Ending Economic Apartheid: Is Labor Capitalism Risking the Legacy of South Africa's Liberation Struggle?

By Gevisser, Mark | The Nation, September 29, 1997 | Go to article overview

Ending Economic Apartheid: Is Labor Capitalism Risking the Legacy of South Africa's Liberation Struggle?


Gevisser, Mark, The Nation


On an April evening almost exactly three years to the day after South Africans voted Nelson Mandela into power, you could watch, at a black-tie dinner in Johannesburg, the dynamics of South African power relations change before your eyes. The dinner celebrated the deal in which Anglo-American--the vast mining house that rules South Africa's economy--sold a controlling share of Johnnic, a $2 billion company with blue-chip industrial holdings, to a group of black businesses and trade unions called the National Empowerment Consortium (N.E.C.), led by Cyril Ramaphosa.

"I think," said Anglo-American's Michael Spicer when introducing Johnnic's new head, "we can call you chairman Cyril rather than comrade Cyril." Replied the former unionist who led the mineworkers' charge against the company a decade ago: "It's wonderful to have Anglo as a minority shareholder!"

Ramaphosa, the man most responsible for organizing the working masses into the collective action that brought apartheid to its knees, now leads another charge: an advance, by the mushrooming black middle class, on the commanding heights of the economy. The corporate sector is crowing. "Cyril Ramaphosa was the man who built the unions in the eighties," one very senior Anglo-American executive tells me, "and he'll be the one to break them in the nineties."

The reason: Sitting on the Johnnic board with him are several leading trade unionists. A report in "IR Data," an influential South African industrial relations newsletter, explains it succinctly: "We should expect to see unions who buy into the market beginning to temper militancy, so as not to hurt the system from which they have gained their enhanced influence and wealth." The corporate sector and the market-oriented African National Congress (A.N.C.) government see this development as the potential salvation of the economy--given that one of the biggest disincentives for world capital to invest in South Africa is the militancy of its labor movement.

"I went to the union and said, `End the criticism!"' acknowledges Marcel Golding, Ramaphosa's former deputy at the National Union of Mineworkers (N.U.M.) and one of the pioneers of labor capitalism. "The purpose of a democracy is to improve opportunity and the prosperity of ordinary working people."

In South African politics and government, blacks now rule, incontrovertibly. But despite the fact that blacks are more than 80 percent of South Africa's population, black companies control only 8 percent of the equities listed on the Johannesburg Stock Exchange (Anglo-American alone controls 24 percent). If this seems unjust, it must be borne in mind that, only two years ago, black South Africans controlled less than 0.3 percent. Black economic empowerment is not just a trend, it's a boom.

Perhaps the single most visible change in South African society since the transition to democracy has been the rapid emergence of a black bourgeoisie. Call it neoliberal or call it pragmatic: The A.N.C.'s Growth, Employment and Redistribution (GEAR) strategy has embraced the market economy as the National Party never did, and the A.N.C. is privatizing the assets that its predecessors so jealously guarded. In its twilight, apartheid attempted to establish a black middle class as a buffer between itself and the hungry masses; the A.N.C. sees this class as the salvation of those masses.

Central to the "redistribution" arm of government policy is an affirmative-action program for the awarding of state contracts: To win these, you must either be black or in partnership with black entrepreneurs. And so white-owned enterprises that want any piece of the action--privatized airlines or radio stations, tenders for road-building and financial and service contracts--have had to make key alliances with what is now known in the South African vernacular as "empowerment partners," the latest euphemism for blacks. Capital has gladly "unbundled" some of its assets to these new black capitalists, ostensibly to "diversify" the economy but actually to make itself more attractive to the new ruling class (and, of course, to make money off the interest from loans that its financial institutions give cash-strapped black entrepreneurs to gear their investments). …

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