The curse of South Africa

Mineral wealth has distorted the economy for generations. Moeletsi Mbeki, brother of South Africa's

The conference of the African National Congress that was held last month was billed as a heavyweight contest between the party's president, Thabo Mbeki, and its deputy president, Jacob Zuma. The conference turned out to be much more than that. It was a complete rout, not only of the president, but also of his cabinet, the sitting national executive committee, and of Mbeki's economy team.

The December conference saw the ANC swing from the centre towards the left, if one believes the rhetoric. Jacob Zuma, the new president of the ANC, mobilised the support of the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP) in order to fight for leadership of the ANC.

The ANC is caught in a quandary. On the one hand, its members and leaders want to preserve the economic system inherited from the apart heid era so that they, too, can benefit from it through, for example, Black Economic Empowerment (an affirmative-action programme, initially designed by South Africa's big corporations, that favours the new black elite) and social grants from the government aimed at alleviating poverty. On the other hand, they hanker for change that will ameliorate the growing inequalities and pauperisation among black South Africans. They blame individuals within the organisation for not bringing about the socio-economic changes they would like to see, but do not dare to initiate themselves.

Much of the impetus behind the emerging instability in the ANC, however, is financial rather than ideological. The only solution would be for a leadership to emerge, from either within or outside the ANC, that has meaningful policies for building a more inclusive society in South Africa. Black Economic Empowerment and social welfare programmes do not fundamentally lead to such social inclusiveness. If anything, they entrench the inequalities inherited from the past and exacerbate new inequalities among the blacks.

The undoing of Pre sident Mbeki and his cabinet was that they failed to understand that, with Zuma's rise, a new phenomenon of populism had entered the ANC. They also failed to understand the potential of populism to appeal to the black working class, the black poor in general, and a wide array of disgruntled people associated with the ANC who felt excluded from the inside track.

Their mistake was to see Zuma as a paranoiac who didn't deserve to be taken seriously. Mbeki compounded this error by standing against the populist Zuma but refusing to engage with him in public debate. He thereby appeared to be afraid of Zuma. This encouraged Zuma and his supporters to press ahead with their campaign and, paradoxically, Mbeki's silence persuaded many ANC members that Zuma's claim of persecution was valid.

Placating the poor

South Africa is able to undertake both Black Economic Empowerment and large social welfare expenditures because of its vast natural resources, which are now selling at a premium due to the rapid industrialisation of the large countries of Asia. South Africa's fabulous mineral wealth has been seen as a blessing since the discovery of diamonds and gold in the 19th century. What gets overlooked is the curse that goes with vast natural-resource endowment.

Since the current commodities boom started in the late 1990s, the ANC government has been ratcheting up public spending on the welfare of the poor. Why? Out of the goodness of its heart, reply ANC leaders. Not so, say doubters: rather to placate the poor so that they do not rebel, but most importantly to buy their vote.

In his address to the ANC conference, President Mbeki went to great lengths to explain the good things the ANC government has done for South Africa's poor. He noted that the number of South Africans living below the poverty line fell from 51.4 per cent in 2001 to 43.2 per cent in 2006 and that the number of people receiving social grants increased from 2.6 million in 1999 to more than 12 million in 2006.

But are South Africa's poor happy and grateful to the ANC government? In theory they should be, given the largesse they are receiving. But judging by the support that Zuma and his communist and trade union allies have been able to mobilise among the poor against the mainstream ANC which runs the government, it appears South Africa's poor are very far from happy. This is where the resource curse comes in.

A country develops when it is able to harness the energies of its people and put them to productive use. There are, of course, exceptions to this rule. Oil-producing countries are one. For very little effort, petroleum-producing countries pump crude oil from the ground and sell it for fabulous prices to foreigners.

South Africa is similar to oil-producing countries in that it, too, has natural resources - gold, platinum, diamonds, coal, iron ore, and so on - that are valuable to foreigners, who are willing to pay South Africa top dollar for them. While it takes more people to dig out South Africa's minerals compared to those employed to pump up crude oil, mining is still a small employer. Despite employing very few people, mining, however, makes a huge contribution to the country's wealth, in that it accounts for more than half of export earnings. The value that the few people employed in mining produce far exceeds their income. The government, therefore, has large revenues from mining activity that it can redistribute to the rest of society that does not work in the mines. This is what is called a resource curse - governments of resource-rich countries think their people need not work and will be happy living off social grants.

That is precisely the trap into which the ANC government has fallen. At least a quarter of the South African population receives social grants that would not be possible if South Africa were not mineral-rich. Without mineral wealth to redistribute, the government would have to work harder and be more creative to find solutions to unemployment and poverty.

Resource wealth makes it possible for the government not to have to put an effort into redeveloping the economy to create more jobs, and instead it sustains the unemployed and their dependants with social grants.

But do such grants make people happy as the ANC government expects? Paradoxically, while social grants contribute to putting food on the table, at a broader level they make the recipients more insecure because they do not know when the government will withdraw or reduce the size of their grants. Second, the grants accentuate the humiliation that unemployed people feel from being dependent and unable to look after themselves and their families. Every time they collect their social grants, recipients are subjected to all manner of humiliations by the government officials who administer the system. The rest of society stigmatises recipients as idle, worthless and parasitic.

What do South Africa's subsidised and marginalised people do to regain their self-respect? They support demagogues who claim that they, too, are marginalised, and therefore want to replace the ruling elites with people-friendly governments. This, in a nutshell, is what happened at the ANC conference and in the months leading up to it.

Zuma, with the support of Cosatu, the SACP and the ANC Youth League, ran a campaign that told ANC members, most of whom are poor, that he, like them, is despised and marginalised by the elite who run the party and its government. Zuma argued there was a conspiracy by the elite to ensure that he, and poor people like him, are kept away from power and therefore do not benefit from their struggle against apartheid.

Zuma's message resonated with many trade unionists, such as the general secretary of Co satu, Zwelinzima Vavi, who grew up as a farm labourer and worked his way up to where he is today by fighting against discrimination and humiliation under apartheid.

Winners and losers

Did all the passion and recrimination at the ANC conference produce winners and losers? Leaving aside the rather tarnished image of the party, a few bruised egos and what will turn out to be short-lived elation by others, the conference, viewed in the context of the country's future, reproduced the stalemate into which the ANC has been locked since 1994. January 2008 is, therefore, the month in which the country has gone back to business as usual.

As for Zuma - in reality, his was a pyrrhic victory in a phoney war. In the coming months he will be back in court facing corruption charges that could lead to his being imprisoned for many years to come. The case is scheduled to start in August.

The giant trade union federation, Cosatu, which devoted so much of its energy and resources to Zuma's campaign, has come out of the melee a loser. Its leaders are at each other's throats and there were no changes made to the ANC's conservative economic policies, such as the independence of the Reserve Bank, about which Cosatu has been unhappy for many years.

Cosatu ended up as cannon fodder at the hands of disgruntled ANC and SACP politicians who used it as a proxy to fight their battles. Ultimately, under a populist regime, the masses are the main losers.

Moeletsi Mbeki is a deputy chairman of the South African Institute of International Affairs, an independent think tank based at the University of Witwatersrand in Johannesburg

This article first appeared in the 21 January 2008 issue of the New Statesman, Art is the new activism

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Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

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