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"It is certainly not our task to build up the future in advance and to settle all problems for all time, but it is just as certainly our task to criticise the existing world ruthlessly. I mean ruthlessly in the sense that we must not be afraid of our own conclusions and equally unafraid of coming into conflict with the prevailing powers."
Karl Marx, 1844

The transformation of the ANC into a party of monopoly capital

Published: March 1997

On 12 March 1997 the Minister of Finance of the ANC government presented his maiden budget speech to the South African parliament. Since the advent of the ANC-led government of national unity, the key cabinet portfolio of Finance has been held first by a leading businessman and secondly by a banker. Ironically, the maiden budget of the ANC minister has proved to be the most austere of all the government of national unity budgets. It is a budget that is characterised by real cuts in social expenditure -both with respect to below inflation increases and with reference to falling per capita expenditures. It is characterised by South Africa’s integration into the world economy through foreign exchange control deregulation, a promise of tariff reduction and a cut in the level of customs and excise duties. It encourages the “liquidity” and international competitiveness of South Africa’s financial markets, and introduces a culture of financial speculation and foreign exchange hedging by South Africa’s middle classes.

The budget was met by marches by students and workers. COSATU has objected to the budget on the grounds that it does very little to stimulate job creation. Since the elections of 1994 there has been growing dissatisfaction among the people about the slow pace of delivery of the social services and jobs that the democratic movement promised in the Reconstruction and Development Programme.

In the initial phases, many in the democratic movement said that the slowness of the delivery was a result of problems caused by those who had opposed the movement in the past. In particular, it was said that the problems and delays were due to the fact that the movement had been forced into a coalition with the National Party, a party that had spent its whole life oppressing the black majority and the working class.

After the National Party left the GNU, however, things did not improve. In fact, when the ANC government published the document called Growth, Employment and Redistribution, or GEAR, it became clear that a serious change had taken place in the ANC. It became clear that the lack of delivery by the ANC was not just a product of sabotage by those who had supported apartheid in the past. The lack of delivery was a result of the policies that had been adopted by the ANC, in particular the GEAR.

The response to GEAR within the democratic and working class movements has been varied. There are those who say that although GEAR is a radical shift to the right by the ANC, it is a product of the constraints faced by the ANC. According to this view, it would therefore not be a correct response to “label” the policy as neo-liberal, as some in the democratic movement were doing. What was needed was an “engagement” with the ANC so as to strengthen the positive elements of GEAR. This position is largely promoted by the South African Communist Party, and in line with this position it has “generally welcomed” the budget. Some, however, openly criticised GEAR for being a neo-liberal programme argued that the ANC was capitulating to pressure from the international financial institutions such as the International Monetary Fund and the World Bank.

A common error in the debate over GEAR, even among people who criticised GEAR as a “home-grown structural adjustment programme”, was to treat GEAR as the beginning of the ANC’s slide into neo-liberalism. In fact, GEAR was not the beginning of the slide into neo-liberalism, but was the summation of drifts into neo-liberalism in various areas of social, economic and political policy. These developments had been proceeding at various paces since the unbanning of the ANC. The entrenching of property rights in the constitution, the acceptance of federalism, the dropping of nationalisation as ANC policy: these were some of the developments that indicated that the ANC was shifting rapidly to the right. When President Mandela said that GEAR was non-negotiable, some made the mistake of interpreting this to mean that there would be no “discussions” on the policy document. In fact, the real significance of the President’s statement lay in the fact that the policies that were outlined in GEAR had already been implemented.

Another feature of the debate around GEAR is that although many activists in the democratic movement can see the problems with GEAR, there is no clarity as to why the ANC has taken this path, and also how it had arrived at adopting neo-liberal policies. In order to develop strategies of how to respond to GEAR, it is important that we answer the question: what is the political significance of GEAR? In this paper I will show that GEAR represents a programme of monopoly capital, and I will show why and how the ANC came to adopt a programme of monopoly capital.

What does the GEAR strategy say?

The most important elements of GEAR are:

  • Economic development in South Africa must be led by the capitalist class, or what it calls the “private sector”.
  • The state must play a less and lesser role in the economy. The state’s role must be create a playing field in which the capitalists can invest in the economy. In the Department of Housing White Paper, which spells out the policy of the Department on housing, it is said that the role of the state is to create the conditions in which banks can be certain that people will pay. According to the policy this will ensure that banks will give loans for housing. In this way there will be delivery of houses.
  • Privatisation of state-owned enterprises.
  • Cuts in government spending. The aim of these cuts is to repay the debt that was accumulated by the apartheid government, and which is owed to the local and international banks.
  • “International competitiveness” and an export orientated economy. This means that tariffs and duties which had protected industries in the past will be removed and it will be easy for imports to come into the country.
  • In line with this policy of opening up the economy, the GEAR says that exchange controls regulations must be removed so that it would be easy to take money out of the country. According to GEAR, if capitalists can take money easily out of the country, then foreign capital will come into the country.
  • A wage freeze (it calls this “wage moderation”). It also calls for the deregulation of labour markets. The present government policy on “flexibility” of labour markets, according to which the bosses will be allowed to lower labour standards, is part of this strategy of GEAR. This policy is being opposed by the workers and their unions in the negotiations around employment standards.

Although the spokespersons of the government say that the GEAR policy will lead to the implementation of the RDP, many in the democratic movement have pointed out that GEAR will in fact lead to the complete undermining of the RDP. GEAR will lead to job loss and no new jobs will be created. In many industries like the textile, clothing and leather sectors, many jobs have already been lost because of the policy of lowering tariffs. In the housing sector, the government’s dependence on the banks to deliver housing has led to no delivery, and recently the government has said since it has no money people will have to live in shanty towns where the government can provide latrines and central taps. The ideal of decent and affordable housing that was spelt out in the RDP has been abandoned.

To many people it has become clear that the government has abandoned the approach of the RDP, and that this is the main reason why there has been no delivery of jobs and social services. It is also clear that as long as the government follows this policy, no significant delivery will take place.

GEAR is more than an economic programme: it is a political programme

A common mistake that has been made in discussing GEAR is that comrades look at GEAR as being an economic programme of the government. As a result, many comrades blame Trevor Manuel and the Department of Finance for this neo-liberal policy. Under a capitalist system, however, there is no economic programme that is separate from the entire political programme of the party and classes in power. It is important for us to therefore spell out the relationship between an “economic” programme and the politics of a country.

Under capitalism production is for profit. This means that in order for the system to work capitalists must be able to employ workers at wages that would allow the capitalists to make profits. The key question that a capitalist economy must solve is how to ensure the availability of workers for the factories, but at the same time to ensure that there are more workers than the factories need? The reason why capitalists need more workers than the factories need is that if all workers are employed, what is called “full employment”, then workers bargaining power will be increased because when growth occurs the different capitalists will compete for workers and this will lead to wages rising fast and to profits falling. This is what happened in the 1960s in Europe and America, and this led to falling profits and to the crisis.

Capitalists therefore need to implement measures that ensure that there are workers who will accept low wages, and that unemployment is not completely solved. These measures include the introduction of new technology, and the blocking of unionisation. In this respect the most important role is that of the government. Capitalist government must implement a number of laws that force workers to accept low wages, and laws that ensure that unemployment is not abolished. The two key measures for achieving this are the deregulation of labour markets and the opening up of the economy so that capital can leave the country easily and foreign goods can come into the country easily.

The deregulation of labour markets means bosses can fire workers easily -for example if the workforce is then casualised it is easy to fire workers, and when there is high unemployment workers are forced to accept low wages. The second set of laws, the opening up of the economy, ensures that if the workers of a particular country are strong and they do not accept low wages, such as in Germany at present, then bosses can close their factories and move them to other countries. This threat also forces workers to accept lower conditions and lower wages. Cutting social services also has the effect of cutting workers access to resources and therefore forcing them to accept low wages and bad conditions. The attack on unemployment benefits by many capitalist governments is one of the ways in which they force workers to accept low wages.

Any economic programme by a capitalist government therefore needs co-ordinated political intervention by the government in order to ensure that the conditions for low wages and high profits are achieved. That is why all the approaches outlined in GEAR can be seen in all the ministries of the ANC government. The housing department emphasises the role of the banks, the education department cuts financial supports to the sons and daughters of workers, the health department closes hospitals which serve workers (such as the Hillbrow hospital), the land department implements a land “redistribution” programme based on the free market, the labour ministry wants to lower employment standards through its new act, and so on and so on.

GEAR is the political programme of monopoly capital

There are three social forces that will benefit the most from the implementation of GEAR. These are: (a) the monopoly companies that dominate the South economy, (b) the new black capitalist class and (c) foreign transnational companies or monopolies. Let us look at each of these social forces in turn.

(a) Local monopoly capital
From the beginning South African capitalism had strong monopoly tendencies. Only companies with very large amounts of capital could exploit the gold discovered on the Reef. By the beginning of the 1950s these companies had been consolidated into a few companies, the most important of which was the Anglo-American Corporation. These companies used the profits from the cheap labour on the mines to diversify into other industries and today more than 80% of the nation’s wealth is owned by no more than 5 conglomerates or monopolies. South Africa has a high concentration and centralisation of wealth and economic power.

Throughout this (20th) century the centralisation of economic power also produced a centralisation of political power. This centralisation of political power has expressed itself in a number of ways: firstly, there has always been a very strong state, which was needed to ensure good conditions for profitability. Secondly, there were strong ties between the capitalist class and the state bureaucracy on the social, economic and political level. Many politicians share suppers, exchange gifts and have joint holidays with the capitalists. Politicians are also given shares in the companies, and the capitalists have funded the various political parties such as the National Party and the so-called Democratic Party.

Thirdly, South Africa was in fact a “one-party democracy”. So although there was democracy for whites before 1994, it was always clear that other parties were there just to give an appearance of democracy: they had no real prospect of getting into office. The centralisation of economic power was therefore reinforced by the centralisation of political power, and there developed a ruling class that has no history of a serious – even if capitalist -multiparty democracy.

Although South African monopoly capital developed on the basis of a violent use of the state to ensure cheap labour and a reserve army of the unemployed, by the 1980s this class was looking for access to global markets. Large reserves of capital that were withheld from investment in South Africa – the so-called investment strikes, were looking for investment opportunities overseas. The apartheid political regime therefore increasingly became a problem.

Monopoly capital, however, also had deep roots in South Africa. Groups such as Anglo-American had strong mining and industrial interests in South Africa, and these interests formed a solid base from which this group, and others like it, expanded into the global market. They therefore cannot just abandon South Africa for the global market; they have to ensure that the conditions for profitability in South African are restored, so that they could continue to use South Africa as their base of expansion.

Local monopoly capital therefore needs two things: one is the space and right to expand into the global markets, and the other one is to restore the conditions for better exploitation of labour-power.

The coming into power of a black majority government was the important first step in achieving these two aims: but on condition that this government went further and took measures which ensured access to global markets, and a workforce that would accept low wages and poor working conditions.

The GEAR strategy achieves both these basic aims. Its commitment to remove restrictions on the movement of capital abroad will serve the global ambitions of local monopoly capital. The deregulation of labour markets will achieve the second aim. As GEAR says, low wages are “a precondition for sustaining the competitive advantage of the currency depreciation, and it is the key to ensuring the maintenance of industrial competitiveness in the longer term.. ..It is therefore important that wage and salary increases [except those of the politicians!] do not exceed average productivity growth”. In other words, profits must increase much faster than wages.

The GEAR strategy is therefore the political programme or testament of monopoly capital. Monopoly capital stands to benefit the most from GEAR, and it is to serve the interests of this group that GEAR has mainly been introduced.

But how did monopoly capital ensure that a party of the poor would agree to implement a programme of the rich? How did monopoly capital ensure the transformation of the ANC from a party of the poor to a party of monopoly capital?

Monopoly capital has used a number of methods to achieve this change.

Weakening the working class through violence
In the pre-1994 period the weakening of the working class, which is the traditional base of the ANC, took the form of organised state violence against working class townships, especially in Gauteng. The weakening of the working class and its organisations had two effects: on the one hand it creates the conditions for the leadership to delink from its base both organisationally and politically. When the class is organisationally demobilised it cannot keep its leadership in check and prevent it adopting right-wing policies. On the other hand, the weakening of the working class ensures that when neo-liberal policies are implemented the capacity for resistance will be much weakened. The ANC leadership contributed to this process of the weakening of the working class, and to the process of delinking itself from its base by confusing the working class as to the sources of this violent attack on the working class, i.e., by promoting the theory of the so-called “third force”.

Investment Strike
Capital staged an investment strike, which forced the ANC to accommodate the interest of this class of owners of capital. Local capital is largely responsible for financing the borrowing requirements of the government. The movement of interest rates for government bonds is a powerful weapon in the hands of the capitalist class.

Ideological Offensive
The capitalist class used its control of the press to mount a major ideological offensive against the ANC. It pressured the ANC leadership into dropping nationalisation and state intervention in the economy. At present, through the “crime” campaign it is succeeding in turning the ANC into a party of “law and order”.

Political buyout, creation of social distance and corruption
The capitalist class established political links with the ANC, for example through contributions to the fund raising efforts of the ANC -this was a case of political buyout. The creation of a social distance between the leadership of the ANC and its constituency was achieved via high salaries for MPs and through drawing the ANC leadership into the social circles of the capitalist class. This includes free holidays, free nights at hotels and at major sports or social events, dinners and suppers with the capitalists, and so on. Outright bribery and corruption have also been used.

Using the state bureaucracy
The use of the dead-weight of the old state bureaucracy was one of the methods used to shift the ANC to the right. In the negotiations at Kempton Park the ANC was forced to agree to “sunset” clauses which protected the old state bureaucracy. This is the layer that is driving policy development in many ministries, and also determines implementation. Important capitalist thinktanks like the Reserve Bank and the Development Bank of Southern Africa played a key role in drafting the GEAR strategy. It is no mere coincidence, therefore, that GEAR is an exact copy of the Normative Economic Model, the National Party’s neo-liberal policy that was drawn up by people from the Reserve Bank and other conservative economists. It is important to note, however, that this layer could not be successful if the ANC was not changing politically.

Creation of a black capitalist class
Monopoly capital has also engaged in an active process of creating a black capitalist buffer class. I will return to this topic below.

These then were some of the key methods that monopoly capital used to transform the ANC. The violent attack on the working class was the central element in all these methods.

(b) The Emerging Black Capitalist Class

Neo-liberalism is traditionally a programme of monopolists and financial capitalists. This is because its policy of high interest rates bankrupts many small businesses. Its policy of no state intervention and open economies also favours the large companies with large financial reserves, who can compete on the open market. Therefore, although the ideologues of neo-liberalism like to say they like small business, their system actually destroys small business and makes it entirely dependent on monopolies through unequal “sub” contacting arrangements.

For this reason, in most developing countries, small businesses and emerging capitalist always favour a strong role for the state, even including nationalisation. Why then is the local emerging black capitalist class supporting a path that favours monopolies and one that in the long-term destroys small business?

The power of monopoly capital
The first reason is to be found in the structure of South African capitalism itself. Its high concentration and centralisation of economic power, its capital intensity in the most important industries, and the complete control of access to credit by the various conglomerates; all this means that it is not easy to enter the various industries. Monopoly capital also has enormous power in the state apparatus, given its control of the nation’s money and credit. Moreover, it must be remembered that most of the state debt in South Africa is owed to local finance capital.

Economic Crisis and Stagnation
The second factor is that South Africa’s emerging black capitalist class in emerging in a context of a long wave of economic stagnation and crisis. This has intensified competition, but it also means that weak capitals periodically go bankrupt because of the shorter and shorter cycles of growth and recession. In the past few years the majority of new small businesses have gone bankrupt before they are a year old.

The political settlement
The third factor is that the political settlement in South Africa has prevented the use of the state as an instrument of accumulation by the black capitalist class. The transformation of South Africa into a constitutional state, and the constitutional rights that the constitution entrenches, ensured that white monopoly capital can always use the courts to defend any attempt by the state to discriminate in favour of the emerging black bourgeoisie. Take for example, the awarding of tenders for various state purchases. According to the constitution, tenders must be in accordance with a system which is fair, equitable, transparent, competitive and cost-effective…This clearly advantages large monopoly capital, so that even the clause that allows some affirmative action in tendering depends on interpretation by the courts. An example of the effect of these policies was the recent round of tenders for the bank accounts of the provinces. During the rise of Afrikaner capital, the National Party used state accounts to build up Afrikaner financial institutions, whereas the ANC was blocked using the same method to build black financial institutions.

Dependency and support for neo-liberalism
It is the combination of these factors, and most importantly the inaccessibility of the state as an instrument of accumulation, that has been decisive in the drift of the black capitalist class to neo-liberalism. The emerging capitalist class is sandwiched between local and foreign monopoly capital: in order to become a capitalist class at all, it must sing the tune of the local, white, monopoly capitalists. As a result, all the “black empowerment” deals demonstrate the dependent character of the emerging class of black capitalists. Not only do they buy assets from big monopoly capital, but they are indeed financed by big monopoly capital!

The compradorist, or dependent nature of the black capitalists makes it possible for big monopoly capital to use them to get political access to the new ANC government, to get large government contracts, and to strengthen the social connections of monopoly capital to the new government. The new class of black capitalist have no choice but to support privatisation, to support the removal of restrictions on movement of capital overseas; in general, to support GEAR. The new class of black capitalists has no political will of their own: their political will is kept in the vaults of the country’s big financial institutions.

(c) Foreign Monopoly Capital

Another key social force that has been instrumental in the adoption of neo-liberalism by the ANC is foreign monopoly capital. The Transnational Corporations (TNCs) are the main social force spearheading the spread of neo-liberalism all over the world. These large companies, such as Ford, IBM, Boeing, ICL, and others use their control of the governments of the major capitalist countries, the so-called Group of 7 (G7) pressure the governments of developing countries to open their economies to these TNCs to allow these TNCs to repatriate their profits, and to force them to deregulate their labour markets: in general, to adopt neo-liberal policies.

The G7 countries use international institutions such as the World Bank and the International Monetary Fund, and organisations like the World Trade Organisation to force governments of developing countries into agreeing to neo-liberalism. Foreign monopoly capital has also used the emerging black capitalist class as a vehicle to influence the ANC; it also uses the black capitalists to get government contracts, especially around privatisation.

These three social classes, or fractions of the same class, are the most important beneficiaries of GEAR. GEAR is their political platform and testament. Clearly the dominant fraction among them is local monopoly capital.

We see therefore which social forces does the GEAR political programme represents. We also see the methods used by these social forces to drive the ANC into the camp of neo-liberalism. But where was the working class during all this? Why did it not contest the “soul of the ANC”? Why was the working class unable to use its long association with the ANC to prevent this move to the neo-liberal right?

We have already seen how the capitalists acting under the National Party weakened the working class through a campaign of violence in the early 1990s. But we all know that although it was wounded, the working class was not defeated. Other factors facilitated the failure of the working class to win “the battle for the soul of the ANC”. To understand this failure, we need to look at the role played by three key social forces: (i) the leadership of the trade unions, (ii) the layer of intellectuals that had given strategic guidance to the labour movement, especially in its formative period, and (iii) the South African Communist Party.

(i) The role of the union leadership

The role of the leadership of the trade unions, especially COSATU, during the post-1990 period has made it possible for the ANC leadership to drift to the right. This can be seen most clearly in the way the leadership responded to GEAR. Although COSATU has raised some problems with GEAR, it has not outrightly rejected GEAR, and most importantly it has not mounted a campaign to pressure the ANC to change its course. In the recent paper on the Alliance by COSATU, the only complaint about GEAR is that it was not discussed with COSATU, but was presented as a non-negotiable document. This kind of response reinforces the drift of the ANC to the right.

The way the COSATU leadership has responded to GEAR is a product of its drift into reformism, and its gradual abandonment of socialist positions. Up to about 1992, COSATU still called for the nationalisation of the “commanding heights” of the economy, and for the building of a democratic economy based on workers control. Even at that time, however, there were tendencies in the COSATU leadership which emphasised tripartite “social contracts” with the bosses and the state, and this culminated in the formation of the National Economic Development and Labour Council or NEDLAC. This is a statutory body whose objective is to achieve social consensus between labour, capital and the state.

The reformism of the union leadership has also revealed itself in the rush to establish investment companies. This is increasingly tying unions to capital, and is introducing the politically dangerous practice of “business unionism” into the militant labour movement in South Africa. Many of these union backed companies are lining up to buy the privatised state companies, and so the struggles of the unions against privatisation has been greatly weakened.

The union leadership have therefore contributed to the drift of the leadership to the neo-liberal right by their failure to seriously and strongly oppose this drift of the ANC

(ii) The retreat of the intellectuals

One of the important contributions to the development of the labour movement, and to the development of Marxism in South Africa, was by a group of intellectuals who were active in the labour movement. Those in the unions were part of a wider layer, almost exclusively white, that played a major role in the development of South African Marxism. They contributed to the development of socialist consciousness and politics in the labour movement.

This layer began its retreat from socialist politics, and into reformist politics, in the late 1980s. By the time of the democratic elections this layer had come to adopt a neo-liberal politics. Two of the members of the drafting team of GEAR, Steven Gelb and Alan Hirsh, were part of this layer of intellectuals; the present Minister of Trade and Industry, Alec Erwin, also belonged to this group, and so did the socialist-turned-MP-turned-capitalist, Marcel Golding. The importance of this groups’ capitulation is that at the time when the capitalist class was engaged in an ideological offensive against the workers movement, this layer of intellectuals facilitated the defeat by promoting the same neo-liberal ideas of “competitiveness”, “export-led growth”, “tight fiscal policy”, “flexible labour markets” and so on, within the workers movement. These weakened the workers movement and facilitated the drift to the right, since there was no socialist response to the offensive of the capitalists.

What accounts for the capitulation of this layer? The fundamental reason for the retreat of this layer from socialism is the retreat of the working class movement, locally and internationally. The attacks on the working class, and the reversals and retreats that it suffered since the coming into power of the neo-liberal governments of Margaret Thatcher of Britain and Ronald Reagan of the United States of America, led to many intellectuals all over the world abandoning their belief in socialism. The retreat of the intellectuals was also accelerated by the collapse of Stalinism in Eastern Europe and in the Soviet Union.

The international developments were especially important for this layer, given that its base in the universities acted as a transmission belt for changes in thinking among intellectuals overseas. As a result of this link to academia, this layer of intellectuals was influenced a lot by literary fashion; and no one expresses this susceptibility to literary fashion than Steven Gelb.

Another important factor that accounts for the retreat of this layer was its relation to the South African working class. Although they stood at the head of some of the important unions, they never managed to sink deep roots into the working class, and in the end they were dragged to the right by changes in international academic fashion, and by the shifts to the right on the part of South African nationalism.

In the end, this group moved from democratic socialism, via the need for international competitiveness in “order to serve the working class”, and finally to neo-liberalism. Their evolution is important in understanding the failure of the working class to prevent the rightward drift of the ANC: this group promoted, and provided theoretical rationale for the embracing of neo-liberalism by the ANC. Many of its leading spokespeople and theoreticians are firmly inserted into the neo-liberal outlook. They also starved the state apparatus and its so-called independent think-tanks.

(iii) The South African Communist Party

The speed with which the ANC was able to move to the right, and the failure of the working class to slow down or reverse this slide cannot be completely understood without looking at the role played by the SACP. For it must be remembered that from the mid-1980s onwards, the SACP was indisputably the leading socialist force within the working class in South Africa. By 1987, at Second Congress, it gained almost complete hegemony within the labour movement.

And so what role did the SACP play? The fundamental role of the SACP has been to provide the left-sounding theoretical cover for the right shifts of the ANC. One of the important landmarks in the evolution of this role has been the justification of the capitulation of the ANC in the Kempton Park negotiations: Joe Slovo’s theorisation of the so-called “sunset clauses”, over which the sun is clearly not setting.

This role has also been evident in the discussions over GEAR. The intervention of the SACP has been to prevent party militants from criticising GEAR, and this is done by mainly calling for GEAR to be “discussed”, and militants are warned of the dangers of falling into the ‘trap’ laid by the enemies of the people and of the “national democratic project”. The ‘trap’ to be avoided is the labelling of GEAR as neo-liberal! Not only is one of the Ministers responsible for implementing GEAR, Alec Erwin, a member of the SACP, but within the leading echelons of the party the real debate is whether to celebrate GEAR policies as “the historic and objective reality at this stage of human development or to take the working class’s attention away from GEAR completely.

The position of promoting GEAR as a road to capitalist paradise is spelt out in the “ANC” discussion document, “The state and social transformation”. Whoever reads this so-called ANC document will see that this is really a debate among different positions in the leading structures of the SACP, or among its leading personalities. The dense use of a Stalinist “dialectics” to justify capitalism is clearly not needed in the leading bodies of the ANC: but it is something that is certainly needed to allay the conscience and fears of leading party people. The so-called ANC discussion document is a bold attempt to use revolutionary sounding phrases and ‘heavy’ ‘philosophy’ to justify neo-liberalism, including privatisation, cutting social services, tight fiscal regime, abolishing exchange control regulation, and so on.

The other position within the SACP, that of trying to deflect the attention of the working class away from GEAR, is contained in the paper issued by the SACP’s Secretariat, titled “Let us not lose sight of our strategic priorities” (1997). In a paper issued in the midst of a debate that goes to the heart of what this movement has stood for close to a hundred years, there is not one mention of GEAR. There is however an obscure reference to debates on “macro-economic” questions. Here is what is said: “The SACP, along with all our allies, must continue to encourage a broad and constructive debate on both macro-economic policy and housing policy. We must rebut attempts to portray such debates as ‘rocking the boat’, as ‘irresponsible’. But, by the same token, we must ensure that the debate does not become cheap labelling (‘neo-liberal sell-outs!’). We must seek to strengthen government’s capacity to govern effectively, while at the same time doing justice to the complexity of the challenges facing us”. The lesson, to militants is clear: debate “macro-economic policy” but not GEAR, debate as much as you can, but reach no conclusions about the class nature of a policy -whether GEAR or housing.

The role of the SACP is central to the inability or failure of the working class to pressure the ANC to the left: the SACP provides a left-sounding cover to the neo-liberalism of the ANC.


We have seen that GEAR is the political testament of local monopoly capital and its foreign counterparts; we have also seen how the emergent black capitalist class, sandwiched between local and foreign monopoly, has lost any political will it might have had, and has been forced to sing the tune of neo-liberalism. We have also seen the role played by the union leadership, the white, formerly left-wing intellectuals, and the pivotal role of the SACP in justifying the neo-liberal drift of the ANC.

It now remains to ask: what have these developments meant for the ANC as an organisation? What kind of transformation has the ANC had to undergo in order to make such a profound transformation in outlook possible?

New Politics and a New ANC

This is a vital topic for the future of the working class movement, and it clearly requires a systematic treatment on its own. Here I only outline the key elements of the transformation that has occurred.

I began the analysis of the class forces that are driving the present direction of the South African state by observing that throughout its history the South African ruling class has completed the centralisation and concentration of economic power with the centralisation and concentration of political power. I now want to develop this observation a little further.

Centralisation of power in the ANC

The concentration of political power in the organs of state is paralleled by the concentration of political power within the ruling party. The signs are that such centralisation of power has already gone far in the ANC. It is now common cause that power is increasingly being concentrated in the office of the deputy president, Thabo Mbeki. The fact that the concentration of power is taking place in the office of the deputy-president, and not of the president, does not reflect the power of this office over that of the president, but merely the fact that the succession stakes have already been decided: the deputy-president is the president-in-waiting. The National Working Committee (NWC) and the National Executive Committee (NEC) of the ANC are increasingly becoming rubber stamps for decisions taken in the office of the deputy-president. If there was any doubt in any one’s mind, then the decision making process around GEAR settled these doubts. GEAR was developed in the office of the deputy-president, and simply imposed on the ANC NEC after it had been made public and non-negotiable. This was a political humiliation for a body that is supposed to be the highest decision making body between ANC congresses.

Fusion of the ANC and the government

The office of the deputy-president in the ANC is at the same time the office of the deputy-president in the government. This brings us to the second feature of the transformation of the ANC: it is the fusion of the leading bodies of the party with, or rather their collapse into, the leading bodies of the government. The dictatorship of the office of the deputy-president over the ANC NEC, mirrors and is mirrored by the dictatorship of the office of the deputy-president over the cabinet, and over the parliamentary caucus. Once again, GEAR was imposed on the parliamentary caucus with no prior discussion of what was clearly an important statement of the direction of the government.

The government dominates the party

There is however just not a concentration of power in the office of the deputy-president of the ANC and in the deputy-president of the government. There is also the growing dictatorship of the government over the ANC. The masses voted the party of the people into government so that it can take hold of the government apparatus and use it in the interests of the majority of the people; what has happened instead is that the state apparatus is now using the party of the people to realise the interests of the minority of the people, the capitalist class. The case of GEAR has shown that it is not the party that develops policy for the government, but the government that develops policy for the party.

Such is the new ANC that has arisen as a result of its embracing of neo-liberalism.

It is time for a new party for the working class

The adoption of a neo-liberal programme by the ANC, and the role played by the SACP in these developments, will again raise the question of the need for a new party based on the socialist principles of the workers movement in South Africa. It is clear that the transformation of the ANC as an organisation, the undemocratic nature in which major policy and strategic decision are taken, means that for socialists it is time to admit that the “battle for the soul of the ANC” has been lost. It is therefore time to begin the long and hard task of constructing the foundations that will form the basis of a new working class party. The debates that took place immediately before and after the elections, in particular around the Socialist Conference, need to be revisited again. The issue of the regroupment of socialist forces is clearly on the agenda once again.

The first step in building these foundations is the struggle to break the alliance between the trade union movement and the ANC/SACP. The continuation of the alliance stands in the way of the political clarification of working class militants, and simply makes it possible for the ANC to attack the historical gains of the working class under the cover of “national democratic transformation”. But the mere breaking of the Alliance will not be enough. Socialists need to prepare themselves for and orientate towards the struggles that the working class will have to engage in in order to defend its gains from being attacked by GEAR. It will be those struggles that will form a solid foundation for a movement towards a new party.

The message that GEAR gives to the working class is clear: it is time for a new working class party.

"Ideas that enter the mind under fire remain there securely and forever." -Leon Trotsky

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