The real power among the constituencies engaged in negotiations lay in the hands of white business and in the institutions of the late apartheid state, as journalist and author Martin Plaut argues: ‘The men who had run South Africa for decades also embarked on a process designed to incorporate senior members of the ANC. Radical economic policies were dropped in favour of more conventional macro-economic prescriptions’ (2012: 31). As Plaut suggests, this was no accident; it had been thought through by the old regime and it was to prove decisive in many economic policy battles, including, as we show, the crucial issue of the independence of the South African Reserve Bank (see chapter 6).
Against these factors, most components of the liberation movement, including the Tripartite Alliance consisting of the ANC, the South African Communist Party (SACP) and the Congress of South African Trade Unions (Cosatu), were fragmented, under-resourced and under-capacitated. But its moral and political standing among its own people and in the international community was never higher than it was around 1990 when formal negotiations were poised to begin. These were undoubtedly major assets that ultimately enabled the ANC to prevail at the formal negotiations for a democratic, non-racial, non-sexist and unitary South Africa. As we will attempt to show in our discussion of the economic and social policy debate inside and outside formal constitutional negotiations, it is precisely this goodwill and trust that the ANC rapidly threw away in the search to win the support of international finance capital. This perceived necessity was based on the view that foreign investors would come to support the post-apartheid economy provided that the country played by the rules of the international game.
Keith Hart and Vishnu Padayachee have characterised South African capital in the following way:
The durable features of South African capitalism since its modern inception are mining, racial domination, and an uneven relationship between the state, finance and industry. Although the national economy went through long swings between an external and internal orientation, each of the main periods we have highlighted (1870s–1914, 1914–45, 1945–79, 1980s–2008) was marked by both. South African capitalism has a markedly ‘neo-feudal’ character, distinguished by a cult of alpha-male leadership, cronyism between firms, banks and government, a relative absence of competition, weak democracy in the workplace, [an absence] of a flourishing culture of small and medium enterprises; in other words, a tendency towards absolute rather than relative surplus value … which has its roots in British colonialism, rural Afrikanerdom and a history of racial oppression by a small white minority (2013a: 80).
Hart and Padayachee question the extent to which any of this has changed since the advent of democracy. Of course, 25 years into South Africa’s democracy, few can deny that notable progress has been made in addressing some of the economic and social legacies of the apartheid regime. Yet, progress has not been as widespread, rapid or sustainable as may have been hoped for. The ‘triple challenge’ of unemployment, inequality and poverty, as the ANC government of today defines it, as well as the challenges related to economic growth itself, remain stubbornly intractable. At the time of writing, the economy has slipped into a recession, the second in ten years, the country’s investment grade has been reduced to junk by two international credit-rating agencies, and, despite attempts at their restructuring in this yet early stage of the post-Zuma era, the governance of state-owned enterprises still remains nothing short of shambolic. The much-anticipated inflows of capital, which the ANC bent over backwards to achieve have not materialised; instead both legal and illegal capital outflows have reached obscene proportions.
Together with a serious crisis of service delivery (water, sanitation, electrification, health) in many parts of the country and a concomitant rise in service delivery protests and labour action, as well as weak performance by firms, both big and small, a double whammy of macroeconomic disequilibria and microeconomic stagnation faces the country today. Corruption, personal accumulation projects and governance challenges add to the woes of the still relatively new democracy. A serious, sober and critically reflective analysis of how South Africa has reached this point is necessary and perhaps overdue.
Part (and we stress part) of the explanation for the current malaise, we maintain, may lie in the historic neglect of economic and social policy thinking in ANC political strategy since its formation in 1912 and the relative weakness and lack of creativity of its economic capabilities and thinking in the 1990s, which impacted negatively on the quality and creativity of its policy formulation in the crucial years of the transition to democracy and beyond. In our view, the decisions taken in that period of the transition (c.1990–1996) continue to constrain the scope to rethink and reimagine an economic and social dispensation of the kind that is needed to escape the current economic and social impasse. The question of how this came to pass lies at the heart of this book.
Our title comes from the ANC’s ‘Strategy and Tactics’ document adopted at a landmark strategic conference in Morogoro, Tanzania, in 1969: ‘To allow existing economic forces to retain their interests intact, is to feed the root of racial supremacy, and does not represent even the shadow of liberation. Our drive towards national emancipation is, therefore, in a very real way bound up with economic emancipation’ (ANC 1997: 391–392, emphasis added).
The important point made here is about the imperative that political freedom is accompanied by an appropriate set of economic and social policies that would serve fundamentally to transform the lives of the people whom the liberation movement represented. Anything short of such a fundamental economic emancipation would, therefore, represent a ‘shadow of liberation’.
This book represents an attempt to critically assess the economic and social policy theorising, thinking and choices made by the ANC – in alliance with the SACP and its various trade union partners – in the transition era to democracy (c.1990–1996). However, it is consciously located in a longer historical context – a periodisation we have chosen to start with is the African Claims document produced under the leadership of ANC President AB Xuma in 1943, and which ends in the publication of the Growth, Employment and Redistribution document produced by the ANC-led government of Nelson Mandela in 1996.
In elucidating our arguments on the character of the ANC and its foundational policy orientation, we refer extensively to a fully recognisable ‘social democratic’ basis to the policies advocated by the modern ANC (from 1940 on). While we locate social democracy as a strand of socialist thought (a ‘variety of socialism’ if you will), our reference to social democracy is not meant in its strictly ideological sense of a commitment to a parliamentary road to achieving socialism on the basis of working-class participation through political parties in a constitutional democracy. Rather, what is meant by social democracy is in terms of its substantive economic and social content: the provision of universally provided public goods (such as health, education and welfare services) by the state as an entitlement of social citizenship with a commitment to achieving equity (as opposed to merely ameliorating poverty). This would be achieved through redistributive economic policies that enable social solidarity among all citizens across social strata and thereby ensure a common sharing of the social heritage by all citizens collectively. Additionally, this would be best