South African Communist Party on capitalist economic crisis, right-wing split in the ANC

NUMSA members

Speech to the National Union of Metalworkers of South Africa (NUMSA) 8th national congress by Blade Nzimande, South African Communist Party (SACP) general secretary

October 14, 2008 -- The SACP wishes to express its appreciation for the invitation to come and address this august body, the 8th national congress of this giant affiliate of the Congress of South African Trade Unions (COSATU). Your congress is taking place at very crucial domestic and international conjunctures which though may seem distinct but are deeply interrelated developments: the global crisis of finance capital and the splinter group from the African National Congress (ANC). I say these are related because we are part of a global capitalist system, whose impact on our shores go beyond just the economic realm, but has had disproportionate influence on our politics as well.

The current global capitalist financial crisis

Although there were some systemic dips, generally in the post-1994 period the global capitalist economy appeared to be going through a relatively sustained expansion. This was certainly the orthodox belief here in South Africa and our fixation became how to link up, catch up and generally benefit from what was supposedly a guaranteed path to growth and all things good. Needless to say, the SACP constantly warned against this illusion – but after 1994 the government pursued policies of rapid opening up and liberalisation through drastic tariff reductions (far ahead of what was even required by the GATT agreements) and the dropping of exchange controls. Impressing foreign investors became more important than developing a national industrial policy, or addressing our skills challenges.

We warned against these neoliberal measures, but we were scoffed at by many in government, not to mention the financial commentators. However, by 2007 even the always-cautious Bank for International Settlements, the club of rich country central bankers, said in its annual report that the world was "vulnerable to another 1930s slump".

That warning now no longer looks alarmist as the wave of bankruptcies and forced mergers of banks, mortgage providers and insurance companies mainly in the US and the UK rolls on. Over the last weeks, the US Federal Reserve has effectively nationalised the mortgage lenders Fanny Mae and Freddy Mac. It has lent $85 billion to insurance and financial services firm American International Group (AIG) to help it avoid bankruptcy. Earlier in the year, it doled out $30 billion to help JP Morgan acquire Bear Stearns and avoid bankruptcy. The sum total of these bailouts is some three to four times larger than South Africa's annual GDP – which gives an indication of the sheer size of the crisis.

Many commentators have remarked on the irony that Bush's right-wing administration has spearheaded the most comprehensive "socialist" program of our era. The Business Times of last week had a headline reading "Welcome to the United Socialist States of America". While the irony of the reversal of long-held neo-liberal dogmas from within Washington itself should be appreciated – it should also be emphasised that what we are seeing is not socialism. It is the socialisation of DEBT – the middle and working classes of the US, and the rest of the world, are being forced to pay for the super profits and the profligate recklessness of the corporate rich. As Marx noted nearly a century and a half ago – this is the iron law of capitalism. Profits are privatised, debt is nationalised.

Should we be celebrating that there is a global capitalist crisis? Yes, but not when this is not accompanied by sustained working-class offensive against the system itself. We can only celebrate if progressive forces worldwide are able to seize the moment to force through a major change in the direction of global accumulation. Without such a change, the crisis will impact mainly upon workers and the poor, and especially those in the South.

In South Africa we will certainly be affected negatively. Global recession will impact upon our export earnings. Our current account (the difference between what we earn from exports and what we spend on imports) is already in a fragile situation. The dip in oil prices is unlikely to be sustained and we are very vulnerable, due to our distance from major markets, to transport costs. As a country, until very recently, we were a net food exporter. In the recent period, thanks to GEAR-related policies [GEAR is the acronym for the ANC government's neoliberal economic policy] and agricultural liberalisation, we have become a net food importer. Key sectors of our industrial economy have all but been wiped out as a result of tariff cuts without a clear industrial policy in place.

We are, of course, being told that, thanks to "the sound macro-economic policies" associated with GEAR, South Africa is not as vulnerable as it might be. Unfortunately, almost the reverse is true. Yes, we concede, that to the extent that there has been a degree of fiscal discipline, our vulnerabilities are less than they might have been. But our argument as the SACP has never been with fiscal discipline as such. We have always argued that we need to be extremely disciplined with public resources, ensuring that we use them for sustainable transformation. It is for this reason that we have argued against the corporate capture of our state, and against the costly white-elephant mega-projects like Gautrain, Coega, the arms procurement package, the Pebble Bed Modular Reactor and the Dube Tradeport. Billions of rand have been spent on these costly projects whose viability and sustainability are highly dubious. Some (including some within the ranks of the ANC) have got very rich on these projects. But where is the much trumpeted fiscal discipline in all of this?

We are constantly being warned that whatever the changes in personnel in the cabinet the one iron law that cannot be broken is the imperative of no change in economic policy. This argument is an argument living in a fool's paradise, and even many of the neo-liberal high-priests secretly admit this.

What is to be done? If we remain stuck on our current trajectory there is a very serious danger that we will be forced to go to the IMF. This must be avoided at all cost. Once trapped in the IMF we will lose sovereign control over our economic policies and our new democracy will be become redundant.

We need to look once more at:

  • Serious exchange control measures to lessen our vulnerability to what will continue to be major financial instability. We need real economy investment and not hot money that flows in and out at a whim;
  • Import controls – even when our economy grows we tend to suck in more imports than we export. We import capital goods, luxury goods and many manufactured goods – these are items either that the majority of South Africans do not need, or that we should be producing ourselves.
  • Comprehensive, accelerated, state-led industrial policy measures that also address job creation and retention, skills development, and agrarian transformation that prioritises national and household food security.
  • Addressing our energy crisis through proper pricing to ensure that the major corporate energy guzzlers (like the capital intensive aluminium smelters with paltry job creation spin-offs) pay, instead of being given long-term special deals way below what ordinary South Africans pay for their electricity. We also need to renationalise SASOL [former state oil company]. As an interim measure, in this regard, we must impose a windfall tax on SASOL. The windfall tax should be ring-fenced and earmarked for energy-related interventions to safeguard, as much as possible, our national energy sovereignty, including the rolling-out of sustainable, renewable energy and investment in public transport.

The progressive trade union movement, especially a union like NUMSA has a very important role to play in these struggles, and this fundamentally relates to the next question we wish to address today, that of the character and role of the progressive trade union movement in the national democratic revolution.

The role of the progressive trade union movement in the national democratic revolution

It is important that when approaching this matter, we return to the basics, the Communist Manifesto,

The history of all hitherto existing society is the history of class struggle. Freeman and slave, patrician and plebeian, lord and serf, guild-master and journeyman, in a word; oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary re-constitution of society at large, or in the common ruin of the contending classes

It is important that we remind ourselves about this reality, because there can be no ways that trade unions can divorce themselves from these broader class battles in society. Whilst the working class creates its own political party (the Communist Party) to spearhead these battles, trade unions themselves cannot narrowly limit their struggles only to those matters relating to the workplace, for a number of reasons.

Firstly, trade unions themselves in their whole history are subject to contestations by various class forces in society. These contestations have taken different forms in different historical periods. It has historically been the mission of the bourgeoisie for instance to destroy, failing which to co-opt the trade union movement. One method that the bourgeoisie has used in trying to destroy or co-opt the trade union movement is by arguing that unions must exclusively restrict themselves to workplace matters.

Here in South Africa, we have had a tendency, called 'workerism' that threatened to engulf our trade union movement in the 1970s into the 1980s. This tendency sought to insulate the trade union movement, if not actually isolate it, from the struggle for national liberation. This tendency was defeated with the formation of COSATU, and had it been allowed to succeed we possibly would not have had our democratic breakthrough in 1994. The mobilization of the progressive trade union movement, as part of the broader liberation movement, ensured that the working class became the head of the offensive against the apartheid regime.

Secondly, whilst all trade unions should prioritise workplace issues, but not a single workplace issue can be won without for instance ensuring the participation of workers in the ANC and the SACP, thus ensuring that a political climate is created in which those workplace struggles can be won.

Thirdly, and in our case, trade unions are contested by the bourgeoisie, now together with BEE [``black empowerment''] types, since they have a lot of resources in workers' pension funds, insurance policies, etc. Had COSATU stood aside in the SACP-led financial sector campaign, this campaign would not have made the gains that we have made now.

Fourthly, there is no contradiction between the independence of the trade union movement, which must be protected at all costs, and its participation in broader struggles in society, and in alliances that would advance the interests of the working class. To counterpose the two is to be thoroughly un-dialectical, and can only serve to weaken the trade union movement in its very workplace struggles it must wage. Instead the correct way to pose the question is how should the trade union movement ensure that there is an appropriate political climate within which it can wage successful struggle to transform the workplace?

Fifthly in South Africa, there has been a coincidence between class and race. As Joe Slovo successfully argued in the past, many South African workers have acquired their initial class consciousness from their experience of racial oppression both in the workplace and in broader society. But also it has been through this class consciousness that has taught South African workers that their class interests cannot be advanced unless colonialism of a special type and its racial regime is completely destroyed, not only in the past, but also in the current period going into the future.

In concluding this matter it needs to be said that any attempt to isolate the trade union movement from broader struggles in society can only weaken and ultimately destroy the trade union movement itself. Building the capacity to successfully wage workplace struggles is integrally intertwined with broader struggles in society.

To ask of the trade union movement to restrict itself only to workplace issues in a narrow way is also disingenuous in another sense. The bourgeoisie, whilst its core mission is to make profit, it is daily heavily involved in politics, using all manner of strategies, including economic blackmail, the golf-course, etc, to try and influence if not determine the political direction of the country in order to create fertile grounds for expanded capital accumulation. Therefore to ask of the trade union movement to focus on workplace issues only is actually asking the trade union movement to abandon all politics to the bourgeoisie and other class forces. It is actually to destroy progressive trade unionism, and leave the field wide open to reactionary trade unions, and the bosses, understandably, love such unions.

It is also a contradiction for any union to characterize itself as being committed to socialism, but then at the same time stand aside from the broader class and political struggles in society. Socialism is a struggle that must be led by the SACP, but cannot succeed unless workers are an integral part of this struggle. Socialism is a political struggle and a political project that must involve the key motive forces of the NDR in the political battles required to achieve this objective.

For example, there is no way that the struggle to organise farm-workers can succeed, unless this is coupled with the struggle to transform South Africa's countryside, and to actively seek to influence land and agrarian transformation. Trade unions cannot stand aside from these struggles and hope that the appropriate political environment conducive to trade union organisation of farm workers will fall from the skies.

Whilst trade unions are not class political parties, but they are class organisations, that should always locate their struggles within the context of broader class struggles in society.

In this period one critical task of the trade union movement is to make sure that the second decade of freedom benefits the workers and the poor. Part of this struggle includes precisely the struggles that have been taken up COSATU, struggles against poverty, against high food, fuel and electricity prices, against HIV/AIDS, against women's exploitation, against narrow BEE, and indeed against the capitalist system as a whole.

Today the SACP is proud of the role that COSATU for instance has played in contributing towards a very clear Alliance program post-Polokwane [venue of the last ANC national congress], a program that has prioritised the following:

  • Decent work and sustainable livelihoods for all
  • The transformation of the health and education sectors so that we can overcome the huge inequalities and disparities in these areas, and also to fast-track skills development for the children of the working class
  • The transformation of the criminal justice system, because it is hugely failing the workers and the poor. Abandoning this terrain can only result in the consolidation of a rule of law for the rich, and a legal system that can be used to undermine worker organisation in the workplace
  • Rural development and agrarian reform in order to prioritise food security and sovereignty for the workers and the poor

NUMSA dare not abandon these terrains of struggles!

Our 2009 Red October Campaign

Last week in KZN we launched our 2008 Red October Campaign in Umlazi, eThekwini. Our Red October Campaign will focus on two main areas: the building of street committees and ensuring mass mobilisation for our communities to actively participate in local governance.

For instance, the Municipal System and Structures Acts require that communities must be consulted before any major decisions are taken including alienation of municipal land and outsourcing. Yet this is not happening, and it is for this reason that the SACP will seek to educate our communities about these laws, and mobilise them to actively shape progressive governance at local level.

Indeed our Red October campaign will also be a platform to campaign for an overwhelming ANC electoral victory in the 2009 elections. The SACP will participate in these elections in support of the ANC within the context of a reconfigured alliance where matters relating to joint development of the election manifesto, deployments and other related issues will have to be dealt with completely differently than from the past.

Defeat the reactionary splinter from the ANC

It is also important for the trade union movement to properly understand the current moves by some to splinter from the ANC. Again no progressive trade union, aligned to the ANC, and part of the Congress tradition, can stand aside from the task of defending the unity of the ANC and our alliance on the grounds that trade unions must stand aside from political battles.

In line with what is contained in the Communist Manifesto, what we are actually seeing happening with this splinter group must be properly understood from a class perspective and in its historical context.

The SACP, since about 2006, had characterised the problems in the ANC as a manifestation of the simultaneous rise and subsequent crisis of a particular class project in the movement and the state, which we correctly referred to as the 1996 class project. This project we said is a class alliance between sections of global and domestic capital a certain cadre in the state, together with the emergent sections of the black sections of the bourgeoisie. This has been a project highly dependent, for its success, on the control of the ANC and the state in order to achieve its objectives.

Polokwane marked the severe dislodging, albeit not total defeat, of this class project inside the ANC. Therefore this splinter group is nothing else other than the continuation of the objectives of the 1996 class project by other means, now that it has been severely weakened inside the ANC. The splinter is an elite class project highly dependent on:

  • Control of the levers of the state
  • Control and transformation of the ANC into an electoralist party, using the masses only to vote in order to ascend to state power
  • The marginalisation of the allies, including the ANC itself from key policy decisions in the state
  • Shifting of real power away from the Alliance into the state
  • Backing by powerful capitalist interests, especially in the financial sector.

The 1996 class project is also compradorial in character, as it seeks to consolidate its hold over government through a parasitic relationship between capital and the state, with sections of the BEE types as the main conduit through which this parasitic relationship is cemented. Therefore it is not an accident that BEE has been narrow and benefitting only a small elite.

It is therefore only this agenda that can be pursued by the splinter group, to find new outlets to pursue a class agenda. For these reasons it is also a reactionary agenda that will only be interested in using the mass of the people for narrow class agendas.

It also needs to be said that this project goes back to 1994, if not earlier. It is the same project that was guided by the strange document that appeared in our movement in August 1994 titled, Umandated reflections , undemocratically imposed GEAR on our country, sought to massively privatise state-owned enterprises, sought to drive the SACP and COSATU out of the Alliance through the infamous 2002 Briefing notes and sought to continue controlling the ANC at Polokwane.

Interestingly elements of this splinter, who are today crying foul of lack of democracy in the ANC, presided over what will go down as one of the most undemocratic practices inside our movement.

The political manifestation of this project post-Polokwane:

Again it is also important to understand how this project manifests itself politically since Polokwane:

  • Its attacks and venom are solely directed at the ANC, and its attempts to try and derail the ANC's election campaign, and clearly seeking to forge a relationship with some opposition elements on the right of the political spectrum in South Africa. This is not surprising given the class orientation of this splinter, as it has more in common with the class interests of elements within the opposition than the resolutions adopted at Polokwane
  • Its anti-worker and anti-communist streak is coming out much more forcefully as it is joining the opposition in making the slanderous claim that the ANC is now controlled by the communists, and complaining about the ANC Secretary General also being the national chairperson of the SACP.
  • It is intensifying its attacks and smear campaigns against the SACP, COSATU and their leaderships
  • It's political outlook and motto is that "Either we continue to control (and transform) the ANC or we destroy it"
  • Its attempt at the continued hold over the levers of the state and other public institutions including the South African Broadcasting Corporation and long-term appointments to boards since Polokwane
  • In trying to justify its existence it is trying to steal the Freedom Charter from the ANC and our people
  • Recruitment of renegades from the SACP and COSATU, elements with a proven record wanting to divide and destroy working class formations and who also tried to use these for their personal accumulation
  • All the above reflected in lack of any policy content in their pronouncements

It is for these reasons that this splinter has sought to defy internal democratic processes, by planning to leave the ANC because they failed to control it. One lesson for all of us in this is that we must never allow leaders who are removed from leadership position to turn around and want to sink with those organisations. LEADERSHIP IS NOT AN ENTITLEMENT, BUT IT IS EARNED, NOT ONLY ONCE, BUT MUST BE EARNED DAILY THROUGH ONE'S BEHAVIOUR AND SELFLESS DEDICATION.

Therefore NUMSA and indeed the working class as a whole must defend the unity of the ANC and our alliance from this renewed offensive of the 1996 class project. An attack on the unity of the ANC and the alliance is an attack on the working class. These splinter forces must therefore feel the full might of the organized working class.

Tasks of the working class

It is therefore important for us to understand the tasks of the working class at the moment and going forward:

  • Deepen mass work amongst the workers and the poor in order not to be derailed but focus on the priorities as, amongst others, identified by our Alliance Summit
  • Ensure that our members properly understand the form that the class struggle is taking and to expose the class character of the splinter as a renewed attempt at a right wing offensive against a radical national democratic revolution
  • Continue our struggle against the rising cost of living for the workers and the poor
  • Building a strong and progressive NUMSA, prioritising workplace issues, but involved as combatants in the broader working class and political struggles
  • Deepen the relationship between NUMSA and the SACP

We are convinced that NUMSA will rise to the occasion and to the challenges of our time!

Wishing you a successful congress.

Thank you

The last night of the proms has always been an establishment rally. “Land of Hope and Glory” recalls the not so glorious days of the British Empire, on which the sun never set and the blood never dried.
To those promenaders singing “Britons never never never shall be slaves”, the idea that they are wage slaves, probably never occurred to them. That on the contrary, they are middle class and “terribly cultured”.
It must have been a bit of a shock for former Lehman Brothers employees - possibly they were also promenaders - to have to humiliatingly carry their belongings out in a cardboard box from their well paid jobs, after being told by their boss, “it’s over, move on and find other work”. And this will continue for some time for others, it being predicted to happen to a hundred thousand more of their well paid colleagues in the City, before the end of next year.
All these well heeled, privileged bank employees, traders, brokers and analysts, speculators all, must also be starting to realise that they are wage slaves too, with only their labour power for sale, equipped with whatever number of academic qualifications they have, to sell to the highest bidder.
The credit crunch has forced a lot of such people to have an agonising reappraisal about the world in which they live, or had lived, with varying degrees of comfort and it coming to an end. Now, for the time being at least, all their talents dedicated to the pursuit of money and capitalism are worthless. As the old saying goes, He who works and does his best, goes down the road with all the rest.
When these worthies, who have gambled and lost a lot of other peoples money, recover from the shock and start to look for work, they will find they are in a buyers market, where salaries and bonuses - if any - are much lower than they previously enjoyed.
This downward pressure on wages, combined with the rising price of commodities-for instance, the £2 Tesco chicken is no longer on the shelves - petrol price increases, rising mortgage deposits for first-time buyers, repossessions, are a result of the credit crisis surging through the economy.
If history is anything to go by, these developments will be a radicalising process, either to the right or to the left, as in the Weimar Republic of the 1920s and America of the 1930s.
The first signs of this have already have been seen at the Labour Party conference and measured by the applause given to Derek Simpson of Unites’ remarks, that hedge funds and equity funds should be taxed out of existence and to Tony Woodley also of Unite, who made a call for the energy utilities to be nationalised.
In addition, ministers fear that Labour MEPs will be encouraged to vote against the UK keeping its opt-out from the European Union rules restricting working hours, after the government suffered a conference defeat at the hands of the trade unions and with big business beginning to complain that Labour ministers are succumbing to “populist” pressure from the left.
So when the punters hooked into capitalism for its apparent success, they must also be prepared to accept its failure. By the size of the long Northern Rock queue, when the bank collapsed, obviously not. But this is a traumatic experience they must get over if they are to continue their lives in the pursuit of happiness.
When they discover that it’s not to be found in money, or booze, crime, gambling, or a flight to a foreign shangri-la, by dint of the efforts of the forces for change in society, they can discover it on their own doorstep, in the shape of Socialism.
Forcing these new victims to realise their real place in society has been the collapse of huge American financial institutions such as Bear Stearns, the collapse and subsequent nationalisation of Freddie Mac and Fannie Mae, the collapse of Lehman Brothers after 158 years and the American International Group, subsequently also nationalised, an unprecedented move for an insurance company.
With the further collapse of America’s Wachovia, British banks Northern Rock and Bradford & Bingley after 157 years, Iceland's third largest bank Glitnir, Belgo-Dutch Group Fortis and Germany’s Hypo Real Estate, with falls in Dexia, Commerzbank, ING and the Bank of Scotland; the whole exercise taking on a Domino effect.
The nationalisation of Bradford & Bingley’ mortgage books, but the sale of the £20 billion of deposits and 200 branches to Spain’s Santander, for about £400 million, makes the point that the UK government is not taking over the running of entire banks from the private sector.
Will Hutton, in the Observer of September 28th summed it like this, If more people understood what has happened in the UK and US banking system, the financial crisis would only be containable by the immediate partial nationalisation of every bank in Britain and America.
There was not a run on the banks by depositors queuing in the streets to withdraw their savings.
Rather, it was an escalating and terrifying run on the banks in effect by themselves, which, if it spread to millions of small savers, would produce the events of 1929.
In the UK, the money markets that banks organise between themselves completely froze.
I have been writing on the financial markets for nearly thirty years. I have known the system was becoming increasingly fragile, but for all the ferocity of my criticisms, I never expected the scale of today's events.
The negotiations in Washington over this weekend to finalise the $700bn Paulson financial bail-out plan, and the expected vote on Sunday, are all that stands between the Anglo-American banking system and a first-order disaster.
The government will buy toxic debt rather than inject government funds into the bank's capital base, in other words, reject even partially nationalising the entire banking system as the Swedes had to in 1992.
What we are relearning is that without trust and fairness, capitalism risks its own sustainability, even while it unleashes forces that undermine those self-same values.
For example, Treasury Secretary Paulson negotiated a special tax exemption when leaving Goldman Sachs.
In the meantime, financial markets with sovereign wealth funds are straining at the slips to “rescue” the bankrupt western institutions. Their record so far is impressive.
Singapore-Temasek, China Development Bank and Qatari Investment Authority-£4.5bn in Barclays.
China State Investment Company-10% of Blackstone.
Government of Singapore Investment Company-£5.5bn in UBS and $7bn in Citigroup.
Abu Dhabi Investment Authority-$7.5bn in Citigroup.
These funds may employ the new found wage slaves, if not they will join the other army, of the unemployed.