The Left and the Nationalisation Debate: Shape it, Don’t Sidestep it

by Aug 25, 2010Nationalisation of Mines, Special Features

By Brian Ashley

Regardless of the ANC Youth League’s (ANCYL) intentions or twists and turns, they have nevertheless successfully put the issue of nationalisation on the public agenda. And it is not going away. Furthermore, the fact that some unions also have raised the nationalisation of the Reserve Bank, SASOL, Mittal and other industries has widened the scope of the debate from mining to nationalisation of the heights of the economy.

The issue of nationalisation raises in itself questions regarding economic policy, immediate solutions to pressing problems affecting health, unemployment, redistribution of wealth and the possibility of solutions that go beyond capitalism. For this reason alone, the left should welcome a debate on nationalisation. It should not be seen as a diversion from more pressing debates, as some in the SACP suggest.

The global crisis and the failure of existing capitalism compel us to widen our horizons to anti-capitalist solutions. Marx has made a comeback during the global recession – for good reason. Not only because of his insights into the nature, causes and effects of periodic capitalist crisis, but also for the far-reaching measures he proposed to overcome capitalism and bring into existence a socially just, sustainable and democratic society.

Many kinds of Nationalisations

We must recall that the Youth League started this debate at the height of the global financial crisis, when the US government and other capitalist states began nationalising parts of their financial and auto sectors as a means to stave off the immediate effects of the crisis. Nationalisation has in fact a long history of being a part of saving the capitalist system from itself or simply building it on a firmer ground. Most of the nationalised industries, known as parastatals, Eskom, Iskor (privatised as Mittal), Sasol (privatised), Transnet, and Armskor, were established by the state in the 1900s to aid the development of the mining industry, solve the poor white question and overcome SA’s underdevelopment. In that way, the National Party, albeit for the white population, played a similar role to many post-independent regimes in Africa, Asia and Latin America that used nationalisation as a means of shaking off foreign domination, promoting industrialisation and self-determination. Different class alliances drove this policy. Although most vociferously championed by sections of the working class, which saw in nationalisation job creation through industrialisation, the middle classes and the incipient local capitalist class saw possibilities for growth and accumulation. Nationalised industries created space for the development of downstream economic activities and higher levels of economic growth. Nationalisation, as part of ANC policy, was similarly related to overcoming the poverty and inequality affecting the black majority.

Nationalisation was also been used as a measure for radical reform under capitalism. The nationalisation of hospitals and the whole healthcare system in many European countries is one example. The building of a state-owned education system in the Scandinavian countries, from primary schools to universities, is another. Very often these reforms were forced on the ruling class under pressure from the workers movement and as part of anticapitalist or anti-imperialist struggles. The nationalisation of the oil and other industries in Venezuela, Bolivia and other radical Latin American regimes should be understood in this light.

Nationalisation vs. Socialisation

Nationalisation is also correctly associated with the struggle for socialism. It was a major means of taking possession of the productive wealth of the country in order to reconstruct the economy to meet the needs of the dispossessed majority. This was seen as the first necessary step in the course of building socialism.

Such a situation can be distinguished from state capitalism, in which many parts of industry have been nationalised but with the aim of accumulating capital, leaving democracy and the real needs of the people outside the equation. Present-day China, with its state-backed companies being very active investors in Africa, is a good example of present day state capitalism.

All these variants of nationalisations stand in contrast to socialisation raised by the SACP in criticism of the ANCYL’s call for nationalisation. Even in post-capitalist societies, nationalisation is not the same as the socialisation of the means of production. Socialisation comes in to being with workers control, self-management and the disappearance of the state under conditions of the “free association of producers”.

The failure to redistribute wealth

This debate has continued in spite of efforts to get it off the public agenda. This is largely because of the failure of the post-apartheid transition, especially economic policy, to address inequality – SA has subsequently become the most unequal country in the world.

It also arises with the failure of Black Economic Empowerment to redistribute wealth and economic power. At the current pace it would take hundreds of years to build a significant black capitalist class and deracialise the economy. Widespread corruption, nepotism, scandalous salaries, and the looting of state funds through the procurement of state tenders is rooted in the practical impossibility within South Africa’s monopolised economy of achieving capital accumulation for new entrants without the direct aid of the state or the largesse of big corporations.

When 70% of our population have an income of less than R1 000 per month, when we have over 40% unemployment, a declining life-expectancy rate, and increasing child and maternal mortality rates, when more than 2 million households still have no basic shelter and ongoing protests around the provision of essential services – then the issue of redistribution of wealth, not capitalist growth, should receive the greatest priority and attention.

The radical redistribution of wealth cannot be postponed or caricatured as “fashioning an elaborate blue-print for some distant future”. This response from Jeremy Cronin, quoting Marx, fails to seize the opportunity to advance a radical perspective for redistribution of the wealth in SA. What are the possible forms of wealth redistribution which we could imagine, other than nationalising the heights of the economy as envisaged by the Freedom Charter and confirmed by Nelson Mandela on being released from prison 20 years ago? Budget reprioritisation? National Health Insurance Scheme? Increased taxation on the corporations, Basic Income Grant, guaranteeing the right to work, a living wage, public works programmes that put the unemployed to work building houses, decent public transport, and the other social infrastructures needed to overcome apartheid’s legacy?

Securing radical reforms

All these are required to reverse mass pauperisation. But these measures cannot be secured without the productive wealth of the country being available to the state. To provide ARVs and other expensive drugs to all who need them, without using up the entire budget of the health department, we need state-run pharmaceutical companies. It is also possible to argue the immediate relevance of nationalisation from the negative consequences for the economy and for employment of the dismal failure of privatisation in such cases as Telkom, Iscor (now Mittal) etc. Equally, terrible social consequences have followed from the privatisation, outsourcing and corporatisation of municipal services. Billions of Rands have been squandered in using private contractors to deliver RDP houses, who, in their efforts to maximise their profits, provide shoddy houses that often have to be repaired at the expense of the state.

Nationalisation of “the mines, banks and monopoly industries” cannot be avoided if the health, education, housing, land and agrarian needs of the mass of South Africans are yet to be addressed.

Is this utopian ultra-leftism? Attempting to secure a better life for all without resorting to nationalisation is probably more utopian.

It does not matter if the real motivation of the ANCYL is to bail out our BEE mining interests or even state capitalism. The task of the left is to enter this debate from the point of problematising the failure of the current regime to develop real programmes for redistribution instead of trapping the majority into a trickle-down illusion.

The debate on nationalisation brings back into focus the transformative economic policy proposals made by the democratic movement at the time of the transition. These proposals were sidelined in the haste of the Mbeki, Manual and Mboweni cabal for power. Big business and the NP government extracted these concessions in the negotiated process. The structural problems of the South African economy, which have largely been left unaltered since the end of apartheid. We have seen repeated currency crashes, the rise in mass unemployment to double what it was in 1995, SA becoming a net exporter of capital and financial speculation becoming the main economic activity and space for profit making. This makes the need for greater state control over the economy urgent.

Struggling for an Alternative

Rampant corruption, ineff iciency, looting of the public purse by tenderpreneurs should not lead to the throwing out of the nationalisation baby with the bathwater – as the ideologues of big business argue. For nationalisation to be effective in addressing the needs of the majority it must be accompanied by the democratic control and self-management of nationalised industries.

Nationalisation can or will not be implemented tomorrow. But this debate concentrates our minds on the struggle for an alternative. Such a struggle must be waged in society, at the factories, in the communities, schools and universities, as well as in parliament. And it should not be postponed to some distant future.

If we do not want a phony nationalisation that ends up securing the incomes of those who today flock around the state apparatus, it is crucial to deepen the debate on nationalisation. Counter-posing socialisation with nationalisation strengthens the argument of those who do not want the redistribution of wealth. Invoking Marx’s idea that “every step of real movement is more important than a dozen programmes” is instructive to those who say that nationalisation must be opposed because it is not radical enough, and who say “we need the maximum programme – socialisation”.

The debate on nationalisation puts those who talk left but act right in an awkward position. They are forced to come clean in rejecting radical measures for addressing inequality and reassure their continued support for the investors who channel their wealth into their private bank accounts at the expense of the majority.

Read more articles from Amandla! Issue # 13 March/April 2010

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