely rooted in the mass of the people of Cuba. Can we learn anything
out of this? Failure to systematically reflect on these experiences in
particular have in some instances led to the crudification of what is going
on there. But it is important for us to state it categorically that it is
wrong to expect any one country to develop socialism in the same way as the
next country has done. This should perhaps be the lesson from Eastern
European and Soviet socialism, which tended to prescribe broadly similar
routes for a number of very different countries. In short, what lessons can
we learn from these countries?

2.7 Current international socialist and anti-capitalist
struggles 

The end of the 1990s were very different from the neo-liberal
triumphalist claims of the early 1990’s. More than 80 countries were
poorer at the end than at the beginning of the 1990s. There is clearly a
resurgence of anti-capitalist sentiment throughout the world, though not
rooted in and guided by organized working class power. The challenge is on
how to hegemonise organized working class and socialist organization over
these struggles. There are definitely new spaces opening up for taking
forward the socialist struggles in the world today.

2.8 Towards an international left platform and an alternative
development paradigm

The SACP, as part of its preparations for attending a variety of
international left forums and Congresses has attempted to develop a
framework for an international left platform. This has been relatively well
received in a number of communist and socialist quarters. However we need to
develop this and take forward this work as part of an attempt to revive
international socialist forces and a sustained challenge to capitalist
globalisation. What should therefore be the key elements of such a platform?

A key component of renewed left action should be the development and
popularisation of an alternative paradigm for development that would be
beneficial to the majority of the people of the world. Some of our comrades
in our movement have forcefully posed this question as to what
"intermediate" stage do we foresee between the current situation
and socialism. Related to this is the question of what kind of a progressive
paradigm do we need to struggle for? In other words what are the immediate
issues around which socialists should be mobilising and organising to
address the immediate problems of poverty and inequality and as part of a
process of rebuilding an international communist and workers’ movement?
Much more importantly we now have to rebuild international solidarity in a
situation where there is no longer a "centre" – the Soviet
Union. The absence of centre might as well be the most ideal situation to
build international solidarity under new conditions that takes into account
the different national and regional conditions in various parts of the
globe.

Much more importantly our current struggles continue to inspire millions
of people and organizations around the world. There are expectations from
left and socialist forces that our two formations need to play a leading
role in refashioning a left international agenda. We will need to engage
with this reality and develop appropriate forms of discussions and
engagement in this regard.

2.5 The Tripartite Alliance and its approach to capitalist
globalisation

The issue of globalisation has been on the agenda of the Alliance for the
past ten years, and even more so since the democratic breakthrough of 1994.
As an Alliance we have come a long way in our attempt to seek a common
understanding of the nature of the post-Cold War global conjuncture as well
as its implications for South Africa. However there a number of outstanding
issues that our two formations need to explore as well as the Alliance as a
whole.

Our argument as the SACP is that globalisation – precisely because it
is imperialism – is a thoroughly contradictory reality. The idea that you
can simply mimic what the big guys do, and jump on board to be guaranteed of
endless growth and development is deeply flawed. Profit driven globalisation
creates the technical possibilities for global solidarity, but it also
actively deepens inequality and chronic poverty. The task that we have in
this regard is to explore spaces for forging a sovereign developmental
agenda. The question is whether we are seeing the same amount of
possibilities or space to do this, or do we feel that we have much narrower
options. This is an implicit debate in the Alliance that we need to surface
much more sharply. In a way our debates and disagreements around
macro-economic policy, and industrial strategy, tariff reductions and our
approach to the restructuring of state assets, are all about what we think
the terms of engaging the global realities are.

Another related and fundamental question that needs to be placed firmly
in the Alliance discussions is whether there is harmony between, on the one
hand, our socio-economic commitments and, on the other hand, the kind of
economic policies we are pursuing particularly in relation to the global
realities facing us. Or conversely is it realistic to pursue the kinds of
socio-economic objectives in the light of the current global realities? In
order to do this we need to undertake a systematic exposition of the
assumptions underlying a number of policy decisions and positions taken by
each of the Alliance partners and government about the challenges of
globalisation today.

TASKS WE SHOULD UNDERTAKE

We have spent some time on two key realities – the weak and uneven, but
class-loaded accumulation trajectory that appears to be under-way in
post-apartheid South Africa; and confusion and misunderstanding around the
key features of the present international conjuncture. As the leading
socialist formations in South Africa we have a number of key
responsibilities that flow from this analysis.

In regard to the present skewed accumulation process we
need, amongst other things, to

• Defend and extend a democratic public sector capable of providing
  strategic leadership to economic and social growth and development. We
  need to move the intra-alliance debate away from where it is currently
  centred ("restructuring"). It was possibly a tactical error to
  have convened the last alliance meeting on the topic of
  "restructuring", rather than to have looked at building an
  effective public sector. And it is also possibly a tactical error to
  refer to these entities as "state-owned", rather than
  "publicly-owned". We need to build more public hegemony for
  our position, presenting much of the "restructuring" for what
  it is – a capitalist accumulation strategy, involving the predatory
  appropriation of public resources by an emerging elite, working
  hand-in-glove with established local and international big capital.
• The need to strengthen the will and capacity of our liberation
  movement to deal much more decisively with corruption, and the abuse of
  office for the accumulation of personal wealth. Of course we reject the
  notion that the new elite is more corrupt than (or even as remotely
  corrupt as) the apartheid ruling elite. Equally, we reject the idea that
  public sector managers are inherently more corrupt than those in the
  private sector. However, there are extremely worrying indications that
  some sections of our own movement are involved in unethical behaviour,
  and in the abuse of public office to accumulate personal wealth. As
  socialist organizations we should understand these phenomena not just in
  subjective terms, but as being linked to a process of class formation
  and primitive accumulation at the expense of public resources, often in
  a comprador relationship with transnational capital and/or national big
  capital. We cannot be calling for "good governance" in Africa,
  and not be setting the pace ourselves at home, and within our own
  movement. Nor can we allow conservative and liberal forces to be leading
  the anti-corruption campaign here in SA. COSATU and the SACP should be
  in the forefront in calling for much tighter regulations regarding
  potential conflicts of interest for those in public office, and for much
  tighter regulations governing those leaving public office and then
  setting up in the private sector. We need to see this not just as a
  question of morality, but as an integral part of our class struggle for
  a more democratic society.
• Closely linked to the above point, the vision of a more egalitarian
  society has tended to be downplayed in the last several years, yet our
  society remains one of the most unequal in the world. We don’t want to
  de-racialise inequality, we want to abolish gross levels of inquality.
  We need as the SACP and COSATU to advance this vision, and to rally the
  widest range of forces behind the commitment to a non-racial, non-sexist
  and MORE EGALITARIAN SOCIETY, beginning with the ANC itself. We should
  never underrate the extremely negative impact on our mass constituency
  of flamboyant and extravagant life-styles (that ape the consumerism of
  our former oppressors). We are not talking about a grey and
  narrow-minded egalitarianism, but there are limits, and our two
  formations should increasingly take a lead on this matter, for the sake
  of the revolution itself.

In terms of the general theses we sketched out on understanding the current
international conjuncture, the following are among the concrete
challenges that we believe confront our two formations:

• MAP is potentially an important and progressive initiative. We
  need to welcome the way in which our government has now begun to
  position itself vis-à-vis the anti-globalisation social movements
  (seeing in them important potential allies, rather than opponents). More
  importantly we need to welcome the commitment to making MAP a popularly
  owned programme within our continent – but then we need (with the ANC)
  to play an active role in ensuring that this actually becomes the case.
  If MAP is, indeed, to become a popularly owned perspective, then it will
  also have to be subjected to popular debate, discussion, and critical
  elaboration. In this regard, among the issues we should develop, as
  working class and socialist formations, are:

• a consistent critique of imperialism, while engaging with the major
  global powers, as we must, we must guard against illusions of
  impending major flows of Marshall Aid and the like. Efforts to change
  the rules of the international "game" must not be allowed to
  slide into opportunism or illusion, they need to become demands
  capable of rallying popular forces in the South and North, demands
  that highlight the systemic character of imperialism, and that expose
  and isolate predatory transnationals;
• the African "good governance" side of the deal must be
  seen as an opportunity to deepen national sovereignty and build
  popular democracy, by deepening the organic links between government
  and the major popular social forces in our societies. Progressive
  forces on the continent need to take the lead in defining and giving
  content to "good governance", we cannot allow neo-liberal
  forces to define good governance for us. This means, amongst other
  things, that we must take a lead in the struggle against the
  plundering of public resources (see the points made above).

• Deepening national sovereignty, while we cannot seal ourselves
  off from the world in which we find ourselves, we can take steps to at
  least partially insulate ourselves from the roller-coaster of the global
  economy. Among such steps are:

• a strong developmental public sector (see above)
• a more strategic and coherent industrial policy
• constantly fostering the unity between our government and its mass
  base.

• Building a people’s economy: Captured in the above perhaps are three
  interrelated tasks in deepening the NDR and asserting working class
  hegemony in the process. These tasks are deepening democracy through
  building popular power; accelerating the transformation of the state as
  a developmental state and struggling to build a people’s economy. A
  people’s economy seeks in the first instance to challenge the logic of
  the capitalist market whilst simultaneously building elements and a
  momentum towards socialism. A people’s economy places the eradication
  of poverty at the centre of economic restructuring, coupled with a
  deliberate strategy to defend and strengthen the public sector. Key
  components of this people’s economy are an integrated industrial
  policy driven through sectoral summits, a strong public sector, an
  active labour market, a growing co-operative sector, and a social
  security system.
• Perhaps the overall key challenge is a much more systematic
  harmonisation of our programmes and campaigns on jobs, transforming and
  diversifying the financial sector, defending and strengthening the
  public sector under the banner of building a people’s economy. At the
  centre of this should be a conscious effort in mobilising the working
  class on a sustained basis in order to shift the contours of economic
  debate and economic restructuring. 

ARTICLE 2

Restructuring of state assets - SACP input to alliance
10-aside held on July 16.

Time for a broad strategic re-assessment

We have learned many important lessons from the concrete, practical
restructuring of publicly-owned assets over the last seven years in South
Africa. Internationally, in the last few years, there has also been an emerging
and generally more nuanced view of restructuring, coming out of concrete
experiences, many of them negative experiences – eg. electricity in
California, rail and water in the UK, rail in Argentina, not to mention the
woeful experience of mafia-style privatisation in Russia.

The SACP is not arguing that restructuring should not happen, nor that there
is no role for the private sector. However, we need to take stock of what has
happened, and where we are now headed. Our assessment is that there is a
tendency in government to conflate engaging and mobilising private capital
(which we must certainly do) simply with privatisation.

At the most general, strategic level, the alliance partners often appear to
be in agreement. However, at the heart of many problems within the alliance is a
tendency to fudge real differences, or to present different and perhaps
contradictory objectives as if they were converging and mutually reinforcing
goals.

What are the most general points of real (or apparent) agreement?

The SACP (and, we think, our partners) agree that the restructuring of
publicly-owned assets needs to be located within the following over-arching
strategic objectives:

• Achieving the broad growth and developmental goals of the RDP, especially
  job creation;

• Building a national democratic state – an active, developmental state
  with effective strategic capacity within the economy;

• Enhancing national sovereignty at the economic level and policy level in
  general.

The SACP also strongly endorses the broad economic strategic shift of focus
announced in President Mbeki’s February 2001 State of the Nation
address to the opening of parliament. The key features of this are:

• A shift of focus from the macro-economic to the micro-economic (or
  "real" economy) – without, of course, thereby, neglecting the
  importance of the macro.

• A major focus on infrastructural development – embracing both economic
  and social infrastructure;

• A related, targeted, focus on urban renewal and integrated rural
  development;

• Lowering input costs within the economy without attacking workers’
  wages.

Again, the restructuring of publicly-owned assets needs to be driven by and
assessed in terms of enhancing our capacity to carry through these strategic
objectives.

The Party also strongly endorses the processes envisaged in the National
Framework Agreement of 1996, re-affirmed by the Department of Public
Enterprises last year. Key features of the NFA are:

• Within the general framework of the above, restructuring needs to be
  grounded on a case by case basis, avoiding ideological dogma (of one or
  another variety), and avoiding simplistic one-size fits all, managerialist-inspired
  "turn-around" formulae;

• Restructuring needs to be negotiated strategically between the two key
  partners in publicly-owned entities – government and unions. But care
  needs to be taken that the needs of users, especially those historically
  marginalized – black households, rural communities, commuters, etc. are
  adequately represented;

• While reconstruction and development are the key objectives, the related
  objectives of job creation and retention must be central to any
  restructuring process.

Generally, there is no disagreement amongst us on most, if not all, of these
points. So why do we find ourselves disagreeing sharply so often on the
restructuring process? There are several key issues that we want to underline.

Problem number one - Fudging strategic differences

RDP objectives, for instance, are sometimes made so general and elastic that
they mean everything and nothing. We believe that this kind of tendency is
exemplified in the introductory sections of the DPE document "Restructuring
State Owned Assets – Policy Framework". There is a serious fudging of
different paradigms, and a tendency to present what has happened over the past
six years, and what is now required, as all part of a seamless and uncontested
continuity. This is nowhere more apparent than on pages 20-21 of the document
where the key objectives of various policy documents (the RDP 1994, GEAR 1996,
the NFA 1996, and the IMCC Lekgotla 1999) are tabulated. The conclusion that the
document draws from this tabulation is that "the table shows a remarkable
consistency among the main objectives of restructuring". In fact, even a
cursory glance at the document’s own table tells a very different story about
priorities

One or the other priority may be the correct one, and different priorities
might be more appropriate in the case of different state-owned entities. There
may be linkages between different priorities – for instance, we may
need to sell off some publicly-owned assets in order to "mobilise"
private sector capital, in order to have the resources to meet basic needs. But
these linkages need to be demonstrated concretely, case by case, and not simply
assumed.

Unless we spell out transparently and discuss, concretely and strategically,
the advantages and disadvantages of different priorities we will never be able
to have an honest and constructive assessment of policy.

Problem number two – an inferiority complex about public ownership.

For most of the 1980s and 1990s, a triumphalist neo-liberalism has sought to
denigrate publicly-owned entities (and, indeed, the state and parliamentary
democracy itself). Neo-liberalism has presented parastatals as inherently
bloated, tax-guzzling, inefficient and uncompetitive "corporations".
The fact that we inherited an often bloated, inefficient, unsustainable and
people-unfriendly apartheid public and parastatal sector has sometimes lent an
unjustified aura of validity to the neo-liberal dogma in our own situation. That
we need to restructure our public and parastatal sectors is obvious, that this
restructuring has to be neo-liberal privatisation is less obvious. But the
conflation of the two things is often made, and, of course, deliberately
fostered by certain forces. We need to rebuild confidence in a democratic,
and effective public and parastatal sector. The argument for publicly-owned
entities includes the following dimensions:

Developmental priorities – this is, probably, the most obvious and
increasingly accepted argument. Clearly, privately-owned, profit-maximising
corporations are not going to invest major resources in overcoming the huge
structural inequities in our society – delivering educational, health,
electricity, telecommunications and transport infrastructure and services to the
marginalized. There are at least partial agreements between alliance partners on
this, and the Telkom fixed line monopoly for some more years, for instance, has
been argued from this perspective. But there are some important caveats that
must be borne in mind.

Often our agreement is only about the "rolling out of
infrastructure", and the need for some degree of public ownership to assure
this. Does the need for public ownership end once infrastructure is rolled out?
Will effective and affordable provision of services to the poor and marginalized
be maintained once the infrastructure is rolled out without ongoing public
ownership?

Strategic economic priorities, including the defence of a relative
national economic sovereignty – we must be careful not just to confine the
importance of public-ownership to social "basket" cases where there is
so-called "market failure". In a number of key areas, critical
economic strategic priorities will not be realised without public-ownership. The
short-termism of private capital, and its foot-lose cosmopolitanism mean that
key strategic economic (and not just social) national/regional objectives may be
ignored or frustrated by private capital, or its undue influence. Recent
examples, positive and negative, of these points can be found in:

• The key, positive role of the IDT in ensuring private sector investment
  in Mozal, critical for the overall Maputo-corridor SDI. Without public
  ownership of IDT, and without the IDT making the strategic commitment to a
  20% share in Mozal, the development would not have happened at all.

• By contrast, the strategic decision as to whether to develop a major
  international airport in KZN (the King Shaka Airport project) has been
  complicated by the 20% share that Aeroporti di Roma now has in ACSA. Any
  strategic decision on a matter that is, surely, linked to national
  sovereignty and long term strategic concerns, will have to be negotiated
  with AdR. It should be said that the value of the AdR partnership to our
  country is also, in other ways, far from apparent, as is government’s
  current commitment to proceeding further with the privatisation of ACSA.
  (see more below);

Weak corporate governance – the failure of boards and senior
management to take seriously their public mandate. As many aspects of the
SAA debacle remind us, a majority public ownership on its own is not sufficient
to ensure the realisation of national economic strategic priorities. It is
critical that the senior management of publicly-owned entities has a clear sense
of public responsibilities and national strategic priorities, and that they
grasp the qualitative difference and advantages of publicly-owned entities.
The tendency for some senior public sector managers to see themselves as
under-graduate capitalists, rather than public sector managers with their own
mandate and long-term commitments is part of a major problem. For instance:

• it is very hard to understand, from a national economic strategic
  perspective, how the board of the SAA could have approved the
  purchase of a new fleet of narrow bodied Boeing 737-800s that, unlike the
  competing Airbuses that we have sold off, are not very versatile, have to be
  belly-loaded, and cannot handle air pallets/containers with all of the
  problems and dangers associated with the consequent double handling to
  repack cargoes – costs, damages, pilferage. This is a choice that will
  make our national carrier increasingly uncompetitive. (The very opposite of
  the President’s commitment to lowering input costs throughout the economy
  to ensure greater global competitiveness). This choice, into which we are
  now locked, needs to be contextualised within the broader pressures upon us
  to move towards an "open skies" dispensation. We are likely to
  find our national carrier increasingly marginalized in terms of freight
  transport, our capacity to prioritise our own exports might be compromised,
  and generally our national economic sovereignty could well be impaired.

Other cases of poor corporate governance include:

• Telkom, where the shareholders agreement appears to favour the
  minority shareholder over the government majority, and this has allowed
  decisions that do not make sense from a public and worker perspective,
  including mass retrenchments, increased tariffs, and little in the way of
  improved services.

• Post Office - This is another case where the presence of a
  minority private sector equity partner has compromised the company. The
  New Zealand SEP has been stripping out cash and leaving the company worse
  off than before. There is little evidence of any improvement since the SEP
  was announced. Government has intervened to terminate the contract. The
  question is whether it should ever have been granted at all.

Problem number three – assuming that privatisation is the only way to
mobilise private sector (including foreign) investment

A common argument advanced for privatisation (including complete sales,
concessioning out, IPOs, and PPPs) is that this is a means to mobilise private
sector investment (including foreign investment) for RDP goals, like
infrastructure development and service provision. This argument is not
necessarily wrong. Where it is wrong is when it assumes that this is the only
possible way to mobilise capital resources for extension and maintenance of
infrastructure and service provision. The privatisation route must always be
weighed against the advantages and disadvantages of other possibilities for
raising investments including:

Public borrowing – governments are able to access major relatively
low interest loans on foreign capital markets, especially for infrastructural
projects. While this will increase the public debt, it may well prove to be
financially more prudent in the medium and longer term. International examples
abound of privatisation projects designed to relieve governments of financial
burdens that have back-fired. The example of Argentinian rail is a good current
example. The freight rail system was concessioned off into six regional,
privately-run entitities. State subsidies to freight rail have increased
17,7% since this concessioning (not to mention major job losses and a serious
decline in services).

Publicly owned entities are able, in principle, to steer more surplus into
re-capitalisation – Here a good example is ACSA. In 1998, Aeroporti di Roma
paid a once-off R819-million for its 20% share-holding. In 2000 ACSA made a R292
million profit – which suggests that every two and a half years ACSA could
make as much, but over and over, as Aeroporti di Roma paid once-off. Are there
compelling reasons to continue to sell-off more and more of ACSA, as we are
currently planning to do?

In April this year, ACSA, with 80% still publicly owned, announced a
restructuring and investment strategy which will see the enterprise pump R2,7
billion into airport operations over the next five years. This is very much in
line with President Mbeki’s vision of major infrastructural investment,
contributing through improved transport efficiencies to the overall lowering of
input costs throughout our economy. As Business Map has noted : "A fully
privatised company would probably pay out a much higher proportion of profit as
dividends to investors". Again, we need to ask, are there compelling
reasons to moving inexorably to selling off more and more of ACSA?

(We should note, by the way, that privatised airports are not the
international norm. In the United States, for instance, all of the major
airports are publicly owned, typically by cities. They provide an important
revenue stream for cities, and they enhance the capacity of a municipality, or
perhaps potentially in our case of a provincial government to plan, to set
strategic agendas, and to invest in infrastructure, rather than paying out
dividends to fickle investors.)

Problem number four – the assumption that government should "steer
but not row"

A common argument for privatisation is that government should best occupy its
time and resources with setting strategic objectives, leaving management and
ownership to the private sector. This might, in many cases, be the most feasible
option, not least in a national and global economy that is dominated by
capitalism. However, we need to be careful about the apparent seductiveness of
the "steer but don’t row" argument. There are at least three reasons
for caution:

Public management and public ownership can sometimes be absolutely
critical for strategic steering itself - we have already noted examples (eg.
Aeroport di Roma and the King Shaka airport project) where privatisation/partial
privatisation might impair one’s capacity to steer strategically.

Attempting to regulate the private sector might prove to be more
complicated than actually owning and managing an entity – Numerous
international examples of municipal level PPPs, concessions, and other
restructuring projects, including our own experience with Dolphin Coast (water
tariffs going up a projected 15%), and Umgeni Water, raise questions about the
complexity of regulating private entities, and of ensuring that they do indeed
deliver efficiently and that they do effectively carry risk (the ostensible
reason for being "rewarded" with profits). All too often private
entities nominally carry risk, until there are losses, then they expect to be
baled out with public subsidies.

It is true that we often lack capacity and resources in the public sector and
in parastatals, but it might, in the medium-term, prove to be more reliable
building such capacity and resources. The task of regulating major
transnationals, especially if you are a municipality, might be more daunting,
than improving your own public service capacity.

Means and not just outcomes are sometimes critical – one of the key
policy decisions of our democratic government has been to prevent, private
"international peace-keeping forces" operating from our country. We
have correctly recognised that these entities are little more than mercenary
forces, and, regardless of whether their services are sought by relatively
progressive governments elsewhere in our continent, or in the third world, we
cannot allow private armies to fulfil a strategic function. In cases like this,
"efficiency", "outcomes", etc. are not the only criteria -
means do matter. International peace-keeping must be the function of a
constitutionally established public entity like the SANDF.

The same, surely, applies in a range of other areas? We would, we believe,
agree that most education in our society needs to be provided publicly. Clearly,
most of us would agree that the burgeoning of private security firms is a
problem, and that our medium and longer-term objective must be the building and
extension of the capacity of the SAPS and its associated arms.

Is the running of prisons a function that should be increasingly handed over
to profit-seeking, private firms? And the paying out of pensions?

In short, and related to the points made in 4 above, we need to defend the values
of a public sector that embodies the ideal of public service, defined by the
needs of the service user, not his or her market power. A sector that gives
meaning to "community", to institutions (schools, hospitals, an army,
trains) that we can describe as "ours" in a way that we would never
refer to Pick n Pay, or Sentry Armed Response, or BP as "ours".

Problem number five – the need to develop a more differentiated
appreciation of different modes of private participation

From all sides of the political and economic policy spectrum there are
tendencies to collapse the restructuring challenge into a simplistic
public-ownership versus privatisation. Of course, there are different kinds of
restructuring to access private participation, ranging from full privatisation,
through strategic partnerships, to concessioning, to PPPs. There are a great
deal of variants within each of these as well. It is important to assess the
strategic strengths and potential dangers in each of the options.

Bearing in mind the points made generally under 6.3 above (that
regulating/steering private capital is never an easy exercise), different
variants of privatisation are more disposed to public strategic steering than
others. This is something that must always be factored into any assessment of
restructuring. Some examples:

• Privatising through a stock market offering (eg. the proposed Telkom IPO)
  is a route that is least likely to secure some strategic hold over an
  entity. Securing private sector partners (as with the initial Telkom
  restructuring, as with ACSA), or borrowing from banks, at least gives one
  identifiable interlocutors whom one can seek to persuade of medium and
  longer-term perspectives. Negotiating with the stock exchange is an
  improbable venture. The more a public entity is exposed to the stock market,
  the more it is exposed to short-term profit-maximising, with all the
  attendant dangers of asset-stripping, cherry-picking, etc.

• It is often tempting to concession out fragments of a parastatal –
  private investors are likely to be interested in specific raillines (example
  the high density Coallink or Orex lines and not the whole of Spoornet). Or
  one might concession out different operations to different private sector
  operators in the name of specialisation (eg. as in the UK rail case –
  track maintenance to Railtrack, passenger services to a range of different
  operators, etc). The dangers are that the rest of the network collapses
  (with knock-on effects perhaps even for the cherry-picked lines that looked
  profitable, but where the importance of feeder lines was neglected), or that
  coherence across the network (as in the UK) is completely lost, with
  seriously declining service and safety standards.

Problem number six – the place of black economic empowerment in the
restructuring process

BEE is an important strategic objective of the ANC-led liberation movement.
Restructuring of publicly-owned assets in SA needs to be, in part, about the BEE
process, most obviously in the very broadest sense of BEE – namely, the
provision of basic economic empowerment to millions and millions of black South
Africans through access to jobs, and through the provision of affordable and
reliable electricity, housing, transport, telecommunications, etc. But
restructuring also presents opportunities to advance BEE in the narrower senses
of the term – namely, through the increasing promotion of black managers into
senior positions within parastatals; and through the opening up of business
opportunities to emerging black entrepreneurs – from the SMME level to an
emerging black-controlled large corporate sector.

While there is no necessary contradiction between the pursuit of BEE in both
the widest and narrower senses of the term (senior black public sector managers
in Metrorail will probably have a greater appreciation of the needs of
commuters), we cannot simply assume that this will always be the case. Promoting
business opportunities for emerging black private businesses might, in some
concrete cases, frustrate the realisation of wider economic empowerment. This
dilemma is not always adequately surfaced in our policy debates and assessments.
Two examples:

We are not clear about the exact character and composition of the new iGas
entity. But nor are we aware of any alliance policy discussion of the reasons
for pushing aside Petronet, the existing Transnet gas and liquid fuel division,
in favour of an entirely new entity, which will be set up with public funds and
public borrowing. It is said that iGas is an attempt, through public resources,
to create new business opportunities for black entrepreneurs. This may, or may
not, be the case. This may be the correct strategic choice – but is there any
assessment of how iGas fits into a long term economic vision of energy security
and affordability for the South African economy?

Has there ever been effective, alliance-wide discussion on the relative
merits of spending between R2,3 billion and R8 billion on taxi recapitalisation?
Could similar sums not be better spent on municipal-owned bus and light-rail
systems? Obviously, the mini-bus industry represents a major reality in our
country, and obviously there is a great deal of historical inequity in the fact
that white-owned bus companies were subsidised and township taxi owners were
not. However, a thorough strategic review is required.

Problem number seven – putting anticipated privatisation proceeds into
the budget

As noted above, the SACP strongly endorses the strategic shift announced in
the President’s state of nation address at the beginning of this year.
Critically, it announces a major emphasis on infrastructural investment, which
is linked, in turn, to urban renewal and integrated rural development
priorities. However, a key source of capital resources for this major investment
drive (R7,8 billion over three years) appears to be from privatisation proceeds
– R18 billion is budgeted for in this financial year. What is potentially
contradictory in this approach is that the very instruments for major
infrastructural investment in our country are the institutions that are
earmarked for some kind of privatisation process – Telkom, Eskom and Transnet.
Some R40 billion is anticipated from privatisation proceeds over the coming
three years. Is it possible to carry through this level of privatisation, and
still retain any strategic control over infrastructural investment – now
acknowledged as critical for growth and development?

By reversing an earlier government policy not to put anticipated
privatisation proceeds into the budget, we have exposed ourselves to other
serious problems. In particular, at a time when the global telecommunications
market is not in good shape, we are locked into a Telkom IPO for not later than
the end of this budget year (in fact sooner if the proceeds are to flow in on
time). We have also announced to the market roughly what we expect to realise
from this IPO, further limiting potential proceeds.

Problem number eight – flawed processes

Although, in the NFA, we have a remarkably progressive national
agreement on the kinds of processes required to ensure effective and strategic
restructuring, in practice, the NFA is not working well. The NFA continues to be
dysfunctional with labour in particular dissatisfied with the lack of commitment
shown to the NFA by managers of public enterprises in particular. Government
seems unwilling in most cases to direct these managers and ensure that the NFA
is adhered to.

Sometimes the NFA purview is too general, and the real problems occur in the
detail of restructuring. At other times, negotiations are formal and not
substantial, with decisions already taken by government (including, now, the R18
billion that has to be realised this year, regardless). The SACP is, obviously
and correctly, not a direct participant in NFA negotiations, and we do not want
to raise detailed points at this forum. However, there are some general
observations around flawed processes, including:

There is an over-reliance on external consultants/international
"turnaround" specialists/strategic partners. We need to carefully
review and learn from many experiences – including the NZ Post Office episode,
and the Coleman Andrews case. Obviously we should not shut ourselves off from
international expertise. But we need to be very careful that we are not swept
off our feet in the process by agendas that have very little to do with what we
are seeking to achieve. In particular:

• we must guard against the assumption that there is some single, generic,
  "corporate turn-around" strategy package. Too often entities like
  the Post Office or SAA are approached as if they were simply corporations,
  and not strategic entities facing specific communication or transport
  challenges;

• what is worse, sometimes the external consultants are merchant banks with
  a major vested interest in rapid and extensive privatisation of South
  African assets. For example, Rothschilds have been brought in by government
  to advise on the restructuring of Spoornet. The terms of Rothschilds
  contract are not known, but it can be assumed that formally, or informally,
  Rothchilds would benefit as advisers to potential foreign buyers.

Above all, the alliance leadership has not been meeting to effectively
provide overall strategic leadership to the NFA and restructuring. In
particular, the continued absence of an elaborated industrial strategic
policy (despite our agreement on general matters – eg. the President’s
state of nation address) dogs everything else that we are trying to do, creating
uncertainty and confusion. The most recent contribution to the development of an
industrial policy from the DTI is, unfortunately, extremely limited. It focuses
merely on one element of an industrial strategy ("competitiveness"),
and even in this respect, it is limited. The call for the holding of industrial
sector strategy summits needs to be followed through, and the role (and
restructuring) of publicly owned entities must be related to the emerging
national growth and development strategic perspectives. Telkom, Eskom, Transnet,
etc, must be restructured within the logic of an evolving telecommunications,
energy and transport growth and development vision – for our country, and our
region.

Recommendations

The SACP recommends, amongst other things, the following:

• A comprehensive review of the restructuring of public enterprises to
  date. We propose the setting up of an alliance task team to produce a
  collective discussion document – similar to the very useful and successful
  alliance task team that produced the discussion document on a developmental
  state.

• Constant emphasis on the clear, centralised direction and control of the
  restructuring by the national government, including over local
  government-level restructuring.

• This should include ensuring that public sector corporate governance
  becomes a model of strategic competence, and plays a leading role in
  ensuring our growth and development objectives. We must also ensure that
  publicly-owned assets are used to broaden the public sphere, and role back
  the tyranny of the market. There must be full public disclosure of all
  decisions, contracts and information regarding the public sector. The public
  should be allowed access to all crucial meetings where decisions are taken
  with respect to tenders, etc.

• The logic of private capital clearly needs to be challenged. In the
  restructuring process the emphasis should be placed on extension of services
  to those who need them the most, to public control of enterprises and
  services that are essential to development. These are Water, Electricity,
  Transport, Health, Education, Post, and Telecommunications.

• The imperative of developing a much clearer industrial policy strategy,
  and the linking of such a policy to the restructuring of publicly-owned
  assets is crucial.

• Where private investment is needed, careful strategic evaluation of the
  best ways of leveraging this investment is required. PPPs with government
  controlling a minimum of 51% are, for instance, more likely to assure the
  realisation of strategic goals, than the sale of public resources on the
  stock exchange. Each case must be examined strategically, and in detail.

ARTICLE 3

The role of the state in capitalist industrialisation: a
short study of ESKOM

By David Masondo who is the National Cadreship Development
Officer of the SACP and a member of the National Executive Committee of the
African National Congress Youth League.

Introduction

The role of the state in capitalist development is contingent on the regime
of capital accumulation. The current ` restructuring`, a euphemism for
privatisation of state assets, cannot be understood and analysed outside the
changing nature of national and global capitalism which is increasingly based on
financial capital as a site of capital accumulation and the emerging black
bourgeoisie. Far from being isolated, the pre-1994 South African state was
linked to the global regime of accumulation. Changing patters of capitalist
accumulation are now putting different pressures on our new democratic
government. ESKOM will be used to illustrate this assertion. In the final
analysis it will be argued that the current state restructuring is based on a
neo-liberal conception of the state which is line with the interests of
financial capital.

It is often claimed, including from within our movement, that pre-1994 the
South African state’s industrial policy was essentially based on "import
substitution" – high tariff barriers to protect local manufacturing.
While these policies played a role, this argument ignores the critical role
played by parastatals like ESKOM in pre-1994 industrialisation.

It will be argued that the pre-1994 South African State used state assets in
particular ESKOM, which provided technical and social infrastructure for capital
accumulation in the manufacturing and mining industries. In other words, the
author will argue the state did not only use import-substitution
industrialisation through tariff protection to industrialise the South African
economy, but it also built parastatals such as ESKOM to assist capitalist in the
accumulation process. It will be shown that capital accumulation in South Africa
was not only based on cheap labour, but also that electricity which mechanised
the labour process and cheapened labour through provision of electricity for
household appliances which subsidised the wages of workers.

South Africa and the role of the state in industrialisation

The historical role of the apartheid South African state in the economy was
contingent on global capital accumulation models. In other words, the South
African state intervened in the economy in similar ways to interventions in
other parts of the world to resolve the capitalist crisis. The South African
regime of capital accumulation, which is sometimes referred to as `Racial
Fordism`, was transplanted to South Africa in the same way as the neo-liberal
model was transplanted to South Africa as part of the global capitalist economy.

The South African State and the Economy before 1994

In the early period of colonisation of South Africa, there was no intention
on the part of the colonial state to build industries. And under British
colonial domination there was also no intention to industrialise because Britain
was influenced by mercantilism. Early colonists were mainly interested in luxury
goods such as food, spices, salt, etc.

The development of mining in 1860s led to the establishment of related
industries such as manufacture of explosive, cement, energy (e.g. electricity),
etc. In other words, mining was a springboard for the industrialisation which
saw the rise of factories from 550 to 15 000 in the years 1890 to 1910.

Already in 1905 there was electricity provided by Victoria Falls Transvaal
Power Company Limited (VFTPC). It mainly provided the mines and mechanised
labour process. Owing to the post war economic boom which allowed blacks to look
for `decent` jobs and the liberal challenge to `slave` labour and the fact that
mines were becoming deeper, electricity was used to mechanise labour in order to
maintain the rate of profit (Christie, 1984). In other words, electrical
mechanisation was used to increase productivity. But electricity generation was
not adequate for further industrialisation of the South African economy.

The state played a key role in stimulating industrialisation not only through
tariff protection of the infant industry, but also through building state
parastatals such as ISCOR, ESKOM, and SASOL. The state not only protected local
industries through tariffs, but it also built the energy sector to assist
capital. ISCOR provided cheap steel to industries. Smuts’ government built
this. When the Pact government which was based on the white working class,
Afrikaner capital and white rural areas, took over in 1924, it consolidated this
work.

The South African state shaped industrial structure through industrial
policies that favoured mining and energy. The dominance of mining and energy was
not only an anchor of South African industrial development, but it also impeded
the diversification of other industries which produce capital goods as Fine and
Rustomjee (1996) argue.

The First World War made local industries necessary because foreign supplies
were cut off. Smuts, who was a member of the Imperial War Cabinet, saw a need to
establish a state-owned power generating station in order to further
industrialise. He acted on the British government research committee which
recommended that:

`In particular India and the self-governing dominions should take stock of
their facilities of generating electricity, whether from water, coal, oil, or
other sources of energy, and should appreciate their permanent and
ever-increasing importance to the Empire` (Christie, 1984)

On the basis of this recommendation Smuts argued that `if we want to be an
industrial country we must have cheap power`. Demand for electricity from
mining, municipalities and railway transport grew. British industrialists wanted
the electrification of railways so that they could transport their commodities
more cheaply.

In 1922 the Smuts government passed the Electricity Act which set up an
Electricity Control Board and an Electricity Supply Commission (ESKOM). The
former controlled and licensed the supply of electricity. The latter was
responsible for the generation and provision of electricity to the railways,
government, industries, and the general public. (Christie, 19 84).

When the Pact government came into power in 1924, the Smuts government had
already set-up adequate technical infrastructure. As Smuts put it "I
have done my best for the gold-mining industry" (Christie, 1984). In
1948 the National Party came into power and nationalised ESKOM which had boosted
industrialisation through electrification. The National Party was based on a
class alliance of the white working class and Afrikaner agricultural capital.
Due to the pressure of agricultural capital the Electricity Act was amended to
enable the state to subsidise ESKOM for rural development projects.

Other external social forces which were interested in the industrialisation
of South Africa such as the World Bank and the United States lent money to the
apartheid state to fund the operations of ESKOM (Christie, 1984).

It could be said that the introduction of the import substitution
industrialisation and the provision of cheap electricity by government led to
the establishment of manufacturing industries, which relied more on electricity.
British manufacturers began to produce electrical equipment in South Africa.
Roger Price, the son of one of the key figures in the Victoria Falls Power
Company, established an English Electric Company in the Reef. In 1958 the Benoni
plant of the English Electric Company was manufacturing all or parts of large
radio transmitters, mine-pumps, mine-winders, South African-designed radar sets,
communications equipment, industrial closed-circuit television, large electric
motors, etc. (Christie, 1984). Phillips South Africa began making bulbs in South
Africa in 1947 and in 1958 it was stressing the role of its electronic research
laboratory making in South Africa independent of overseas. Siemens (SA) Pty
Ltd., which was established in 1923 selling imported equipment, began to produce
goods locally between 1957 and 1961. Christie correctly attributes the
establishment of the locally based industries to short and low transport costs,
cheap steel, electricity and labour.

Electricity was not only used to increase the rate of profit in the
production sphere, but also in the reproduction sphere. Electricity was used to
cheapen the value of labour power. Electronic appliances which were influenced
by provision of cheap power, particularly to the white working class, improved
their quality of life and cheapen the reproduction of workforce. Furthermore, it
released servants and housewives to wage-labour outside the household. The black
working class and rural poor used mainly coal, wood and paraffin for energy.
This is not to deny the fact that the industrial working class based in urban
areas was often provided with some electricity in townships.

It could be said that South African economic growth was based on
quasi-Keynesian developmentalism tailored along racial lines, but based on Adam
Smith `s theoretical framework. The state played a key role in engineering this
developmentalism. Furthermore, this was also linked to the global regime of
accumulation. It could be said the South African state provided a technical and
social infrastructure through electricity for capital accumulation. It provided
electricity for production and the reproduction of labour power.

The South African state in the economy after 1994 – continuities and
discontinuities?

The international capitalist crisis which saw the rise of neo-liberalism did
not leave South Africa untouched. In the 1970s, the South African economy was
protected by the high price of gold. Due to the decline of mineral prices
internationally, mining became less important for capital. Capital began to
change its accumulation strategy. This led to the emergence of the Mineral
Energy Finance Complex in which the money capital and technology have become key
sites of capital accumulation. This is confirmed by the Standard Bank 1999
Report, which states that there has been a decline in the productive economy
due to the rise of financial markets.

This has led to tremendous changes in the nature of South African capitalism
and ESKOM.

In dealing with the global capitalist crisis, the National Party government
began to adopt neo-liberal economic policies which led to the adoption of the
privatisation of state assets programme in 1987. The privatisation programme
under apartheid could not succeed because the regime lacked the legitimacy to
push ahead in the face of opposition from progressive forces and because
international capital was not prepared to buy these assets.

The 1984 ESKOM Annual Report points out that ESKOM was experiencing a
financial crisis because of government fiscal austerity which cut the subsidy to
ESKOM. Furthermore ESKOM could not borrow money due to high interest rates
locally and internationally. As a way of dealing with the financial crisis,
government began to commercialise the parastatals.

In 1994 when the liberation movement came into power it committed itself to
the Reconstruction and Development Programme (RDP) which argued that the
democratic government should consider ‘increasing the public sector in
strategic areas through, for example nationalisation…’ But in
1995 the government released its first policy statement on the privatisation of
state assets entitled "A Discussion Paper on Restructuring of State
Assets" which advocated privatisation with different emphasis on
different state assets. To illustrate, state assets which were considered not to
be providing ‘essential services’ such as Autonet, Sun Air, Transkei
Airways, Aventura, were to be privatised outright. State assets such as Telkom,
Transnet and Eskom were to be partially privatised. In 1996 the government
introduced the "Growth, Employment and Redistribution Policy"
(GEAR) as an economic strategy for South Africa. Amongst other key strategic
policy choices was privatisation of state assets. This was elaborated in the
2000 "Accelerated Agenda towards the Restructuring of State Owned
Enterprises: Policy Framework".

The adoption of GEAR, which envisaged a minimal role for the state in the
economy was also a fundamental shift from the RDP which was based on Keynesian
developmentalism emphasising the developmental role of the state through
actively redistributing resources to the poor.

At the risk of stating the obvious, GEAR is based on the idea that the state
should play a minimal role in the economy on the assumption that when business
is allowed to make more profit, it will then distribute it to the poor. This
approach has been referred to as a trickle-down approach that sees
redistribution through economic growth. Put simply when markets are allowed to
operate without state intervention there will be economic growth and that growth
will also benefit poor people. So GEAR lays a conducive environment for the
market to play a key role in the economy. GEAR seeks to attract investment
through reliance on market forces, by the maintenance of fiscal austerity,
privatisation, and the opening up of the national economic through trade
liberalisation. This fits neatly with Adam Smith notion of the `invisible hand
of the market`, which is also linked to SACOB`s argument that the market
mechanism is `a remedy for poverty and will ensure economic growth’.

ESKOM generates, transmits and distributes electricity. Most of the
electricity is generated from burning coal in power stations. Electricity is
transmitted from power stations to power plants to centres where it is needed
such as towns and large business through wires which carry huge amounts of
electricity. Local authorities usually do the distribution of electricity in
South Africa.

The state is the main distributor, policy maker, regulator and owner of
ESKOM. The current White Paper on Energy proposes significant changes in
these areas. Government suggests different phases of ‘restructuring’ ESKOM.
In line with the GEAR logic that the private sector is more efficient than the
public sector, the government suggests that ESKOM should be privatised in so far
as generation and transmission are concerned. There is an intention to privatise
30% of ESKOM `s productive capacity. Furthermore, the distribution must be
separated into individual companies to introduce ‘competitive market
structure`. The transmission system will still be government owned, but
government will allow the entry of small companies to encourage competition.

Government has proposed a regionalisation of provision of electricity in the
sense that there will be Regional Electricity Distributors (REDs) which will
merge existing local small distributors. The REDs will not be part of ESKOM, but
will be owned by government in the `short-term`. It could be said that in the
long run it will be in private hands. Furthermore, the regionalisation of
distribution will perpetuate regional inequalities since it will make
cross-subsidisation impossible.

The apartheid government used electricity to build industries and provide it
to the whites. Under the guise of `medium-short` term ownership our government
now intends to privatise ESKOM as a way of introducing `competition, efficiency,
and better services`.

Due to the importance of money capital as opposed to industrial capital,
ESKOM does not take reproduction function seriously. The ESKOM Conversion Bill
not only intends to corporatise the state power utility, but it also wants to
list it on the stock exchange. This intention could be attributed to the break
of the MEC replaced by the mineral energy financial complex (MECF) as a new
regime for capital accumulation in the era of globalisation. One neo-liberal
economists, Czypionka, argues that ESKOM should be listed and it would become
one of the largest single entities on the stock exchange.

Capital does not want to invest in new productive sectors of the economy due
to the fact that variable capital (labour power) is no longer as cheap as
it was in the colonial period due to the political independence of colonial
countries. This makes it difficult for capital to accumulate on the basis of
cheap labour. For this reason, capital would rather opt to buy the already
developed infrastructure in order to accumulate.

As earlier pointed out, the current regime of capital accumulation is based
mainly on financial capital as a key site of capital accumulation, does not
really require the reproductive function of the state due to the fact that it
requires less workers. Under the dominance of industrial capital the state
played a key supportive role for the industrial capital by providing the
infrastructural and reproduction of labour. Electricity was one of the
instrument used by the state to provide reproductive and production support to
industrial capital. But under the dominance of financial capital the state is
increasingly withdrawing its reproductive function.

The current electricity cuts-off and high tariffs of electricity lend support
to the proposition that the increasing domination of money capital results in
less pressure on the state to play its reproductive function. This is coupled
with the decline of the industrial capital which finds concrete expression in
the massive job losses in the manufacturing sector. Job losses, casualisation of
work, low wages coupled with the hyper-commodification of services (e.g.
electricity, education etc) defeats the electrification programme because people
cannot pay for these services.

Due to fiscal austerity prescribed by GEAR, ESKOM has a financial crisis; it
has to apply stringent measures such as the pre-paid card system that shuts off
access to power when there are arrears. Furthermore, ESKOM has to be taxed to
generate money since there has been a decline in corporate tax.

Conclusion

Drawing from the above discussion it is evident that the state’s role in
the economy is shaped by different regimes of accumulation. The classical
liberal state was influenced by the needs of industrial capital, which required
the state to provide the social and technical infrastructure for capital
accumulation. The Keynesian welfare state was influenced by over-accumulation
and the state had to intervene in order to stimulate demand. The developmental
state in newly industrialized countries (NICs) was also influenced by the world
regime of capital accumulation. Since the 1970s these developed capitalist
states have experienced tremendous problems resulting in the rise of the
neo-liberal state which argues for a minimal role of the state in the economy.
The rise of neo-liberalism is also informed by changing capital accumulation
globally with the rise and domination of financial capital. Increasingly the
state has abdicated its reproductive function.

South Africa as part of global capitalism is influenced by the regime of
capital accumulation. The Minerals-Energy Complex, which was state driven in the
course of the 20th century, was influenced by the dominance of
industrial capital. The state provided massive support in the form of provision
of the electricity to industrial capital to mechanise the labour process and
subsidise wages. The rise of financial capital, underpinned by neo-liberal
ideology is increasingly changing the nature of South African capitalism and the
advocated role of the state thereof. This finds expression in the current ‘restructuring`
of ESKOM which is moving towards privatisation in line with the idea that the
market is more efficient because is based on individual competition. The
emergence of neo-liberalism is changing the role of the state in the economy and
is facilitated by massive attacks on the working class leading to a relative
decline in working class organisation.

The argument that apartheid-era industrial policy was simply based on
"import substitution" has led to the myth that
"liberalising" and "privatising" are an essential part of
removing the apartheid legacy. The extent to which these assumptions are, in
fact, shaped by the interests of globally and nationally dominant finance
capital is obscured. The active developmental use of parastatals like ESKOM to
spur a different more people-oriented growth path is critical.

ARTICLE 4

Is the Multi-billion Rand Arms Deal in the Interest of the
Working Class?

By Vishwas Satgar – the Provincial Secretary of the SACP
in the Gauteng Province

The media in South Africa has been the most influential institution in
setting the terms of debate on the multi-billion Rand arms deal. Within our
movement (ANC-led Alliance), and including our party, there has not been much
debate. Everyday the media has tried to force "chinks" in the
politically fortified arms deal. The "media guerrillas" initially
tried a frontal assault and raised the question: guns or butter (mielie meal)?
This failed and then pot shots were taken at the job creating impact of the
trade offsets. Eventually this was eclipsed by the price of the arms deal. The
exchange rate and how this escalates the actual value of the arms deal, has
become the new rallying call to society, alongside the corruption factor. The
latter is a new front in the battle for public opinion, which has forced the
government to investigate the arms deal, but mainly the secondary contracts. The
ferret eye of the media is watching this investigation closely.

For the political opposition in South Africa the media has become an ally.
Opposition elements participating in the Standing Committee on Public Accounts
(SCOPA) in parliament, Patricia de Lille and the DA all enjoy media created
platforms to challenge the ANC government’s arms deal, with the main intent of
discrediting and delegitimatising the government. In this context, is it
possible to have a principled left-wing debate about the arms deal without
discrediting the government? Put differently, how can the Communist and wider
left debate influence government policy on the arms deal to ensure that the
public interest and ultimately working class interests are advanced? To answer
this question requires us to answer, first, a more fundamental question: Is the
multi-billion Rands arms deal in the interest of the working class?

Some Communists might defend the arms deal simplistically on the grounds that
it will "arm the revolution". In other words, Communism is about
violence. They are wrong. To conflate militarism with Communism reflects a deep
misunderstanding of the role of violence within class struggle. Lenin when
studying the German military strategist Von Clausewitz, imbibed a very important
axiom: "war is the extension of politics". In other words, war and
violence were not ends in themselves but had to be subjected to the political
first and foremost; implying that if political solutions can be found through
non-violent means then these should also be privileged. Revolutionary violence
to achieve socialism, within the Leninist scheme, has always been contingent on
political strategy. In addition, many Communists believe that the
"Dictatorship of the Proletariat" is a military concept, when in
actual fact it is both ideological and political-strategic. It is ideological in
the sense that it reflects a social order that upholds the interests of the
majority i.e. working class and it is political-strategic in the sense that the
working class would use coercive or military power to defend it’s revolution
against counter-revolution, if needs be. Cuba is an interesting example of a
revolutionary society that has armed its population, through Committees for the
Defense of the Revolution, in case of a US imperialist attack. All this means is
that Communism and the struggle for a socialist society is not intrinsically
violent and therefore the arms deal cannot be justified in these terms.

To take this further, in South Africa the present army is not fully
transformed. While our approach to defence policy has been novel in terms of
trying to ensure civilian control, primarily through public participation in
defence policy formulation, this has not prevented the `arms deal` from coming
on to the defence policy agenda. The `arms deal` from a political point of view
can be analysed in several ways: In the first instance, it is an attempt to
divide the armed forces - in the main pitting the navy and air-force (given that
they are the main beneficiaries) against the army. Secondly, it re-inforces an
orientation towards a defensive posture and policy - policing our waters through
corvettes and so on to prevent theft and poaching. Thirdly, it opens the way to
ensuring South Africa can occupy a seat in the UN Security Council and /or be
enlisted as the primary peace-keeping force for the UN in Africa. The
implications of this are to ensure the untransformed army is kept on a
professional footing and accepts in practice a role of managing and enforcing
peace so that democracy can prevail. In other words peace-keeping missions are a
way of re-moulding the army, in the context of a democratic transition like
ours.

All these measures do not address the question of political control of the
armed forces. In addition, the formalism of the constitution, which freezes the
loyalty of the army into clauses and words, does not guarantee full political
control. Thus far the experience of integration of non-statutory and statutory
armed forces has amounted to the co-option and complete assimilation of the
former. Many former guerillas are disillusioned and disaffected with the pace of
transformation and many are leaving the armed forces. Others like in the Tempe
army base incident have psychologically broken down and have massacred their
white counter-parts. This is not a solution but merely reflects deep-seated
frustration and racial hatred. The armed forces are increasingly being perceived
as the insurance policy of the white minority elite, in case a more radical
program is asserted from the side of the ANC-led Alliance.

It is in the interests of the working class fundamentally to ensure that the
armed forces are democratised in the sense that: they are placed firmly under
the political control of the new democratic government and civilian control is
strengthened. For this goal to be realised the main guarantee to make this
happen is a working class led peace movement in South Africa which advances an
agenda for thoroughgoing demilitarisation. Such an agenda has to work towards
some of the following:

• Redirecting government resources and expenditure away from the armed
  forces towards reconstruction and development;

• Ensuring greater parliamentary oversight over the army;

• Improving the quality and profile of the debate on the future of the
  armed forces and related agencies like the military intelligence;

• Strengthening civil society involvement in defence policy formulation and
  in other institutions of civil-military interface;

• Promoting and building a peace movement in Africa, that agitates for the
  end of conflicts in places like the Democratic Republic of Congo and
  champions the need for radical SADC reform to include planning of
  development and economic integration and the formation of a SADC parliament.

The arms deal is not in the interests of the working class. For the SACP to
lead the reversal of the arms deal requires a debate that begins with the
formation of a working class led peace movement and its demilitarisation agenda.
Such an approach, which must spill over into and involve the ANC led Alliance,
will strengthen the new democratic government rather than undermine it. In
Gauteng such a debate must happen at the up-coming provincial Congress and a
resolution on this issue must be sponsored at the National Congress of the SACP,
next year.

Communists have always championed the cause of peace and security in their
struggle against imperialism. During World War I Communists were the most
uncompromising in opposing the war and arguing for peace. In World War II
Communists only took up arms when the Nazi`s attacked the Soviet Union. During
the `Cold War` Communists have consistently argued against nuclearisation and
for disarmament primarily because they understood how irrational the resource
squeeze of the `Cold War` arms race was on the Soviet Union and the threat
thermonuclear warfare posed to the existence of humanity. Today, the US hegemon
continues its nuclear defence program, regional conflicts proliferate and plague
Africa, in particular. The AK 47 is also no longer the symbol of Communist
insurgency but is used by Muslim fundamentalist guerillas. The world today,
particularly the global capitalist system, is an extremely volatile and unstable
place. Humanity is at a cross-roads. For Communists it is imperative, again, to
be at the vanguard of humanity, struggling to defend peace, demilitarisation,
democracy and co-operation. There is no other rational alternative.

ARTICLE 5

Impressions and Memories of Communism in South Africa

By Denis Goldberg, who is a founder member of uMkhonto
weSizwe and was one of the trialists in the notorius Rivonia Treason Trial.
Goldberg recived three life sentences at that trial. A longer version of this
article was originally written for the July-August 2001 double edition of
Sozialismus, a theoretical monthly publication published in Hamburg, Germany

This is a personal recollection of impressions of the Communist Party in
South Africa. It is not about the processes of decision-making or policy
formation and it is not a history of the SACP and its predecessor the CPSA.

My impressions start in my childhood. My parents were born in Britain and
settled in South Africa in 1929. They arrived with their communist identity
already established. My father told me that the greatest moment in his life was
while he was in New York in the USA on 7 November 1917. There, at Grand Central
Station he saw the triple-decker banner headlines, REVOLUTION - BOLSHEVIKS
SEIZE POWER!

He had become a sailor in the British Merchant Marine because he did not want
to be a combatant in the Imperialist World War. On the other hand he did not
want to be locked up in prison as a conscientious objector. He acknowledged the
contradictions of his position because the merchant ships he served in also
carried war materiel.

My mother had gone to regular meetings of the Hackney Socialist Sunday School
in London in England. Her two brothers, Joseph and Abraham, had worked with
Maxim Litvinov, first Minister Plenipotentiary to Great Britain of the new
Bolshevik state. Both later went to the Soviet Union and settled permanently
there. Joe was the CPGB delegate to the founding Congress of the Comintern and
worked in that organisation for many years. Bram became a bank official and was
eventually sent to New York to open the AMTORG Bank there to handle the credits
obtained from US banks to finance the five year plans. He was eventually
dismissed for his opposition to the Soviet credits to Nazi Germany in the years
before the Nazi attack on the Soviet Union in June 1941. Bram was posthumously
re-instated as a member of the CPSU because his expulsion had been done without
any hearing or defence.

My first conscious recollections then were of meetings in my parents’ home
of people of all races who met to discuss the work of the Woodstock, Cape Town,
Branch of the CPSA. That was itself unusual in racist South Africa. So that on
the first day of my school career, exactly on my sixth birthday in 1939 and the
best present I had ever had, they told me that I was not to be upset if teachers
or other school children called me Communist, or Kaffir Boetie (Kaffir brother,
Nigger lover) or of course, Jew boy. I was to simply say that my parents would
deal with any criticism of them and I did not have to defend them. I loved them
dearly and of course I did defend them.

During the war years the Communist Party became semi-accepted by the
authorities in the sense that the Soviet Union were ‘Glorious Allies’
against the Nazi Evil. The Medical Aid for Russia fund was established with the
Prime Minister General Jan Smuts as Patron-in-Chief!

There was considerable resistance to South Africa’s participation in the
war against the Nazis by right wing white Afrikaner nationalists who were
violently anti-British and sided with Nazi Germany against Britain and its
allies. There were newspaper reports of terrorist attacks on white SA soldiers
in uniform and against British servicemen who were in South Africa for training.

At the same time the organisation the Friends of the Soviet Union was very
active and I remember seeing many flickering cinema films shown on a creased
white sheet by a noisy 16mm projector. There was the Malachite Casket to
show indirectly how the war was devastating the cultural brilliance of the
Soviet Union. There were films of the May Day Parades in Red Square and I have
an abiding memory of gymnasts in white vests and trousers tramping along inside
a tank track, rolling it along and demonstrating in my young mind that they were
ready to be soldiers to defend the Soviet Communist Motherland. There was a film
about Soviet exploits in the Arctic when they flew aeroplanes to land on a giant
ice floe to leave a scientific team to study ocean currents and weather until
the next summer would melt there ice platform. The new society seemed ever
inventive and resourceful and the young men and women were very beautiful.
Communists like my parents and their comrades revelled in these successes and
the freer atmosphere in which they could function in South Africa.

The Guardian newspaper benefited from the wartime conditions of
somewhat greater freedom. It was a great organising medium and its sales, I
later learned, reached 48,000 copies of each weekly edition of 16 pages. It
would have had more pages but paper was rationed to all newspapers because of
the shortage of supplies.

It of course took up issues relating to wages and working conditions of black
workers who flooded into the cities even though the laws controlling their
movements had not been repealed. As the older people said, "When profits
are to be made, laws are disobeyed." Increased industrial production
resulting from the cutting off of supplies from Britain and Europe increased the
economy dramatically. Industrial production doubled from 1939 to 1945. Workers
responded to trade union organisers, especially communists, black and white, who
saw the need and the opportunity for organising workers.

At the same time "the paper", though not officially a publication
of the CPSA, reflected the views of "the Party" and carried many
articles on the war, especially after the Nazis attacked the Soviet Union. What
surprised me even then, and I was only 12 years old at the end of the war, was
how accurate it was in its coverage of major battles and in its assessment of
strategy to defeat the axis monster (the alliance of Nazi Germany and
Militaristic Japan). The demand for the second front was a steady refrain and
the assessment of the importance of the war in all theatres was significant. In
my recollection, most mainstream newspapers focused on the daily battle news
with far less analysis of overall trends. Of course, daily papers had more space
compared with the Guardian. Still, I recall the accuracy of the predictions of
what each armed force would do and what the outcome would be.

There was a great deal about the Red Army and the way the mass of the people
fought for Comrade Stalin and the Mother Land. There were warnings of course
about the dangers of the Western Allies making a separate peace and leaving the
Soviet Union at the mercy of a revived Europe and America. In a way it
foreshadowed the cold war anti-Soviet attitudes of later years.

In 1943 there was a general election for the white parliament and two
Communist Party candidates were nominated in Cape Town: Dr George Sachs and
Harry Snitcher a lawyer. Both were heavily defeated of course but their
campaigns gave the opportunity for political campaigning for socialism and
support for the Soviet Union. Young as I was I remember that there was heavy
debate about the tactic of using the whites only election as a platform for
campaigning against the racism of the system, called segregation at that time.
As a boy I wrote envelopes for sending election manifestos to the voters and
Moses Kotane, the General secretary of the Party, praised me. I also wrote
envelopes for sending out information for the Friends of the Soviet Union and
was praised by the Reverend Bishop Lavis of the Anglican Church for my good
work. He was Chairman of the FSU at that time. I remember trying to read The
Socialist Sixth of the World by Archbishop Hewlett Johnson, a book in praise
the Soviet Union.

During that time a number of white Communists stood for election to the Cape
Town City Council and as the Coloured people were eligible to vote some were
elected. Among them were Betty Radford, editor of the Guardian and wife of Dr
George Sachs, and the lawyer Sam Khan. In Johannesburg Hilda Bernstein was
elected to the Johannesburg City Council.

Sam Khan was later elected to parliament as the white Native Representative
of Black African people in the Western Cape Province, the area around Cape Town.
Again there was a heavy debate about the strategy and tactics of using the white
parliament as a platform to oppose its racist basis. There was no doubt about
the support the Party had among African people, and Sam Kahn could not have
stood for election without their agreement and support. Through his legal work
in defending African people against the effects of racist laws he had become
very well known.

In Parliament Sam Khan was sensational. He made speeches on just about every
issue and piece of legislation, finding a Marxist approach in favour of the
working class and in opposition to racial segregation. He seemed to hit the
headlines in the daily papers on most days, and of course the Guardian reported
just about everything he said. After the Afrikaner nationalist party was elected
to power in the white’s only election of May 1948, he was up against a rabidly
racist government that transformed segregation into the much harsher racism of
apartheid. He was tireless but of course he was expelled from parliament after
the passage of the Suppression of Communism Act in 1949.

There was a formal hearing by parliament before they could expel him. He
defended himself of course, showing that it was apartheid South Africa that was
undemocratic, and that the kind of Society envisaged by the CPSA would be
democratic. He also read the Communist Manifesto into the Parliamentary record
so that it might be available to interested people in later years. But it was
also a tactic that really stirred up the anger of the government and the
official opposition that had the support of the major big business concerns.

The CPSA was declared illegal in 1950 and re-formed as the SACP some years
later. It was difficult to accept the Central Committee decision to dissolve the
Party in the face of the Suppression of Communism Law of 1950. The predominance
of white professional people on the Central Committee would in practice have
made its continuation underground unrealistic. Black members later told me how
shattering the decision was. In the fruit growing and canning town of Paarl,
near Cape Town, members felt that Comrade Wolfie Kodesh who took the message of
the dissolution to a branch meeting must be a traitor, and he told me that he
felt lucky to escape unharmed.

At the time of the banning of the CPSA and the ANC and other organisations,
the party programme was still the one published shortly after the end of the
Second World War. My memory of it was that it put forward demands that had been
won by workers in most industrial countries many years before. Even the USA
weekly publication Life, in a series of articles about Communist Parties
around the world, described the CPSA programme as not revolutionary but calling
for the things accepted as normal everywhere. There were of course demands for
all people to have the right to vote and to be elected to all governmental
bodies, the right to housing, to live together as families, to education and
health care.

I do not recall anything that could be directly said to have been a programme
for the seizure of power to set up a socialist state. But the idea of a
democracy of all the people was radical in the South African context. Its
achievement then would have transformed all the political and industrial
relationships and the result could have been a "normal" capitalist
society with social democratic tendencies, or there might have been a socialist
revolution. How long is the time between the moment of the February Revolution,
and the moment of the October Revolution? We still do not know the answer. We
still do not know if that is the right question to ask!

During the Treason Trial after the arrest of 156 leaders in December 1955
former members would dig up their Party membership cards from where they had
buried them to show speakers at meetings of support that they still supported
the Party. Of course the Treason Trial was directed to trying to prove that the
Freedom Charter adopted at the 1955 Congress of the people was a Communist
document and that the ANC and its allies were plotting the violent overthrow of
the apartheid state. In legal terms the trial was a failure for the government.
In political terms it put a tremendous strain on the progressive movement as a
whole. For four years the accused were in court day after day. One definite
advantage however was that people who had been forbidden to speak to each under
the Suppression of Communism law were now able to meet together every day to
exchange ideas and plan future political strategies. There is no doubt that
relations between the ANC and the new SACP were greatly strengthened at this
time.

In Cape Town, after I had become politically active in 1953, I met and worked
with African Comrades like Archie Sibeko, a leading trade union activist,
Looksmart Ngudle an organiser and activist who worked for the Guardian
newspaper, Zollie Malindi and Bernard Huna. There were others, men and women.
Some were members of the old CPSA and told me that they had been members of the
Woodstock Branch of the Party. They had known me since my childhood because my
parents were members of the Party and my Dad had been Education Secretary in
their Branch. They needed to see if I was serious about my commitment before
they fully accepted me, they said. I was allocated to a Party Cell with mainly
white members, essentially for security because people of different races
meeting together were immediately under scrutiny by the security police. Later
my Cell was racially mixed and despite the difficulties I felt that I truly
belonged to the vanguard movement for liberation.

Archie Sibeko was deeply involved in the liberation politics of the African
National Congress, the South African Congress of Trade Unions, and the South
African Communist Party. He said it was easy to be a member of all these
organisations. He said there was no conflict between them. When he was involved
in the politics of national liberation, then the ANC was the place for that.
When he wanted to be involved in the improvement of pay and conditions of
working people, then the trade union movement was the right place for that
activity. But, he said, when he wanted to understand why there was national
oppression, and why working people were paid low wages, and why there was mass
unemployment, then he turned to the Communist Party. He said that in the long
run the only way to ensure that people of different national groups in South
Africa could be free was to follow the programme of the Communist Party. He said
that national liberation and working class liberation were all part of "the
Revolution."

In the 1950s there was tremendous argument about the nature of national
oppression and national groups, nationalities and nations. This arose because
there was the need to recognise the role of the ANC as the leading element in
the struggle for national liberation. Hence the emergence of the Congress
Alliance of organisations led by the ANC. The other organisations were the
Indian Congress, Coloured People’s Congress, Congress of Democrats (whites)
and the non-racial South African Congress of Trade Unions (Sactu). Were these
all nationalities? Were they all national groups? Or were the organisations a
natural response to the apartheid laws that divided our people by blurred
characteristics for the sake of oppression to make profits. Everyone knows the
simple truism that all businessmen base their strategies upon: cheap labour
makes fat profits! That is what it was apartheid was about.

I can remember a meeting of perhaps fifty people convened to discuss some
emergency activity to protest a new form of oppression. I had just read an
underground Party document on the subject. It was difficult to formulate the
ideas in a way that would not reveal that I had read the document. After all,
underground is underground! Bernard Huna showed no such inhibitions. He simply
quoted the document and so I knew for certain that he was a member of the SACP!

In my party cell I remember presenting a discussion of Mao Tse Tung’s
theory of antagonistic and non-antagonistic contradictions. What a task that was
because it had to be done from memory, as we dared not carry notes or books with
us at meetings.

During the thirties and forties when I was still a boy I learned many Party
songs from my Mother and her comrades. Some were from the International Brigade
that fought on the Loyalist side against the fascists in the Spanish Civil War.
Years later, after I was released from 22 years in prison in 1985, I represented
the ANC at meetings in many countries. In Spain at the annual Fete of El
Mundo Obrero, the newspaper of the PCE, I was introduced to many people as a
"hero of the South African struggle". I felt truly humbled by meeting
comrades who had been imprisoned for over thirty years. One comrade who had been
imprisoned by the Francoists for "only" 28 years told me that the
rather frail old comrade, a women, sitting quietly by had served the shortest
time of their group. She had been in for only 22 years! There they were,
active again in whatever ways they could be. In Denmark I met the International
Committee of the CP. Then I joined the Party Members and the staff in their
Christmas dinner, Julfest, and found them singing party songs. I was able
to join in and even start us off by singing in English, or memorised German, and
they would join me after half a line. What a worldwide club we were!

In the USA while on a speaking tour I spoke at a Unitarian Church one Sunday
morning. My host told me he was a veteran of the Lincoln Battalion of the
International Brigade. He was a good 20 years older than I was. I showed him
that I knew about "his" war by singing Hans Beimler, Commissar
and Freiheit! We sang together and were asked if we had previously met.
He answered when he introduced me to the congregation. He said that we had met
only five minutes before but that we had known each other all our lives! I am
moved still by his words. In American political language he was a ‘premature
anti-fascist.’ To me he was a hero!

The Rivonia Trial and its aftermath

In 1963 the underground people’s army, Umkhonto we Sizwe, meaning The Spear
of the nation in the Zulu language, was launched. The founding Commander in
Chief was Nelson Mandela, but it was clear that the SACP and some members of the
ANC were the political and military leadership in this new element in the
struggle for liberation. In 1963 new laws provided for Detention for 90 Days at
a time until answers to the satisfaction of the police were given. It was a
licence for the police to torture their victims. They did! I too went
underground at that time. I left Cape Town where I was a member of the Western
Cape Regional Command to go underground in Johannesburg and was incorporated
into the Logistics Committee of the National High Command. My skills as a
trained Civil Engineer were needed to lead the manufacture of our own weapons of
war. Arrested at Rivonia, near Johannesburg, we were joined by Nelson Mandela
who was serving a 5-year prison sentence. We were sentenced to four terms of
life imprisonment. I was in for 22 years until I was released in 1985. Nelson
Mandela was the last of us to be released in 1990, after he had been inside for
27 years.

Among my comrades accused with me were Rusty Bernstein and Ahmed Kathrada who
proudly stated their Communist Party membership and the great sense of
responsibility this led to because they understood the nature of the oppression
in South Africa and therefore the need for responsible leadership of the
struggle for liberation. Their absolute political consistency and lack of
opportunism was quite unshakable.

Many of the state witnesses were tortured under Ninety day Detention and were
brought straight to the courtroom from their prison cells. It was striking that
having been coerced into giving evidence almost all of them would speak about
their ANC membership but not about their party membership. The state wanted of
course to prove that we were a communist conspiracy because that would win them
backing from the West as Cold War Allies. In a sense they succeeded because
Western governments supported them. But they also failed because vast numbers of
people in those countries found apartheid to be so awful that the "red
scare" was irrelevant to them.

During our trial there were witnesses who had attended a training camp at
Mamre near Cape Town around Christmas time in 1962. I had been the main
organiser with Looksmart Ngudle and other committee members. We had been
arrested by the police but they could not prove a case against us at that time.
In 1963 Looksmart died while under detention. His torturers said he had
committed suicide. I believe he was murdered. During the Rivonia Trial, the
prosecutor asserted that I was responsible for his death because, a witness
said, I had instructed my comrades at our Camp that it was better to commit
suicide than give information to the Security police. Looksmart was a wonderful
Comrade: an African Nationalist, a Communist, and a freedom fighter who had a
marvellous smile and loved life.

Among the young people I worked with was Martin Hani. He left South Africa
with Archie Sibeko to escape imprisonment for carrying on illegal activities of
the ANC. They both underwent military training in the Soviet Union. Under the
name Zola Zembe, Archie returned to trade union organisation in exile. Chris,
renamed Martin, became an outstanding Commander in Umkhonto we Sizwe. He was
also the General Secretary of the SACP and was elected to the national Executive
of the ANC with the highest number of votes at the first full National
Conference of the ANC in Durban during December 1991. The ANC was effectively
relaunched at this conference.

Chris/Martin was destined to become a Cabinet Minister in Nelson Mandela’s
government after the first democratic elections of all the people in 1994. Rabid
white right-wingers assassinated him because of his leading position. They
miscalculated in their attempts to stop the transformation of South Africa. His
murder sparked such a wave of anger that the old apartheid politicians could
delay the process no longer and the first free democratic elections of the
representatives of all our people were held in April 1994. Nelson Mandela,
President of the ANC, became President of South Africa.

I met Chris in 1985 at Lusaka airport after my release from prison. I was
waiting for clearance to enter Zambia to meet ANC President Tambo and the
National Executive when I was embraced so tightly by a large soldier in a an
army greatcoat that I could not see his face. A voice said, "Denny! Its
nice to see you!" Twenty-five years after last meeting him, Chris’s voice
was the same and I recognised it immediately. Some years later, in Sweden when
Nelson Mandela visited that country to thank them for their support against
apartheid, Chris introduced me to his comrades on the National Executive as
"My first Commander in MK." He was a big man in every sense of the
word.

He told me that just before the elections in 1994 he had at Nelson Mandela’s
request investigated the influence of the Party in the ANC. He had found that
well over three quarters of ANC Branch Chairmen, Secretaries and Treasurers were
also Party members. It was clear that their dual membership was not only not a
secret; it was the reason for their election to these posts. They were highly
regarded as dedicated and trusted comrades.

That leads me back to a speech by Nelson Mandela in September 1993 at a
Conference of the Congress of South African Trade Unions (Cosatu) when they
decided upon their candidates to be included in the ANC lists for the first free
democratic elections and to elect their replacement officials. Nelson Mandela,
as President of the ANC, set out the election manifesto. Having done that, he
laid aside his prepared speech. He told the more than 3,000 delegates that he
knew that some Cosatu members feared that the ANC would betray the working
class. He said that was impossible because the main membership of the ANC were
workers. He said, the ANC was a democratic organisation and if they did not
trust their leaders they should elect new ones! 

He then said that many of the delegates were also members of the SACP. He
said some of them also feared betrayal. He said the leadership could not betray
the Party. It was the Party that first showed that a non-racial future was
possible and their members met and socialised on a non-racial basis. He also
said that too much blood had been spilt together in the struggle for there to be
a betrayal by that leadership. He said he could not speak for a future
leadership. He then told them that the only way for the SACP to be heard was to
be organised, to be strong, and to have a clearly defined policy that had mass
support. In other words he was saying that in the long run politics is not about
sentimentality, it is about organised class forces. Was Nelson Mandela a
Communist? He has never claimed to be one and in his famous speech in the
Rivonia Trial he denied being a member of the Party.

I have to say that in the speech cited above he showed himself a better
historical and dialectical materialist than most communists I have met! While we
were on trial together, he took me aside sometime shortly before we were to be
sentenced and with great emphasis told me that when we Communists explained
Marxism we must relate the theory to South African experience. He said that the
mass of African people had no idea of European slavery, serfdom and feudalism.
Therefore the historical development of political theory and the European
formation of social classes had no meaning for them. We should relate the theory
to South African history and South African material conditions, he said. I asked
him why he was telling me this. He kind of shrugged without giving a real answer
but I knew he thought he would be sentenced to death as Commander of MK. While I
agreed with him about that, I thought we would all be executed for our
conspiracy to overthrow the state by force of arms and some other related
charges.

In prison we did not form an overt party cell. But those of us who were Party
members found a natural affinity with each other, but were very careful indeed
not to create divisions within our ranks. On the contrary, we saw that maximum
unity was the price of survival in prison where there was a continual battle to
preserve our dignity against the inhumanity of the system. The same happened on
Robben Island and it is not insignificant that Govan Mbeki, member of the
Central Committee, was a driving force in turning the prison on Robben Island
into a University of the Revolution.

Bram Fisher who had defended us in the Rivonia Trial also went underground.
He had been charged with other members of the Party’s Johannesburg Regional
Committee, including Lewis Baker, Eli Weinberg and others. He had been given
bail to go to London to act in a court case involving the patent rights of Bayer
over the medicine Aspirin. In London Party Members of the last internal Central
Committee, now in exile, tried to persuade him to remain in exile. He refused,
not because he had given his word to return for the trial, but because he had
given his word to our comrades in South Africa that he would return. His loyalty
was not to the apartheid state but to the Liberation Movement.

Having gone underground he managed to survive for about nine months with ever
decreasing resources. His contacts were ruthlessly followed by the Security
Police until they arrested some older comrades, who were tortured into revealing
where he was. One of them, Issy Heyman, attempted suicide in prison because of
his sense of failure. The torture had been severe and we cherished our comrade
until he felt his self-confidence return.

Bram too was sentenced to life imprisonment. He never stopped fighting the
regime whether in his mind or in other ways. Because of his standing in the
legal profession he was the one judges who visited the prison would speak to. It
was strange to see two middle aged gentlemen sitting together on chairs in the
sunshine speaking about prison conditions. One of them was of course free to go
home after the discussions! Bram stayed! thinking political strategic thoughts.

Although we were officially denied newspapers and radio news bulletins,
prisoners are resourceful. We were able to in various devious ways to know in
broad outline what was happening in the world. We knew of the growing strength
of the Soviet Union’s deep-sea navy that enabled them to keep the North
Vietnamese people supplied with the resources needed to eventually defeat the
Imperialist camp in that struggle. One day we saw a report of the Soviet Union’s
Kirov Class Cruiser and its task force steaming past the Commonwealth Conference
of Heads of Government taking place in Singapore. The report remarked on the
political frisson those political leaders felt at this show of force in
what had once been British Colonial waters! Bram with his strategic brilliance
saw a way in which the ability of the Soviet Union to project its power on a
world scale could aid the liberation of the whole of Africa. He saw that such a
fleet could turn the Indian Ocean on Africa’s east coast into a source of
anti-imperialist strength. I know that this strategic paper was memorised by at
least two comrades, one a communist and the other not, who conveyed it to
contacts in the Soviet Party. We saw the development of the strategy in
practice. What I cannot know is whether it flowed from Bram’s thinking or from
the general development of Soviet Strategy. I think both.

Bram was enormously highly regarded in the Soviet party and he was awarded
the Lenin Peace Prize. He was an extremely modest man and did not himself tell
us about this honour. The news came from a visitor to another prison comrade.
How we rejoiced, Party and non-Party members alike. The Cold War was at that
time an irrelevance in most of the Liberation Movement led by the ANC.

What we were conscious of was the enormous sacrifice the people of the Soviet
Union and its allies were making both to support liberation struggles in many
parts of the world. Of course, that strategy was also part of their strategy to
hold the imperialist camp in check.

I have tried to give a flavour of the past. I need to comment about the
period after the ending of apartheid.

From prison to the public relaunch

The public relaunch of the South African Communist party in 1990 after the
unbanning of our political organisations was a great affair with thousands of
participants and all the flags and banners flying as never before.

Of course the old cold war warriors were demanding the banning of the Party.
Nelson Mandela in his speech on that occasion said that he would not ban the
party. He traced some of the history referred to above. But even more
significantly said that South Africa could not build a democracy by starting off
with the undemocratic prohibition of a legitimate political party.

Joe Slovo was by this time Chairman of the Party. Like Chris Hani his support
ran throughout the whole liberation movement. He had been a leader in MK and in
the political structures of the liberation movement. He had been very
influential in ensuring that the Party did not become a faction within the ANC
but obeyed its constitution, rules and policies for the maximum "unity in
action" to overthrow the apartheid regime.

International support for the armed struggle came from the socialist
countries. Without the support of mainly the Soviet Union directly to the ANC
and Umkhonto we Sizwe, and the support of the German Democratic Republic, Cuba
and the rest of the socialist countries, the struggle could not have continued.
Most of the western countries treated the ANC as a terrorist enemy and refused
support. Sweden under the leadership of Olaf Palme was the great exception. He
was able to convince the rest of the Nordic countries to give solidarity support
of a political and humanitarian kind to the national liberation struggle.

There is no doubt that this support from the communist bloc contributed to
the Party’s status inside South Africa.

In the broad anti-apartheid movements around the world there was genuinely
mass support for the liberation struggle. Churches, trades unions, groups of
artists and writers and professional bodies, and members of many political
shades and opinions gave their solidarity especially in demanding economic
sanctions against apartheid South African exports. They played a significant
role in isolating and then ending apartheid.

When I was released in 1985 and went into exile in Britain I was able to
travel the world building solidarity with the struggle for national liberation.
It seemed to me that in many countries it was communists who provided the
backbone and stability that kept the solidarity movements going even when times
were difficult for them. Their support seemed to be unconditional while others
were seeking to influence the outcome in South Africa in Cold War terms.

There was a strange contradiction in that as the Soviet Union became weaker
through its internal problems, and that affected the whole group of countries,
the possibility of a settlement by political means of the conflicts ion Southern
Africa became more realistic. The removal of the Berlin Wall seemed to be the
clear signal that things in the whole of the Southern African Region would
change. Some of the changes were the defeat of socialist forces and the re-entry
of reactionary groups. But the end of apartheid was then a certainty. The
prospect of reconstruction in a much freer political situation was about to come
about.

The Party when it was legalised in 1990 grew very rapidly. It s reputation in
the struggle was very high. Nevertheless, like other Communist parties sharing
government office in a capitalist system it has a very difficult time. The
reality is that not only was the old regime overcome by negotiation in a
position of deadlocked forces, the transformation is to a form of overtly
non-racial capitalism. It is not a transformation to the foundations of
socialism. Communists therefore have to participate in trying to ameliorate the
worst aspects of the old capitalism in favour of the oppressed black workers and
unemployed and landless people, and they must also ensure that the system
continues to function. It is therefore not surprising that the revolutionary
alliance led by the ANC with the Party and Cosatu goes through some rough times
of confrontation.

What is the future of Communism in South Africa after 80 years of
activity?

The gross inequalities of wealth, employment and access to land will continue
to provide the conditions in which communists can play a role. That role is at
present the role Marx established when he wrote Das Kapital. The subtitle
of that work is A critique of capitalism. The theoretical task is still
to develop that critique for the situation of the people of South and Southern
Africa to show that capitalism is incapable of solving the problems of all the
people. The contradictions are too great.

Huge advances are being made in all social and educational aspects of
society. When we consider that only seven years have passed since the formal
ending of apartheid we can see that much has been achieved, with much more still
to be done.

References

• Rusty Bernstein: Memory Against Forgetting, Penguin Books (South Africa),
  1999, Johannesburg

• Joe Slovo: The Unfinished Autobiography, Ravan Press South Africa ,1995,
  Randburg

• Stephen Clingman: Bram Fischer- Afrikaner Revolutionary, Mayibuye History
  and Literature Series No.86, Mayibuye Books UWC, 1998, Kapstad

• Anthony Sampson: Mandela - The Authorised Biography, HarperCollins, 1999,
  London

• Vladimir Shubin: ANC - A View from Moscow, Mayibuye History and
  Literature Series No.88, Mayibuye Books UWC, 1999, Kapstad

• Joel Joffe: The Rivonia Story, Mayibuye History and Literature Series
  No.57, Mayibuye Books UWC, 1996, Kapstad

ARTICLE 6

Envisioning Real Utopias

Presentation By Erik Olin Wright, to a seminar hosted by
the Cadreship Development Desk at the SACP Head Office in June. Erik Olin Wright
is a Professor of Sociology at the University of Wisconsin where heads a
programme in Class Analysis and Historical Change and directs the Real Utopias
Project. His books include Classes (Verso, 1985), Reconstructing Marxism (Verso,
1992), Interrogating Inequality (Verso, 1994), Class Counts (Cambridge
University Press, 1997 and 2000) and jointly with Archon Fung, Deepening
Democracy: Institutional innovations in empowered participatory governance.

The expression "Real Utopia" may seem like a contradiction in
terms. Utopias are fantasies, morally-inspired designs for social life
unconstrained by realistic considerations of human psychology and social
feasibility. Realists eschew such fantasies. What is needed are hard-nosed
proposals for pragmatically improving our institutions. Instead of indulging in
utopian dreams we must accommodate to practical realities.

The idea of envisioning real utopias embraces this tension between dreams and
practice. It is based on the belief that what is pragmatically possible is not
fixed independently of our imaginations, but is itself shaped by our visions.
Self-fulfilling prophecies are powerful forces in history, and while it may be
polyannish to say "where there is a will there is a way", it is
certainly true that without "will" many "ways" become
impossible. Nurturing clear-sighted understandings of what it would take to
create social institutions free of oppression is part of creating a
political will for social changes to significantly reduce oppression. A vital
belief in a Utopian ideal may be necessary to motivate people to leave on the
journey from the status quo in the first place, even though the likely actual
destination may fall short of the utopian ideal itself. Yet, vague utopian
fantasies may lead us astray, encouraging us to embark on trips that have no
real destinations at all, or worse still, which lead us toward some unforeseen
abyss. Along with "where there is a will there is a way", the human
struggle for emancipation confronts "the road to hell is paved with good
intentions". What we need, then, are "real utopias": utopian
ideals that are grounded in the real potentials of humanity, utopian
destinations that have accessible waystations, utopian designs of institutions
that pay serious attention to social science in ways that can inform our
practical tasks of muddling through in a world of imperfect conditions for
social change.

These goals are especially urgent in the present era. We now live in a world
in which traditional radical visions of social change are often mocked rather
than taken seriously. Along with the post-modernist rejection of "grand
narratives", there is an ideological rejection of grand designs, even by
those still on the left of the political spectrum. This need not mean an
abandonment of deeply egalitarian emancipatory values, but it does reflect a
cynicism about the human capacity to realize those values on a substantial
scale. This cynicism, in turn, weakens progressive political forces in general.
Envisioning real utopias is a way of countering this cynicism.

Real Utopias and Marxism

Talk about "Real Utopias" may seem a little strange coming from a
Marxist sociologist. Marx, after all, was utterly disdainful of utopian
thinking. Socialism, in his view, was not a matter of some moral ideal, but
rather an historical necessity struggled for by workers because it was in their
practical interests. Discussions of utopian possibilities was a distraction, not
an integral part of a social theory of social change.

Let me take a little time here to show how envisioning real utopias fits into
a reconstructed Marxism. After I do this I will illustrate the idea through two
examples, one concerning a real utopian model of income redistribution, and a
second, an analysis of some innovative experiments in empowered participatory
democracy.

First, Marxism. It is useful, I think, to see the Marxist tradition as built
around three clusters of theoretical argument:

1. A theory of the contradictory reproduction of capitalism and its class
   relations

2. A theory of the dynamics and destiny of capitalism.

3. A normative theory of the alternative to capitalism.

The first of these constitutes what might be called Sociological Marxism.
Most of the empirical research done by Marxist-inspired social scientists in the
past couple of decades would fall into this cluster.

The second of these constitutes the core of what is often called historical
materialism. The arguments are pretty familiar. Here the pivotal idea is this:
because of its internal dynamics and contradictions, in the longterm capitalism
undermines its own conditions of sustainability. Call this the fundamental
thesis of the longrun nonsustainability of capitalism. To this could be
added what can be called the instensification of class struggle thesis,
which argues that as capitalism becomes progressively less and less sustainable,
the class forces opposed to capitalism become stronger and their interests
increasingly polarized against capitalism. The combination of internal
self-destructive dynamics plus increasingly powerful anticapitalist opposition
means that the destiny of capitalism is its destruction. This is a strong
prediction -- some might say "prophecy" -- not simply a claim about a
remote possibility. In the aftermath of the demise of capitalism, given the
interests and capacities of the relevant social actors, socialism would be
invented through a process of pragmatic, creative, collective experimentalism
when it became an "historical necessity."

If one believes this theory, then there is little need for an elaborate
normative theory of the alternatives to capitalism. The problem of socialism can
be left to the pragmatic ingenuity of the future. It is for this reason that
Marx believed a positive normative theory was unnecessary. The normative
dimension of Marx’s writing thus primarily took the form of the critique of
capitalism as a social order characterized by alienation, exploitation,
fetishism, mystification, degradation, immiseration, the anarchy of the market
and so on. The transcendence of capitalism by socialism and, eventually,
communism, was then posited as the simple negation of these features, an
implicit and undefended theoretical utopia which simply eliminated all the moral
deficits of capitalism: a society without alienation, exploitation, fetishism,
etc.

If one abandons the optimistic predictions of historical materialism,
however, there is no longer a theoretical grounding for bracketing the normative
issues. After all, we have witnessed several historical experiments of trying to
build socialism in the aftermath of anticapitalist revolutions which relied
heavily on moral visions combined with "where there is a will there is a
way" and "necessity is the parent of invention". The problem, of
course, is that what was invented with this will was not an egalitarian,
democratic organization of production. If we have learned anything from the
history of revolutionary struggles against capitalism it is that anticapitalism
is an insufficient basis on which to construct a socialist alternative. In
addition to a sociological Marxism which explores the contradictory reproduction
of class relations in capitalism we therefore need a normative Marxism that
illuminates the nature of the emancipatory project itself and its institutional
dilemmas. The development of this normative theory is one of the essential tasks
for Marxism in the 21st century.

Let us now look at two specific examples of this kind of thinking which
hopefully will illuminate the project.

Universal Basic Income

The first example is the proposal for Unconditional Universal Basic Income.
The basic idea is quite simple and probably familiar to many of you: Every
citizen receives a monthly living stipend sufficient to live at a
culturally-defined respectable standard of living, say 125% of the "poverty
line." The grant is unconditional on the performance of any labor or
other form of contribution, and it is universal – everyone receives the
grant as a mater of citizenship right. Grants go to individuals, not families.
Parents are the custodians of minority children’s grants.

With universal basic income in place, most other redistributive transfers are
eliminated – general welfare, family allowances, unemployment insurance,
tax-based old age pensions – since the basic income grant is sufficient to
provide everyone a decent subsistence. This means that in welfare systems which
already provide generous anti-poverty income support through a patchwork of
specialized programs, the net increase in costs represented by universal
unconditional basic income would not be extraordinary, particularly since
administrative overhead costs would be so reduced (since universal basic income
system do not require significant information gathering and close monitoring of
the behavior of recipients). Special needs subsidies of various sorts would
continue, for example for people with disabilities, but they are likely to be
smaller than under current arrangements. Minimum wage rules would be relaxed or
eliminated: there would be little need to legally prohibit below-subsistence
wages if all earnings, in effect, generated discretionary income.

Universal basic income has a number of very attractive features from the
point of view of radical egalitarianism. First, it significantly reduces one of
the central coercive aspects of capitalism. When Marxists analyze the process of
"proletarianization of labor" they emphasize the "double
separation" of "free wage labor": workers are separated from the
means of production, and by virtue of this are separated from the means of
subsistence. The conjoining of these two separations is what forces workers to
sell their labor power on a labor market in order to obtain subsistence. In this
sense, proletarianized labor is fundamentally unfree. Unconditional, universal
basic income breaks this identity of separations: workers remain separated from
the means of production (these are still owned by capitalists), but they are no
longer separated from the means of subsistence (this is provided through the
redistributive basic income grant). The decision to work for a wage, therefore,
becomes much more voluntary. Capitalism between consenting adults is much less
objectionable than capitalism between employers and workers with little choice
but to work for wages. By increasing the capacity of workers to refuse
employment, basic income generates a much more egalitarian distribution of real
freedom than ordinary capitalism. As the philosopher Philippe van Parijs has put
it, unconditional basic income is a way of distributing real freedom to all on a
more or less equal basis.

Second, universal basic income is likely to generate greater egalitarianism
within labor markets. If workers are more able to refuse employment, wages for
crummy work are likely to increase relative to wages for highly enjoyable work.
The wage structure in labor markets, therefore, will begin to more
systematically reflect the relative disutility of different kinds of labor
rather than simply the relative scarcity of different kinds of labor power. This
in turn will generate an incentive structure for employers to seek technical
innovations that eliminate unpleasant work. Technical change would therefore not
simply have a labor-saving bias, but a labor-humanising bias.

Third, universal basic income directly and massively eliminates poverty
without creating the pathologies of means-tested antipoverty transfers. There is
no stigmatization, since everyone gets the grant. There is no well-defined
boundary between net beneficiaries and net contributors, since many people and
families will freely move back and forth across this boundary over time. Thus,
it is less likely that stable majority coalitions against redistribution will
form once basic income has been in place for some length of time. There are also
no "poverty traps" caused by threshold effects for eligibility for
transfers. Everyone gets the transfers unconditionally. If you work and earn
wages, the additional income is of course taxed, but the tax rate is progressive
and thus there is no disincentive for a person to enter the labor market if they
want discretionary income.

Fourth, unconditional universal basic income is one way of valorizing a range
of decommodified care-giving activities which are badly provided by markets,
particularly care-giving labor within families, but also care-giving labor
within broader communities. While universal income would not, by itself,
transform the gendered character of such labor, it would counteract some of the
inegalitarian consequences of the fact that such unpaid labor is
characteristically performed by women. In effect, universal basic income could
be considered an indirect mechanism for accomplishing the objective of the
"wages for housework" proposals by some feminists: recognizing that
caregiving work is socially valuable and productive and deserving of financial
support. The effects of basic income on democracy and community are less clear,
but to the extent that basic income facilitates the expansion of unpaid,
voluntary activity of all sorts, this would have the potential of enhancing
democratic participation and solidarity-enhancing activities within communities.

There are, of course, significant questions about the practical feasibility
of universal basic income grants. Two issues are typically raised by skeptics:
the problem of labor supply, and the problem of capital flight.

A universal basic income is only feasible if a sufficient number of people
continue to work for wages with sufficient effort to generate the production and
taxes needed to fund the universal grant. If too many people are happy to live
just on the grant (either because they long to be couch potatoes and or simply
because they have such strong preferences for nonincome-generating activities
over discretionary income) or if the marginal tax rates were so high as
seriously dampen incentives to work, then the whole system would collapse. Let
us define a "sustainable basic income grant" as a level of the grant
which, if it were instituted, would stabley generate a sufficient labor supply
to provide the necessary taxes for the grant. The highest level of such grants,
therefore, could be called the "maximally sustainable basic income
grant." The empirical question, then, is whether this maximally sustainable
level is high enough to provide for the virtuous effects listed above. If the
maximally sustainable grant was 25% of the poverty line, for example, then it
would hardly have the effect of rendering paid labor a noncoercive, voluntary
act, and probably not dramatically reduce poverty. If, on the other hand, the
maximally sustainable grant was 150% of the poverty level, then a universal
basic income would significantly advance the egalitarian normative agenda.
Whether or not this would in fact happen is, of course, a difficult to study
empirical question and depends upon the distribution of work preferences and
productivity in an economy.

Apart from the labor supply problem, universal basic income is also
vulnerable to the problem of capital flight. If a high universal basic income
grant significantly increases the bargaining power labor, and if capital bears a
significant part of the tax burden for funding the grant, and if tight labor
markets dramatically drive up wages and thus costs of production without
commensurate rises in productivity, then it could well be the case that a
universal basic income would precipitate significant disinvestment and capital
flight. It is for this reason that Marxists have traditionally argued that a
real and sustainable deproletarianization labor power is impossible within
capitalism. In effect, the necessary condition for sustainable high-level
universal basic income may be significant politically-imposed constraints over
capital, especially over the flow of investments. Some form of socialism – in
the sense of democratic political control over capital – may thus be a
requirement for a normatively attractive form of basic income. But it may also
be the case that in rich, highly productive capitalism, a reasonably high basic
income could be compatible with capitalist reproduction. Particularly in
generous welfare states, the increased taxes for funding a basic income might
not be excessive, and the technological and infrastructural reasons why capital
invests in developed capitalist economies may mean that massive capital flight
is unlikely. Maybe.

Empowered participatory democracy

The second example concerns the problem of deepening democracy. Democracy is
in many ways an ideal subject for a discussion in the spirit of envisioning real
utopias. After all, the very idea of democracy is a example of real utopian
thinking: democracy means rule by the people. What an extraordinary, radical,
egalitarian ideal: power should be vested in the people, not a hierarchy, not a
king, not an elite, but the people. Of course, defenders of democracy have
always recognized that this ideal requires concrete institutions, and such
institutions will always embody compromises, compromises that reflect the
difficult trade-offs any institution faces between different values. In the case
of democracy, for example, many people have argued for representative democracy
instead of direct, participatory democracy not because representative democracy
is the perfect embodiment of democratic ideals but because it is pragmatically
the best compromise between values of democracy on the one hand and various
other values, such as efficiency or the right of individuals to devote most of
their time and energy to private rather than public concerns.

But why do we need a real utopian discussion of democracy? For many people it
may seem obvious that representative democracy – the institutions that we
currently have in place – as good as we can do. Perhaps they need some
tinkering – campaign finance reform, more public debates among candidates,
rules that make third parties more viable – but given the complexity of the
society in which we live, most people – and most scholars of the subject –
believe that there is no alternative to representative democracy.

I believe that there is urgency to this topic, not simply because I believe
we can do better – that democracy can be enhanced beyond the constraints of
existing institutions – but because our current institutions themselves are
becoming less satisfactory for dealing with the problems we face. As the tasks
of the state have become more complex and the size of polities larger and more
heterogeneous, the institutional forms of liberal democracy developed in the
nineteenth century — representative democracy plus techno-bureaucratic
administration — seem increasingly ill-suited to the novel problems we face in
the twenty-first century.

The Right of the political spectrum has taken advantage of this apparent
decline in the effectiveness of democratic institutions to escalate its attack
on the very idea of the affirmative state. The only way the state can play a
competent and constructive role, the Right typically argues, is to dramatically
reduce the scope and depth of its activities. In addition to the traditional
moral opposition of libertarians to the activist state on the grounds that it
infringes on property rights and individual autonomy, it is now widely argued
that the affirmative state has simply become too costly and inefficient. The
benefits supposedly provided by the state are myths; the costs—both in terms
of the resources directly absorbed by the state and of indirect negative effects
on economic growth and efficiency—are real and increasing. Rather than seeking
to deepen the democratic character of politics in response to these concerns,
the thrust of much political energy in the developed industrial democracies in
recent years has been to reduce the role of politics altogether. Deregulation,
privatization, reduction of social services, and curtailments of state spending
have been the watchwords, rather that participation, greater responsiveness,
more creative and effective forms of democratic state intervention. As the
slogan goes: "The state is the problem, not the solution."

In the past, the political Left in capitalist democracies vigorously defended
the affirmative state against these kinds of arguments. In its most radical
form, revolutionary socialists argued that public ownership of the principle
means of production combined with centralized state planning offered the best
hope for a just, humane, democratic and egalitarian society. But even those on
the Left who rejected revolutionary visions of ruptures with capitalism insisted
that an activist state was essential to counteract a host of negative effects
generated by the dynamics of capitalist economies -- poverty, unemployment,
increasing inequality, under-provision of public goods like training and public
health. These defenses of the affirmative state have become noticeably weaker in
recent years, both in their rhetorical force and in their practical political
capacity to mobilize people. Although the Left has not come to accept
unregulated markets and a minimal state as morally desirable or economically
efficient, it is much less certain that the institutions it defended in the past
can achieve social justice and economic well being in the present.

Perhaps this erosion of democratic vitality is an inevitable result of
complexity and size. Perhaps the most we can hope for is to have some kind of
limited popular constraint on the activities of government through regular,
weakly competitive elections. Perhaps the era of the "affirmative
democratic state" -- the state which plays a creative and active role in
solving problems in response to popular demands -- is over, and a retreat to
privatism and political passivity is the unavoidable price of
"progress". But perhaps the problem has more to do with the specific
design of our institutions than with the tasks they face as such. If so, then a
fundamental challenge for progressives is to develop transformative democratic
strategies that can advance our traditional values — egalitarian social
justice, individual liberty combined with popular control over collective
decisions, community and solidarity, and the flourishing of individuals in ways
which enable them to realize their potentials.

One such proposal can be called "empowered participatory
governance". There are many elements which go into this institutional
model, but two seem especially important: the ideal of participatory
empowerment and the ideal of deliberative governance. First, participatory
empowerment: In a representative democracy, ordinary citizens are involved
in politics only to the extent that they chose decision makers -- their
representatives -- through elections and voice their opinions through various
channels of communication. The ideal of empowered participatory governance
involves ordinary citizens directly in the problem-solving arenas through which
public decisions are made. This is therefore a form of direct democracy, or what
is sometimes called participatory democracy.

Second deliberation: In a conventional liberal democracy, the basic
idea is that political decisions are the result of majority rule, where
majorities are constructed through various complex processes of mobilization of
support and bargaining. Bargaining involves compromises, and through such
compromises conflicts of interests may be resolved, but the bottom line is that
the majority rules by exercising power. The deliberative democratic ideal, in
contrast, emphasizes the problem of consensus formation through public
dialogue rather than power-based bargaining. Conflicts are resolved more through
creative problem-solving in which there is transformation of interests of the
participants than through mobilization of power resources.

In a nutshell, therefore, the question is this: Can institutions be designed
in such a way that ordinary citizens are empowered to directly engage in
deliberative problem-solving and decision-making over important policy matters?
The model of empowered participatory governance is an attempt at charting out
the parameters of such institutional design.

There are good reasons to be skeptical about a proposal like this. After all,
we live in a society deeply divided by inequalities of wealth and income, a
society in which racial divisions remain acute, where powerful corporations
exert tremendous influence on politics. The conflicts of interests structured by
these divisions are real, not imaginary. How is it possible to imagine a
democratic process of genuine consensus formation in the face of such
inequalities? And how often have we heard calls for harmony, for team work, for
win-win solutions to problems that are really ruses for protecting privilege and
power. Perhaps empowered participatory governance is just another illusion, a
new form of window dressing behind which the rich and powerful will continue to
call the shots where it counts.

Perhaps. But perhaps not. Perhaps the system has more cracks and fissures in
it, more social spaces within which new institutions can be built. An
interesting empirical example may help to give more credibility to this general
idea.

In the city of Porto Alegre, Brazil, a dramatic democratic innovation in city
government was introduced in the late 1980s. Here is the basic story. In 1988
the PT won the mayoral election but did not control the city council. They
therefore faced the problem that their budget priorities – massive redirection
of city spending to the most disadvantaged parts of the city – were likely to
get mucked up in the city council. The solution was a kind of dual power idea:
instead of compiling a budget in the Mayor’s technical planning office, the PT
divided the city into 17 regions each of which had a direct, participatory
budget assembly. The city as a whole has about 1.5 million people, so this means
roughly regions of about 100,000 residents.

Each assembly first meets in March each year, the beginning of the budget
planning cycle. Any resident of the region can attend the assembly and vote on
its proposals. At this first meeting a regional council of delegates is chosen
in the assembly, with one delegate for roughly every 25 people at the meeting.
This means that mobilized groups have an advantage – they can bring their
members to the meeting and get their people as delegates on this delegate
council. (One of the consequences – incidentally – has been the considerable
growth of vibrant secondary associations in civil society in Porto Alegre.).
This delegate council then meets weekly for three months in different
neighborhoods, hearing petitions, discussions of proposals ranging from day care
centers to pot hole repairs and working out a regional budget priority document.
In June this document is voted on – in a largely ceremonial event – at a
second plenary meeting of the regional assembly. At this meeting two delegates
are selected for a city wide budget council which then meets for six months to
reconcile the budgets from every region. It is at this point that city
technocrats enter the game in a serious way, providing numbers, evaluating
feasibility, etc. By November a final budget document is submitted to the Mayor
who then submits it to the city council where – so far – it has been rubber
stamped each year. One other interesting detail: there are seven city-wide
thematic regions on things like culture, sports and leisure, transportation.
These were introduced in part to deal with middle class dissatisfaction at the
process, in which their priorities tended to be marginalized, but also in
recognition that some budgetary issues were not easily disaggregated to a
regional level.

How can we evaluate this experiment? A number of indicators suggest that this
is a serious institutional experiment in deepening participatory democracy:

1. there has been a massive shift in spending towards the poorest regions of
   the city. As one would predict in a deliberative process where reasons and
   needs rather than power play the central role in allocations, the neediest
   parts of the city have gotten the most funding.

2. participation levels of citizens in the process have been high and
   sustained. In the 1997 cycle about 8% of the adult population participated
   in at least one meeting.

3. the vote for the PT has increased in each election, indicating that this
   process has generated high levels of legitimation. In the last election, for
   the first time, they won the state level Governor’s office as well.

4. The right has been unable to demonstrate any corruption in the process,
   in spite of considerable efforts at doing so.

5. there are some indications that tax compliance has increased even though
   tax surveillance and enforcement has not really changed, suggesting that the
   democratic legitimacy may have begun to affect norms of civic responsibility
   and obligation.

Porto Alegre is not the only instance of attempts at deepening democracy
through innovative forms of empowered participation. Briefly, two other examples
are worth mentioning here: habitat conservation councils, and new forms of
community policing councils.

Habitat Conservation. Efforts are being made to create forms of
empowered participatory governance in a number of settings of environmental
regulation. In particular, in the formulation and monitoring of habitat
conservation plans to protect endangered species experiments are underway in the
United States to create habitat councils embodying some elements of this kind of
model. This is an interesting case. The Endangered Species Act in the United
States has traditionally been enforced through a zero development policy for
habitats that are designated as the protected habitat for an endangered species.
This has a number of undesirable consequences: 1. it enormously raises the
stakes in battles of designating a particular creature as an endangered species
– developers oppose every move. 2. Once a species is on the list, the
government agency involved in enforcing the act is under great pressure to
minimize the area of the protected habitat which often turns out to be
sub-optimal for the species concerned. But zero-growth has one big advantage: it
is easily monitored. In an setting of severe mistrust and antagonism between
environmentalists and developers, it seems like the surest solution. But both
environmentalists and developers would have their interests better served if
limited development were allowed, since carefully designed but limited
development would be compatible with species preservation and would lower the
opposition to putting species on the list and make it possible to extend the
boundaries of protected habitats. The problem, then, is how to design those more
complex rules and enforce them. Participatory Habitat Conservation councils is
one experiment to solve this problem.

Community Policing. Chicago some recent innovation in community
policing also have this character. Police Beat councils have been created in
each of the 270 or so beats in Chicago. At these councils any resident of the
beat area can participate a deliberate about policing priorities for that beat.
The police then must report back to the council on a monthly basis to give an
account of what they have done with respect to these priorities. Perhaps this is
window dressing, a new form of co-optation of opposition; but there is evidence
that at least in some of the beats in the poorest areas of Chicago this has lead
to significant levels of active neighborhood involvement in the on-the-ground
practices of the police.

Principles of Empowered Participatory Governance

These experiments in deepening democracy differ in many respects, but
underlying them is a kind of implicit institutional model. This model is based
on what might be termed three process principles and three institutional design
principles:

Process Principle 1. Bottom-up empowered participation: Participation
in EPG institutions does not just give people a way of expressing their views on
matters of public concern, but involves real popular empowerment – actual
decision-making powers significantly involving direct participation. In the
familiar institutions of representative democracy, ordinary citizens are
involved in politics only to the extent that they chose decision makers –
their representatives – through elections and voice their opinions through
various channels of communication. The ideal of empowered participatory
governance involves ordinary citizens directly in the deliberations and
problem-solving through which decisions are made.

Process Principle 2. Pragmatic orientation. At the center of
political decision-making in EPG institutions is what might be termed a
pragmatic orientation towards concrete problem-solving. The idea is to bring
people to the political table who share a common interest in accomplishing
certain concrete, practical goals – in solving practical problems – even if
they also have significant conflicts of interests outside of the immediate
problem-solving agenda. This may mean that certain issues are "off the
table" because they are not tractable to such a practical orientation, and
this in turn may mean that the pragmatic orientation deflects political energy
away from more radical challenges to inequalities of privilege and power. But
the idea is that pragmatic solutions to real problems are often possible in
spite of these broader conflicts and inequalities, and further, that in the long
run empowering people to deal with concrete problems can set the stage for more
profound reconfigurations of power.

Process Principle 3. Deliberative solution generation: Within EPG
decisions are made in a way that gives a significant role for active
deliberation rather than simply bargaining, strategic maneuvering, logrolling,
and so forth. In a conventional liberal democracy, the basic idea is that
political decisions are the result of majority rule, where majorities are
constructed through various complex processes of mobilization of support and
bargaining. Bargaining involves compromises, and through such compromises
conflicts of interests may be resolved, but the bottom line is that the majority
rules by exercising power. The deliberative democratic ideal, in contrast,
emphasizes the problem of consensus formation through public dialogue
rather than power-based bargaining. Conflicts are resolved more through creative
problem-solving in which there is transformation of interests of the
participants than through mobilization of power resources.

Design Principle 1. Devolution. Since empowered participatory
governance targets problems and solicits participation localized in both issue
and geographic space, its institutional reality requires the commensurate
reorganization of the state apparatus. It entails the administrative and
political devolution of power to local action units – such as neighborhood
councils, personnel in individual workplaces, and delineated eco-system habitats
– charged with devising and implementing solutions and held accountable to
performance criteria. These bodies are not merely advisory bodies, but rather
creatures of a transformed state endowed with substantial public authority to
act on the results of their deliberation. Decision-making is moved downward to
the locus of problems as much as possible.

Design Principle 2. Centrally coordinated decentralization. Though
they enjoy substantial power and discretion, local units do not operate as
autonomous, atomized sites of decisionmaking in empowered participatory
governance. Instead the institutional design involves linkages of accountability
and communication that connect local units to superordinate bodies. These
central offices can reinforce the quality of local democratic deliberation and
problem-solving in variety of ways: coordinating and distributing resources,
solving problems that local units cannot address by themselves, rectifying
pathological or incompetent decision-making in failing groups, and diffusing
innovations and learning across boundaries.

Unlike New Left political models in which concerns for liberation lead to
demands for autonomous decentralization, empowered participatory
governance suggests new forms of coordinated decentralization. Driven by the
pragmatic imperative to find solutions that work, these new models reject both
democratic centralism and strict decentralization as unworkable. The rigidity of
the former leads it too often to disrespect local circumstance and intelligence
and as a result it has a hard time learning from experience. Uncoordinated
decentralization, on the other hand, isolates citizens into small units, surely
a foolhardy measure for those who don’t know how to solve a problem but
suspect that others, somewhere else, do. Thus these reforms attempt to construct
connections that spread information between local units and hold them
accountable.

Design Principle 3. State-centered institutionalization. A third
design characteristic of these experiments is that they colonize state power and
transform formal governance institutions. Many spontaneous activist efforts in
areas like neighborhood revitalization, environmental activism, local economic
development, and worker health and safety seek to influence state outcomes
through outside pressure, but they leave intact the basic institutions of state
governance. By contrast, EPG reforms attempt to remake official institutions.
These experiments are thus in a sense less "radical" than most
varieties of activist self-help in that their central activity is not
"fighting the power." But they are more radical in that they have
larger reform scopes, are authorized by state or corporate bodies to make
substantial decisions, and, most crucially, try to change the central procedures
of power rather than merely attempting occasionally to shift the vector of its
exercise. These transformations attempt to institutionalize the on-going
participation of ordinary citizens, most often in their role as consumers of
public goods, in the direct determination of what those goods are and how they
should be best provided. This perpetual participation stands in contrast, for
example, to the relatively brief democratic moments in both outcome-oriented,
campaign-based social movements and electoral competitions in ordinary politics
in which leaders/elites mobilize popular participation for specific outcomes. If
popular pressure becomes sufficient to implement some favored policy or elected
candidate, the moment of broad participation usually ends; subsequent
legislation, policy-making, and implementation then occurs in the largely
isolated state sphere. In EPG the goal is create durable institutions of
sustainable empowered participation of ordinary citizens in the activities of
the state rather than simply episodic changes in the policies of the state.

Conclusion

Both basic income and empowered participatory governance – and other kinds
of proposals which we could discuss – in various ways challenge the prevailing
idea that there are no alternatives to capitalism and representative democracy
as we know them. If people generally believed that capitalism was inevitably
doomed within their lifetimes, then this itself would undercut the notion that
there was no alternative. But if this belief is dropped, then articulating
alternatives is a necessary condition for putting alternatives on the historical
agenda.

Envisioning real utopias, however, is meant to be more than just an
ideological ploy for challenging fatalism. Because of the contradictory quality
of social reproduction in capitalist societies, it is possible that under
certain political conditions aspects of these institutional designs can become
part of pragmatic projects of social reform even within capitalist society, as
shown in the Porto Alegre case. There are many possible capitalisms with many
different institutional arrangements for social reproduction. One crucial issue
for people morally committed to a radical egalitarian and democratic notion of
social justice is the extent to which it is possible to introduce and sustain
significant aspects of emancipatory institutional arrangements in some varieties
of capitalism. Although the constraints of power and privilege in existing
capitalism necessarily make any emancipatory project within capitalism
difficult, this does not imply that elements of emancipatory alternatives cannot
be prefigured within the contradictory reality of capitalism itself. Envisioning
Real Utopias is thus, ultimately, part of an active agenda of social change
within capitalism rather than simply a new vision of a destiny beyond
capitalism.

ARTICLE 7

The new global economy

This is an extract from the keynote address to the 27th Convention of the
Communist Party of the United States of America (CPUSA) delivered by Sam Webb,
the CPUSA’s National Chairperson. The SACP General Secretary, Blade Nzimande,
represented the SACP in this Convention which was held in July.

It wasn`t that long ago that the apologists of capitalism extolled, with a
zeal almost worthy of an evangelical preacher, the good news of the "new
economy."

Thanks to the revolution in information, communications, and transportation,
we were told, the days of rising prices, slow growth, and cyclical downturns
that plagued the US economy in earlier times were a thing of the past.

Indeed, out of the ashes of the old economy, a "new economy," it
was said, had arisen. And apparently by magic, for no one was able to offer a
plausible explanation for this new phenomenon.

In this "new economy," a long-term productivity slowdown and
unemployment were both vanquished, inflation was tamed, and nasty cyclical ups
and downs were overcome.

The soaring of stock and bond prices to unheard of levels was seen as the
most obvious sign that US capitalism had entered an era of nearly limitless
possibilities. Any concerns about speculative excess and bubbles on Wall St.
were patronizingly dismissed as the tired views of some outworn thinker,
hopelessly stuck in an earlier period.

The only flaw with all this is that eventually reality asserted itself. The
economic laws of motion of capitalist society, which Marx so brilliantly
uncovered long ago, rained on the parade of the "new economy" and
dot-com crowd.

Boom gave way to slowdown. Investment in hi-tech and manufacturing dried up.
Profit expectations dimmed. Unemployment began to creep up. And, the consumer
price index that measures inflation was traveling north, while the stock market
was plunging southward. By the time the market reached a point of unstable
equilibrium a trillion dollars of value had been lost. Don`t you feel for these
Internet billionaires and multi-millionaires!

But this precipitous fall of stock prices is more than a passive mirror of a
faltering economy. It measurably aggravates the economic crisis. Just as the
debt-driven financial bubble on Wall Street was a major stimulant to the longest
expansion in this century, the bursting of the bubble will considerably worsen
the economy`s slide on the downside of the economic cycle.

How bad will economic conditions get? We don`t know exactly. But we do know
that they continue to worsen as we speak. The establishment media would like us
to believe that the cyclical downturn is only a momentary blip in an otherwise
healthy economy. But this is an instance of the wish getting far ahead of the
reality.

A recent issue of The Economist quotes Lawrence Summers saying that the
present day economic cycle will more likely mirror the cyclical patterns of the
pre rather than the post-World War II world. In other words, the downturns may
well be longer and steeper.

The present weakness in our economy, moreover, coincides with a slowdown in
the world economy and an energy crisis. Both could worsen the economic situation
in this country considerably, particularly if war breaks out in the Middle East.
More and more, capitalism is an integrated world economic system, thereby
bringing about a closer synchronization of economic crises on a global level.

The unfolding economic crisis combined with the right wing anti-democratic
offensive will bring enormous economic hardship to tens of millions, and
especially working class and minority women, racially and nationally oppressed
people, and immigrant workers.

Making matters worse, many forms of relief have been eliminated during the
last decade. Consequently, the grimmest features of a capitalist economic crisis
- homelessness, hunger, dire poverty, family crises - will reappear on a much
broader scale. Elementary survival will be a daily concern of millions of
people.

What kind of White House and Congress allows tens of millions of people to go
to bed hungry at night? No person and especially no child should be ill fed, ill
housed, ill clothed, ill schooled and ill cared for. Do you agree? Clearly, we
can`t wait for the crisis to worsen before we act. We must respond now, take
initiatives now, join with others now, and struggle now.

The global economy

Notwithstanding the claims of its proponents, economic globalisation is
accompanied by fierce exploitation, economic instability, and crises. In its
wake, problems of vast dimensions have arisen - AIDS, poverty, hunger, debt
bondage, labor migration, global warming, marginalisation of whole regions and
continents, and the heightening of national and racial oppression.

Consider for a moment the AIDS crisis. In Africa alone, 17 million men,
women, and children have died and another 25 million are infected with the HIV
virus. One would think that given the deadly and devastating impact of this
killer disease that the world community would respond on an emergency basis.

But that hasn`t happened. So the question is why? Suffice it to say that the
AIDS crisis in Africa and elsewhere is not only a health problem, but also a
problem of political economy, a problem of racist oppression, a problem of
capitalist globalisation, and a problem of imperialism`s utter inhumanity. This
convention should strongly condemn the Bush administration for the meager
resources that it has pledged to the AIDS crisis.

The contemporary global economy is not an arena of freedom and free exchange,
but rather of coercion and unequal power with a few nations and powerful
transnational corporations, like General Electric, Microsoft, and Citicorp,
sitting at the top and the vast majority of nations and people struggling for
survival.

Despite all the hype about the magic of the market, the structure of the
global economy is not the outcome of some inevitable, seamless and pure economic
process. Instead, it is fraught with contradiction: winners and losers; crises
and struggles, all of which have a bearing on the overall trajectory of economic
globalisation.

In fact, the evolution of the global economy is as much a political process
as an economic one. Capitalism follows general laws of development to be sure,
but these laws operate in a particular political and economic context and are
modified to one degree or another by the particular distribution of political
and economic power among competing classes.

We would make a huge mistake if we neatly separated the economic substructure
of the global economy from the politics of capitalist globalisation. The
transnational corporations, which are the main structural underpinning of the
global economy, don`t walk up to a line separating economics from politics and
say, "We can`t go any further; politics is for others."

To the contrary, they control and utilize the state apparatus and
supranational organisations like the International Monetary Fund - not to
mention their own economic might - to structure the objective process of
economic internationalisation in their own selfish interests.

In fact, the pronounced tendency in the political sphere toward reaction,
fiscal discipline, and violence in our own country is closely connected to the
needs and pressures of a global economy dominated by huge concentrations of
economic power. It`s not small town and rural America, but rather the most
reactionary sections of capital that are the architect and driving force behind
the lean and aggressive role of the state.

Moreover, with the collapse of the Soviet Union a decade ago, there is no
counterweight to the aggressive tendencies of US imperialism. Feeling
unrestrained and triumphant, US imperialism let its dogs out. Somewhat to the
surprise of the U.S. ruling class, however, a powerful protest movement has
arisen in response to this new global configuration of political and economic
power. This new movement has no single center. It is multi-layered and contains
many political tendencies. Its demands and forms of struggle are wide-ranging
and radical. And it is developing somewhat spontaneously, which has both
positive and negative aspects to it.

Nearly all the currents in this movement see the transnational corporations
and supranational organisations as the main cause of the crises associated with
globalisation. Some go further and point to the system of capitalism itself.

There is no shortage of issues around which millions can be mobilised.
Blocking the Free Trade of the Americas Agreement, making child and sweat shop
labor illegal, protecting the world`s rain forests and food supply, defending
the land and cultural rights of indigenous peoples, abolishing the debt of the
developing countries, and de-militarizing the border between Mexico and the US
are a few of the issues that draw people into struggle.

We should have a very positive attitude toward this tremendous new movement
and find ways to raise the level of our involvement. Our experience as well as
our understanding of the nature of capitalism should allow us to make an
important contribution to it.

Economic transition

To look for a historical parallel to present-day developments, we might go
back to the turn of the last century, when our country was going though an
economic transition much like it is today. At that time, the changeover was from
locally and regionally organised markets to a nationally integrated economy.

At the center of this process was a new economic actor – powerful
corporations that were able to dominate whole lines of industry and consolidate
heretofore disjointed local markets. It was the age of the robber barons, of
Rockefeller, Carnegie, and Morgan.

Facilitating this process were technological breakthroughs in manufacturing,
communications, and transportation. Of these technologies the most notable was
the railroad, which made possible the transporting of goods from distant sites
to consumer markets.

This restructuring of the economy brought in its train enormous dislocation
and hardship for millions of working people, farmers, and other class strata. A
way of life for tens of millions was forever destroyed. And out of this
wrenching experience grew a powerful people`s movement to challenge the growing
control of the economy by these new corporate trusts.

Today, we are in another transition, from a nationally integrated economy to
a globally integrated one. Like a century ago, a new economic actor - the
transnational corporations - is the main economic form organizing this
transition. New technologies are facilitating the process. It is happening in an
incredibly short space of time, and an old way of life is disappearing. And
again in response, a labor led coalition has emerged - this time to challenge
the transnational corporations and the global institutions that they control.

In both instances, the transition was driven by the core characteristics and
deep structures of capitalist exploitation. At the same time, there are
differences between the earlier transition and the current one. The scale of the
previous transition was national while the current one is global. The corporate
form structuring the transitions is different. The contemporary working class is
bigger and more diverse than its predecessor. New social movements have arisen
in recent years that didn`t exist one hundred years ago. And the level of
development of the productive forces and productive technique is vastly
different in the present transition.

Thus we find both continuity and change in this historical process. Our
emphasis in studying economic processes, however, should be on what it new and
changing. We should not lose sight of the underlying processes from which the
new emerges, but in striking a balance between continuity and change, our accent
should be on what is changing. And the reason is simple: Changes in the
productive forces and relations alter the terrain of the class struggle.

It is sometimes said that capitalism has always been a global system, so
what`s the big fuss about globalisation. It`s just the "same ole, same
ole." Yes, capitalism has always been a global system, but not in the same
way, not to the same degree, and not with the same effects. It changes and moves
through different phases of development. And without taking into account the
specific features that distinguish one period of capitalist development from
another, we will unable to project strategic and tactical concepts of struggle.

In the early 20th century, as a reaction to the transition to a nationally
integrated economy, the populist and reform movements constructed a mechanism
with rules, regulations, and institutions whose function was to restrain the
power of the corporate beasts of that time. Today`s anti-globalisation movement
is faced with a similar challenge. But in this instance, the regulatory rules
and institutions to harness transnational corporate power have to be fitted to
the present-day concrete circumstances. For example, can the global economy be
brought under social control without reversing the pronounced trend toward
financial de-regulation and liberalization? Doesn`t finance capital have to be
brought to its knees in order to mitigate, let alone eliminate, the harsh
effects of globalisation? If the answer is yes, then social control over capital
movements has to be one of the core elements of any alternative program to
capitalist globalisation. Of course, there will be other elements, including new
forms of international working class unity. But without radically curbing the
power of transnational corporations and banks, any new regulatory regime will
lack teeth.

Political situation

Comrades, the Bush administration and the extreme right are utilising their
domination of the federal structure to try to turn back the clock. And they are
doing it at reckless speed.

On the world stage, their policies are militarist, unilateralist, and
interventionist. There is literally no region of the world where you can`t see
the particularly aggressive hand of the Bush administration. Whether it`s
provoking China, the Koreas, and Vietnam, or giving a green light to the
anti-Cuban lobby in the Senate or continuing the Colombia Plan, or hosting
murderers like Ariel Sharon in the White House, or demanding the extension of
NATO to the borders of Russia, or manipulating the War Tribunals Court to
illegally indict Slobodan Milosevic or resuming the bombing of Vieques, or
trying to undermine the Venezuelan government of Hugo Chavez, or trashing the
Kyoto global warming protocol, or twisting allies` arms to support the US
abrogation of the ABM treaty, the Bush administration is pursuing a foreign
policy course that is a more dangerous expression of US imperialism than of its
predecessor.

But the world will not be bullied. And among the American people there is
unease with Bush`s foreign policy. However we should quickly note that shifting
sentiments alone are not enough.

During most of the Clinton years, mass actions against US interventionist
policies were rare and that continues to be true today. We need to ask why this
is so.

Equally important, this convention has to insist that the entire Party give
new attention to the struggle for peace and solidarity. The fight for peace has
to become a concern of every member and collective. U.S. imperialism is the lone
super power in the world. Therefore a special responsibility falls on the
American people to curb the war drive of the Bush administration. Such a
movement should also strive to radically redirect our nation`s economy and
federal resources to peacetime production and human needs. We should be part of
this movement.

In this struggle the US peace movement must join peace forces worldwide. Even
among US allies in Europe, there are points of tension that can be utilised to
stay the aggressive actions of the Pentagon war machine. In the last century
countless millions were sent to death by the war machines of the imperialist
states. Many of us in this hall lost a relative or dear friend in one or another
of these senseless slaughters. Isn`t it time that we as a people say that we`re
going to turn our nation`s swords into plowshares and study war no more? Isn`t
it time to reject the hollow and hypocritical claims of US imperialism that its
interventionist actions around the world are motivated by human rights and
humanitarian concerns? Isn`t it time that our nation becomes a beacon of peace?
Can this convention make such a resolve?

This convention and what we do following it can make history. Seventy years
ago our country and its working class was staring a depression in the face and
Hitler`s hordes were on the verge of seizing power in Germany.

These events presented an awesome responsibility to our Party, not to mention
the world movement. Either we could adjust our policies and meet the challenge
head on or we could travel down the road of political irrelevance. As we know,
we chose the former path and in doing so dramatically gained in size and
influence.

Today circumstances are different, but our country is at a crossroads again.
And a choice has to be made. Either we join with millions in the struggle
against the extreme right and its transnational backers, or we shrink from the
challenge at hand. I`m confident that the 27th convention will choose to fight
the right and in doing so greatly enlarge the size and influence of our glorious
Party. It takes a fight to win! An injury to one is an injury to all! Si se
puede!

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