Supposing South African Socialism? (III)

One area in which the Creator and Patrick Bond agree entirely, is in doubting the value of capitalism as a tool with which to develop South Africa.

In the past, it was assumed by many, including Marx, that capitalism was an immensely productive force for creating marketable manufactures. The seemingly unstoppable, continuous, radical transformation of life in the developed part of the world between the late eighteenth century and the late twentieth century was a tribute to this. South Africa’s development between the mid-nineteenth century and the 1970s was a part of this capitalist transformation.

However, South Africa’s transformation, like that in countries such as Brazil, was distorted. Governments passed laws to ensure that the benefits of capitalist development would be enjoyed by only a few whites, while the duties of capitalist development — backbreaking labour — were passed on to the black majority. As a result, capitalist development in South Africa was limited, by restraint on the market for goods. Instead of rising up and demanding a free market, however, South African capitalists appeared content with a tightly-regulated capitalism which, while slowing the rate of growth, ensured that the fruits of growth were shared by a few extremely rich people.

Hence, while capitalism may provide rapid economic growth, it certainly does not guarantee it (which is the lie at the heart of neoliberalism). Where capitalism generates rapid growth — most conspicuously in east Asia — it does so under tight regulation. In those places, where regulation relaxed, the growth was destabilised — as in the “Asian crisis”, nominally of 1997-1999, but actually still persisting.

Capitalist development is here defined as the development of goods, manufacturing and services potentially of direct benefit to most people. The manufacture of diamond-encrusted shoelaces might be profitable, but it does not fit into this category. A major trouble with capitalism worldwide appears to be a tendency towards this direction, in the form of financialisation.

Financialisation means that capitalists find more profitable to invest in companies which manipulate money, or trade in the value of goods which they do not make or sell — such as banks, insurance, medical aid, commodities exchanges and property agencies — than in companies which make or sell things. Over twice as much money is traded on the Johannesburg Securities Exchange in a year, as the value of South Africa’s gross domestic product, and this disparity is increasing. The big earners are the money manipulators. This promotes the unproductive use of capital, which generates the most personal profit. This then increases inequality.

Greater concentration of wealth is itself dangerously unproductive. A millionaire will arguably spend more on manufactured goods than a person with only ten thousand rand a year, contributing more as an individual to the growth of the economy (though not as much as would be contributed by a hundred people with ten thousand a year). A billionaire, however, will only spend a small amount more than the millionaire; certainly nowhere near a thousand times more. The rest of the money is invested, probably in unproductive financial activity. Hence billionaires are proportionately vastly less economically useful than millionaires, and every billionaire eats up a thousand potential millionaires. Crudely, the richer you are, the less actually productive, past a certain point. Unfortunately capitalism requires that you get richer without limit regardless of merit.

Socialism seems a more logical alternative; a democratic state, decentralised so far as possible, yet regulating the economic activities of everyone in the state to ensure that nobody is excessively rich, nobody is excessively poor, and everybody labours for the benefit of all. It doesn’t sound difficult. Unfortunately it is extremely difficult because almost everybody, in our present cultural context, asks themselves “What am I getting out of it that he or she isn’t?”. Greed and selfishness, being universal, will torpedo socialism unless they are overridden and ultimately eliminated altogether in favour of altruism. This is not impossible, but wherever socialism has failed, these have been the sources of the problem (along with cruelty and paranoia, of course).

Imagine that these problems can be solved; that somehow the public of South Africa were gradually persuaded that in the end the “Prisoner’s Dilemma”, that famous philosophical game, is true, and that the most positive results are achieved through mutual cooperation. Imagine that somehow South Africa were allowed to pursue this path without foreign interference, destabilisation or invasion. Finally, imagine that this happened in 1960 (which could not have been — even had the apartheid state been crushed, meaningful socialism would not have arisen in South Africa under the conditions of the 1960s). How might South Africa have developed?

The place to start would have been very much where the “Asian Tigers” were starting at that time; ensuring that capitalism was fully regulated by the state, with tight controls over credit. Temporarily, at least, capitalists could have been bought off by opening up the suppressed african market to commercial penetration, which in the 1960s would have led to a spurt of economic growth far greater than what actually took place in that decade of rapid South African development. This would have provided money for a modest expansion of spending on the poor, but as part of an explicit longer-term plan to do them more good later. This would be illustrated, in part by improved access to health-care, but chiefly by greatly expanded education. Unlike the expansion of education which happened under apartheid in the 1960s, socialist education would not be the narrow technical education permitted in the Asian authoritarian states, but would have been a critical education to promote citizens to participate fully in the work of the nation, encouraging citizens to challenge the state’s errors in the name of patriotism, but accepting their own sacrifices in the name of a genuinely better future.

While this was happening, the state would gradually have taken over major industries. It would have been relatively easy to take over mines and large manufactures, and not much more difficult to gradually absorb or compel banks into a national credit structure. The more powerful the state became in the economy, the easier it would be to grow.

However, taking over a corporation runs the risk of being captured by its goals. The object of taking over a mine would not simply be to garner its profits; the object would be to make working in the mine more bearable, while at the same time making the production of the mine serve the interests of the nation. The government could not be so generous to the mineworkers that the mine started losing money (if this happened to all nationalised industries, the national economy would stall) nor try to make as much money out of the mine as possible (as with British nationalised industries, this would be little better than if the mine had remained in capitalist hands). Likewise, if the structure of the corporation remained the same, with unaccountable directors and senior managers earning vast amounts, then the advantages of socialising it would be insignificant. There would have to be proper planning, democratisation, and a small but growing meaningful degree of worker participation.

By the end of the 1960s, however, this would probably have been resolved, and a budgetary surplus would be available in time for a massive investment in other areas. The SASOL oil-from-coal programme would have been needed to respond to the oil price rise. There was an urgent need to develop housing in the growing cities. Meanwhile there would have had to be considerable development in the former homeland areas — widespread and effective development, in communications, transport and other infrastructure, to make it more bearable to stay in these areas, especially where there was support for rural agriculture.

Both subsistence and commercial agriculture would have to be brought under national control. The logical structure would be the marketing and credit structures already existing under apartheid. However, the object would be to gradually socialise private commercial farms (so that the farmers became managers rather than owners, obliged to follow the government’s lead but also benefiting from technical assistance and advice). Meanwhile, subsistence farms in rural areas were mostly already communal; with considerable capital assistance it would have been relatively easy to turn these into state farms, accommodating traditional leadership and methods, but facilitated by the government and gradually producing materials for the market.

Another important urban project would have been providing public transport, both between centres (upgrading heavy rail) and within centres (light rail, perhaps sometimes underground in centres like Bloemfontein and Pretoria). This would have improved urban conditions and would have been a vital addition to the growth of housing in the urban areas. Meanwhile, there would have been the need to improve access to water, both by building dams and by building water recycling systems, first in major centres and then in all centres, along the lines of what was actually done in Windhoek.

By the early 1980s, after twenty years of progress towards socialism, there would probably have been concrete effects on the psychology of society. The spirit of cooperation, planning and mutual aid would have been promoted and, with a government open to criticism and responsive to requests, and which provided everyone with the information they needed about events, a spirit of trust would have evolved. No doubt future planning for this period would have focussed on a further move away from fossil fuels, with a growth both of nuclear energy (very likely in the pre-Chernobyl period, partly because even democratic socialist governments are fond of large central projects) and of renewables.

However, the socialist society would have been particularly affected by the unexpected; the appearance of HIV/AIDS. Part of the problem which AIDS represented in the actual 1980s was caused by the irresponsibility of individuals and of the government. Individuals refusing to accept that their own actions were placing their futures at risk — or not caring, because the culture promoted a contempt for not only the lives of others, but even of oneself. Governments refused to take action, and where they did, they gained little cooperation because almost nobody trusted them. (In South Africa this was exascerbated by the government’s vague hope that AIDS would wipe out the blacks.)

In a democratically socialist society this could have been different. The culture of responsibility for the individual, and caring for others, would have encouraged individuals to acknowledge their status for the sake of their potential sexual partners. The state would have done what it could for HIV-positive people, but would also have promoted universal HIV testing and penalised failure to seek help. Those whose behaviour served to secretly spread the disease would have faced civil actions from those whose lives they damaged. Obviously, once the first antiretrovirals were developed, the government would have made these available to all, regardless of capitalist greed. Under such conditions, possibly by the end of the decade the disease would have been brought under control, and would not have posed the grave threat to social stability that it does now, affecting far fewer people and harming them less. Indeed, the disease would have provided an opportunity to promote non-sexism along with non-racism, which was only partly grasped by the South African government in the real world.

In which case, from the 1990s, South Africa, with its reduced disease and crime burden, full employment and rapid, sustainable, widely-shared economic growth, could have pursued an agenda of further reducing its output of carbon dioxide and methane, of recycling manufactured material to a great extent, and of promoting an informed and cooperative society which could serve as a model for the twenty-first century.

We did almost none of that, of course. But there is no reason why we cannot make a start now.

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