Supposing South African Socialism? (II)

One of the reasons why South African socialists are so hostile to the ANC and to the post-apartheid settlement is that the party and the settlement pose a challenge to them which they are too idle, incompetent and cowardly to meet. This challenge is, simply, to produce a socialist alternative to the ANC within the context of electoral democracy and free speech. A brief glance at Parliament in Cape Town shows the extent of this failure. The endless denunciation of the ANC and the post-apartheid settlement by South African socialists is thus not a critique of that party or that settlement at all; it is an attempt by those socialists to conceal, explain away, or seek excuses for their failure.

An earlier post pointed out just how difficult it would be, how absolutely Utopian it would be, to set up a socialist party in South Africa capable of taking advantage of the opportunity in order to get 5% of the vote. It involves an enormous amount of work and tremendous risk-taking. Socialists in South Africa are not always afraid of work, but they are definitely afraid of risk. (This is why virtually all socialist organisations in South Africa are authoritarian centralist bodies.) They do not wish to expand their parties because that limits their control.

But suppose, for a moment, that a genuine democratic socialist party existed. What would its policies be, and how would it propose to implement them?

This would not be a revolutionary socialist movement. There is no potential revolutionary situation in South Africa. Therefore, socialism would have to be evolutionary; Bernsteinism, with all its likely problems. Meanwhile, South Africa is a capitalist country in a capitalist world, with a long history of capitalist ways of thinking. These are not easy foundations for a socialist movement to take shape. Promoting the idea of socialism would be difficult.

However, there are possibilities. The idea of egalitarianism — which is the root of socialism — is very widespread in South Africa outside the white community. The idea that things ought to be shared in good and bad times, and that rich people are, generally speaking, corrupt and unpleasant people, is very widespread. Even in the white community, despite decades of neoliberal propaganda, there is a vague sense among some people that it is a little embarrassing to be filthy rich (although this is strongly opposed by every single pundit and journalist in the country).

In addition to this, there is the obvious fact that South Africa’s chief problem is inequality of wealth and resources. This is universally acknowledged. However, capitalists insist that the source of the problem is the government (a claim which they derive from elsewhere, and it is probably nowhere more obviously ridiculous than in South Africa). Many so-called socialists join in this chorus, to the detriment of actual democracy, socialism, good sense and even sanity.

Once one accepts the obvious truth that the reason for the inequality of wealth and resources is, predominantly, the desire by the capitalist elite to become richer at the expense of the poor majority, then it becomes apparent that the capitalist elite is the problem. The only force capable of challenging the enormous power of South African corporate capitalism is the government. However, the most effectual kind of government to perform this challenge is a government which does not accept the tenets under which the capitalist elite exist. Therefore the best challenge, the best curb and control, to South Africa’s berserk capitalism, is a socialist government.

Accepting this as an argument, what does socialism entail under these restricted circumstances, where a socialist government in South Africa would have no allies and would potentially antagonise the international capitalist community and its friendly governments almost everywhere?

Clearly, any socialist movement would have to take action to protect itself against hostile forces (which is not, as it has been in many socialist states, a euphemism for abolishing democracy and installing a one-party authoritarian state). It would also have to take action to challenge the political and ideological hegemony over society, thus also helping make itself more popular among the bulk of the populace. Meanwhile, however, it would have to do something to serve the interests of the broad mass of the people, so that they could be mobilised in support of it if powerful capitalist interests challenged it. One does not want a Chile ’73, but nor does one want a Britain ’64 or a France ’81, with capitalist interests forcing an economic crisis in order to co-opt a government into abandoning potentially radical policies. What one wants, instead, is something like Korea under General Park, without the terrorist autocracy and the monopoly capitalism; a state in which socialists are in charge, call the shots, and pursue the best interests of the entire nation and its people.

This has been a very long introduction considering that this post is proposing a plan which no nominally left-wing South African organisation has come up with, but it is here in order to account for the extreme moderacy of the plan.

The socialist government would have to start by defending itself against the standard capitalist weapon, which is capital flight. It would have to immediately introduce exchange controls to stop capitalists from forcing down the value of the currency. This would also oblige South African capitalists to invest their money in South Africa, instead of overseas as is the present case, and would (ultimately) be a major boost for economic growth. There would, of course, be a market panic, which would hurt the capitalists and not the government, so the government would ostentatiously ignore this and observe that what happened on the Stock Exchange was of no interest to it.

On a macroeconomic level, a socialist government would raise income taxes, particularly corporate taxes, from their present unnecessarily low level, probably at the level of about 1% of total income per year over a five-year period, thus restoring taxes to closer to their level early in the post-apartheid state. This would provide a steady opportunity for increased redistribution; alternatively, it would provide the state with additional capital for its projects. However, one important reason for this would be to provide an opportunity to reduce value-added tax.

The reduction of value-added tax would be important, as it is a major regressive tax (since, the richer you are, the lower a proportion of your income is spent on purchasing goods and services, and thus entails VAT; poor people basically pay their entire tax contribution via VAT). It would be perceived by the public as an egalitarian measure. However, if it were shrewdly handled, by encouraging the public to expose those manufacturers and retailers who did not pass on the VAT cuts to the consumers, a reduction of value-added tax could be used to promote distrust of big business and trust in the new socialist government.

An important point, however, would be that where possible the budget should remain more or less balanced. A socialist government would not represent a crisis, such as requires mammoth additional spending. If the proportion of the budget spent on servicing debt constantly shrank, as it has under the ANC, then capitalist banks would have constantly less influence over how the rest of the budget were spent — which is a point often ignored by proponents of fiscal spending sprees.

How would a socialist government intervene in the economy? In South Africa, rail and pipeline transport fall under TRANSNET, artificial fuel production under SASOL and electricity production under ESCOM, and these are all state-owned companies. It is a good start for a developmental state. The priority here must be to restructure these companies to eliminate the “commercialisation” which they underwent as a preparation for privatisation. These companies must become arms of the state with the goal of national development, as a transition process towards becoming forces serving the people of the nation, instead of forces serving their own elites, as at present. The present plans to improve the national infrastructure should be revised in the light of the need, particularly, to shift transport from wasteful private road haulage to efficient public rail transport. (The current electricity crisis has already raised the status of ESCOM.)

It goes without saying that where water supplies have been privatised, these must be nationalised. What little remains of the defence industry, and the iron and steel industry, should probably also be nationalised; selling off these assets was a criminal blunder. Unfortunately, in both cases, the former structures of ARMSCOR and ISCOR have been desperately degraded by their irresponsible multinational owners, so that mere nationalisation will not restore their former status (especially since a nationalised ISCOR would face the hostile attention of the Mittal group, which is notoriously corrupt). It is probable that these companies, once nationalised, will need massive state support. The nationalisation process would have to be funded through bonds rather than through direct compensation, since otherwise the cost would be too great. (Nationalisation must not be fetishised; this is as bad as rejecting it entirely.)

Another important issue is food security. Under the apartheid state food security was guaranteed by a network of marketing boards. Something very similar to this needs to be reintroduced, in order to restore food security, but also — equally importantly — to bring food under South African control, whereas at present South African farmers are at the mercy of international futures markets manipulated by vast multinational corporations like the Carville Group.

This is not gibberish, though it sounds like it; by “deregulating” agriculture, commercial farmers have been obliged to run their farms according to corporate practices, monitoring international prices and futures and planning accordingly, instead of thinking about what their land can produce and what they, and South Africa, need. The farmers would probably be happier with a quasi-socialist, state-controlled system of marketing, which could be introduced quite cheaply (and, given modern communications and data processing, should be far more efficient than the old system was — especially since the old system was manipulated for political purposes because farmers were an important source of white voting fodder). The gist of this would be to bring the consumer price of food down to manageable levels. (As a side effect, food processers could face much heavier penalties than they have in the recent “price-fixing” scandals regarding bread and milk, which are probably only a small part of the real capitalist exploitation of the confusion in the food and farming industry.)

Some of these would probably not be noticed by the public but would give a socialist government more power and capacity to act; some of it would please the public; some of it would please the public and annoy the capitalists. None of this would radically change South Africa away from its present capitalist framework. This would not be the task of the first five years of a socialist party; its task would be to build a basis for action while proving that a socialist orientation would be in the public interest. However, there are a couple of areas on the periphery of South African capitalism which could be nibbled at and which could be used as publicity stunts to point a way to the future. These are the advertising industry and the legal industry.

The advertising industry is a gigantic subsidy system from the corporate sector to the privileged bourgeoisie. It produces nothing, it serves no useful function. It eats money (thus increasing the cost of goods and services) and excretes lies. It should be abolished in toto. If corporations wish to tell lies, they should do so themselves through their publicity agencies (and if they are caught doing so, they should be punished). This would eliminate an immense set of concealed control networks from the capitalist system; for instance, capitalist control over the media is largely exercised through the advertising agencies. If advertising were eliminated, the media would become much more like the nineteenth-century media — the enormous advantages enjoyed by the rich over the poor would be reduced considerably and the press would be a lot more free.

The legal system is in part a system for allowing the rich to get away with committing crimes, or at least to enjoy reduced punishments. Sometimes, as in the tax code, it is specifically a way to facilitate the commission of crimes against the state. If the legal system were nationalised, and every case, criminal or civil, had court-appointed lawyers of the same status on both sides, there would be no advantage in being rich. There would be far fewer frivolous legal actions and the system would be less controlled by corporations; once again, the free flow of accurate information would be facilitated (since anyone would be able to sue in a genuine case of defamation without being afraid of corporate or state power). Of course this would depend on the independence of the judiciary, but this goes without saying. (It might be sensible to introduce a jury system instead of the present system of judge plus assessors.) It would also save a great deal of money which currently goes into the pockets of legal prestidigitators.

Actions of this kind would get the socialist government good PR, since nobody really likes lawyers or advertising people, and would scare the daylights out of the capitalist system without their being able to defend themselves effectively. Hence this would be politically useful. At the ensuing election, the socialist government could confidently expect to do better than before, and could then go on to more serious, important actions over the following ten years or so, in the course of a fifty-year transition period towards socialism.


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