The PP must be held to account – Solly Mapaila

SACP 1st DGS notes that narrow nationalism derailed state transformation and economic empowerment

Address by SACP First Deputy General Secretary, Cde Solly Mapaila, to the Nehawu National Policy Conference, Boksburg, 26 June 2019

Address to the National Policy Conference of Nehawu

26 June 2019

Allow me first and foremost to covey revolutionary greetings from the Central Committee of the SACP on behalf of the entire membership of the Party.

We understand that the ambassador of Morocco will be coming to South Africa to represent Morocco in the country in the coming period. We must prepare a massive protest action against the decision, adopted by the African Union, to re-admit Morocco into its ranks while Morocco is still occupying Western Sahara. We stand against Morocco’s occupation of Western Sahara and pledge our solidarity with the people of Western Sahara.

This National Policy Conference is convening at the time when capitalism and its imperialist regimes are poisoning and contaminating the ecosystem and destroying the possibilities of life on earth. The United States is presently leading an onslaught against Left or Left-leaning governments in Latin America.

As if that were not enough, the Trump administration of United States imperialism is pushing the globe towards the brink of war. The manoeuvres include violation of international law and the territorial integrity of other countries. It was in this context that Iran responded by shooting a United States drone.

The United States is concerned about losing its imperialist hegemony. As part of its manoeuvres, it has launched a frontal attack, under the pretext of national security, against companies such as Huawei of China that have taken a lead in certain segments of key technologies of the future.  

The SACP is against imperialism in all its facets. We strongly condemn war mongering and all imperialist manoeuvres by the United States and its allies. The progressives and revolutionaries of the world need to unite and intensify the just struggle against imperialism and war.  

We pledge our solidarity with the people of Venezuela, Palestine and other countries that are facing militarist and other forms of imperialist aggression. In this regard, we need to appreciate that the Cuban revolution, its socialist construction, needs to be defended by all progressives and revolutionaries of the world.  

Before we proceed to the policy issues highlighted in your letter of invitation, we want to make use of this opportunity to pledge our solidarity with the workers who are facing the threat of retrenchments at MultiChoice and in other sectors of our economy. We must all unite against the job-loss blood bath. We need maximum levels of unity to confront the attack.

Let us construct a national democratic developmental state

According to the invitation we received, the purpose of this National Policy Conference is to discuss the union’s draft strategic policy framework review with the objective of coming up with a new ten year rolling strategic plan. The invitation in particular underlined that the conference will discuss the notion of a developmental state in order to define the posture of the union in relation to the sixth democratic administration as elected and constituted in May 2019. Within this framework, our input is concretely anchored in an assessment of some of the key features that rose to dominance in our state organisation and state-society relation. While broadly covering the entire post-apartheid period, we attach greater emphasis on what happened in the last decade. We start by engaging with the notion of the developmental state theoretically.

The notion of a developmental state can at least be traced to, released one year after our 1994 democratic breakthrough, Peter Evan’s Embedded Autonomy: States and Industrial Transformation. The focus of the study was on the so-called newly industrialising countries, but broadly defined as including those developing countries with relatively large enough political economies if not relatively advanced enough to support a full range of industrial transformation. The definition of the developmental state is therefore based on state involvement in enabling and facilitating industrial transformation, and by extension the diversification and expansion of industrial production. The main unit of analysis in the study was the relationship between internal state organisation and its impact on development – in terms of which industrial transformation was considered a key element.

Evans developed his theory of the developmental state after engaging with existing literature and conducting research. Before him, Max Webber had argued for highly selective meritocratic recruitment into the apparatuses of the state, which, he asserted, should be insulated from society. Long-term career rewards, he further argued, create commitment and a sense of corporate, what we refer to as organisational, coherence of the state.

While endorsing recruitment on the basis of merit and the associated skills retention principle, Evans differed with Webber on the notion of insulating state apparatuses from society. He instead argued that the apparatuses of the state are, on the contrary, embedded in a concrete set of social ties that binds the state to society and provides institutionalised channels for the continual negotiation and renegotiation of goals and policies.

According to Evans, a state can therefore be defined as a developmental state only if it combines embeddedness, as just defined, and autonomy in terms of its professional and technical capacity. It is this “embedded autonomy” – which he also referred to as an apparent contradictory combination of organisational coherence and connectedness – that provides the underlying structural basis for successful state involvement in industrial transformation.

Let us now embed the notion of the developmental state in the materialist conception of history and dialectics. It is important to underline the fact that Evans was right, as already indicated, in differing with Webber’s notion of insulation. However, in a class divided society, you cannot talk only about state apparatuses being embedded in a concrete set of social ties that binds the state to society and provides institutional channels for the negotiation and renegotiation of goals and policies.

The state as we know it is not a classless institution. Neither is it, nor can it ever be insulated from class conflict. The same applies to its social ties in society. The state arose from class divisions and contradictory class interests which are, in turn, firmly embedded in the economy. You therefore also have to take into account the fact that society is not an abstract ideal but is concretely constituted by classes which themselves are further divided into strata, and is characterised by contradictory interests not only between classes but frequently between different strata within the same class.

While the roots of the modern state lie in the earlier development of the capitalist mode of production and its worldwide expansion as in our case, both the state and control over the state are a contested class reality. It is in this context that others argue that a developmental state must be embedded in capital, and by implication in the interests of the capitalist class. This is what they are referring to when they portray the state as the universal agent of societal interests. Theirs is therefore an agenda to deepen the sway of the capitalist economic ruling class on the state and society at large.

We cannot lose sight of the fact that a number of the so-called developmental states were not democratic. As the SACP we therefore stand for a national democratic developmental state. To be such, a state must be embedded in the interests of the class majority – that is the working class – and must be capable of meeting their needs. This is what we mean whenever we refer to a national democratic developmental state. If working class power and hegemony are not built, consolidated, strengthened and continuously mobilised as a pillar for the national democratic developmental state that we seek to achieve, the working class will not win any strategic battle. The least it will win are strategic promises.  

In our case, radical reduction of the persistently high levels of systemic class, racial and gender inequalities, unemployment and poverty, as well as uneven rural-urban development, is an immediate developmental imperative for the working class. Ultimately we must eliminate these problems and their underlying system of capitalist exploitation in order to become a prosperous society. Therefore the national democratic developmental state must be buttressed by working class power, hegemony and popular mobilisation. This requires participatory democracy, including in national, provincial and local planning processes.

For instance, a national development plan can only such when the whole population has democratically been mobilised to participate in its formulation. Otherwise it becomes merely a government development plan. Related to this point, in our May 2013 discussion document, “Let’s not monumentalise the National Development Plan”, we concluded that the NDP was neither really a plan nor still less a fit-for-implementation plan but rather a broad vision open to necessary criticism and engagement.

Despite the fact that it was agreed that the NDP was not cast in stone and therefore that it was subject to review, it has never been reviewed since the Alliance Summit declaration of September 2013 directed that the concerns raised by the SACP and Cosatu with certain aspects of the NDP, especially the economic chapter, must be addressed. We cannot continue any as the Alliance as if this declaration is non-existent. 

Being a progressive class oriented trade union demands of Nehawu that it must take keen interest on the broader class realities of the state, beyond the confines of the employee-employer relationship. For us as the Communist Party, a national democratic developmental state should represent an intermediate advance from the system of capitalist exploitation, leading to the completion of the national democratic revolution and towards the fulfilment of the historical mission of the working class.

Your reflections on the national democratic developmental state should therefore cover the important question of the way those working in the public sector in practice conduct themselves over and above the professional and technical capacity required of them. The quality of public service in a national democratic developmental state, whether in education, health, administration, or in any other government service, department or state institution, must come second to none.

This will instil confidence in our people, the majority of whom is the working class and poor, not only in the national democratic developmental state that we seek to construct but also in public servants. Here there is a concrete connection between the community struggle for development and trade union organisation in the public sector. It is also important to emphasise that a national democratic developmental state requires adequate provision of resources needed to perform public service functions and fulfil its developmental programme.

While the immediate task of a national democratic developmental state is to drive national production development in the context of industrial transformation, its role is however much more than that and that is not an end in itself. Its policies – including but not limited to society-wide democratisation, not least the economy, therefore industrial strategy, national health insurance, curriculum transformation and progressive rollout of free education to poor and working class households, as well as government services that work effectively and satisfy the people – are aimed at improving the quality of lives of the people. They are anchored in serving the people with complete sincerity and commitment.

As the SACP, we urge your National Policy Conference to also look back at the regressive tendencies that held us up during the last 25 years and more so in the past decade vis-à-vis the construction of a national democratic developmental state. Accordingly, we now turn our attention on “corporate-capture” and the pitfalls of the narrow nationalism, a tendency concerned with empowering individuals from elitist groupings to make it on to capitalist ownership structures in the name of the entire population of the formerly oppressed.  Before we proceed on this score however, we must underline that, in contradiction, a national democratic developmental state advances the economic empowerment of every person with collective prosperity – that is its goal – a condition for the empowerment of all.

Narrow nationalism derailed our state transformation and economic empowerment towards a predatory state. As Evans state, a predatory state extracts at the expense of society, undercutting development even in the narrow sense of capital accumulation. It lacks the ability to prevent individual incumbents from pursuing their private interests through state authority. In this scenario, personal ties become the source of cohesion, and individual maximisation takes precedence over the pursuit of collective societal goals.

Ties to society, especially the broad masses, and therefore in our case connections between the motive forces of the national democratic revolution and state organisation, were replaced with ties to individual incumbents, in particular the powers that be and their networks of political factionalism and economic patronage. Finally, the parasites who achieve control in a predatory state, as Evans succinctly put it, plunder without any more regard for the welfare of the citizenry than a predator has for the welfare of its prey.

The strategic levers that we need were hollowed out, looted and almost completely destroyed, meaning that one of our strategic tasks of state transformation, of the construction of a national democratic developmental state, is to revitalise them.

Let us now go back on this painful journey to see how the pursuit of the economic empowerment of a few ended with the corruption of “state capture” and the disempowerment of the majority. We must emphasise that it is the working class and the poor who bear the brunt of this counter-revolution. Denel, SABC, Eskom, Transnet, Prasa, the Central Energy Fund, PetroSA, Necsa, Sars, SA Post Office, SAA, SA Express, other public entities and municipalities among other state organisations, were plunged into crisis or driven to the brink, to the very edge of collapse.

State capture” and other forms of corruption

The most urgent task facing the ANC-led government, with the ANC in alliance with the SACP, Cosatu and Sanco within the framework of an Alliance reconfiguration process, and following the May 2019 national and provincial elections, is to intensify the national imperative of dismantling the networks of “state capture” – and decisively so!

The notion of “state capture” has acquired considerable currency in South Africa. We now have a Commission of Inquiry, first called for by the SACP, to investigate the corruption. The SACP played a leading role in exposing “state capture” while clearly understanding that the term “state capture” was a short-hand term for popular use. We have in fact preferred to use the term “corporate-capture”. This is what we did when we first introduced the characterisation into our national discourse. We not only did so to express our deep concerns about what had been entrenched as a systemic corruption. We did so also calling for, and at same time initiating – and developing a leadership role to push – mobilisation against “corporate-capture” as a broad category of a problem we identified.

There are at least two elements about the characterisation “corporate-capture”.

The first is that it exposes the class character and interests of the capture, in terms of which the concept the corporation refers to the dominant feature of private enterprise. In other words, the capture is part of the machinations by certain sections of private enterprise in pursuit of, and in competition with other sections of capital for dominance and monopoly. The legislative, regulatory and policy space of the state, the associated governance exercise, decision-making authority and procurement budget are the subjects of the capture. The ultimate class forces of the capture are therefore bourgeois in class character. In the same vein the venal, those who become captured, or either even bought by the capturers or sell out our revolution to the highest bidder, are driven by, and seek to secure their private interests. To this end, venality is the content of their private enterprise and gains hold in their character, in the same way as the capitalist represents capital personified.    

The second element that the broader characterisation “corporate-capture” – which is without the word “state” – expresses is that the capture is not limited to, or does not necessarily start and end in the state. The capture takes place in political and other forms of existing social organisation. It is to be found, therefore, not only a governing party, but also in other parliamentary parties, and in trade unions, non-governmental organisations or “civil society organisations”, and a wide range of other forms of organisation that can be exploited to exert pressure on the state to push legislation, policies and decisions that ultimate favour certain private interests. In trade unions, trade union resources are also the subject of the capture. Business unionism and outsourcing in trade unions have become the hotbed of “corporate-capture”, factionalism and competing factions.

Dealing with “corporate-capture” to dismantle its networks therefore requires a wider array of strategies that go beyond only the state as the subject of the capture. In addition, trade unions located in the public service, that is, in the state, need to look back on how the corporate state capture happened in this sphere of their very structural location and what they can do to contribute to the national imperative of dismantling its networks and ensure that it does not recur. Without this clarity of task it is going to be difficult, if not impossible, to develop any meaningful contribution to state transformation and the construction of a national democratic developmental state.      

We indeed have also sometimes preferred to speak of “corporate state capture”, or “corporate capture of the state” where state authorities are the subject of the capture. In either the case of the characterisation “corporate state capture”, that is “corporate capture of the state”, or the short-hand term “state capture”, we have been referring to something relatively specific to the South African reality. Accordingly, the term “state capture” refers to the forms of corruption mainly associated with the reality of primitive accumulation involving the courting, capture and exploitation of state authority as an enabler or facilitator.

Initially, state authority was used to enact a narrow black economic empowerment (BEE) policy and enforce related BEE share-holding quotas in established corporations. The BEE share-holdings were typically “leveraged” – that is indebted, with repayment based on the assumption that accruing dividends over a period of five or so years will pay off the debt. By 2010, it has been estimated, BEE share-holders had acquired R500-billion, by far more than the resources in other key areas of socio-economic transformation such as low-income housing and land redistribution. Most of this money was not looted from the state or public entities but came largely from privately held, corporate controlled surplus that was diverted into indebted shares rather than into job-creating productive investment and public assets or services.

Although it was largely “legal”, the phenomenon represented a clear class choice that was unfavourable to the working class and popular masses, and therefore to the majority of blacks despite the fact that it was couched, in general, as black economic empowerment. Established monopoly capital, with varying degrees of moaning, played along with this BEE primitive accumulation, seeing it as a better way of managing change without having to substantially change. The new BEE elite, who appeared on the scene without any capital of their own, were quickly absorbed, usually as passive and junior partners, into the life-styles of the established capitalist class.

The ethos of primitive accumulation filtered all the way down, in terms of political organisation, to the community, to the branch level, with petty accumulation for micro-entrepreneurs. Steadily, from the mid-1990s there was a political shift from popular struggle to a narrow electoralism, and then, in a further debasement, to winning elections in order to occupy office in order to reproduce and expand primitive accumulation. All this was driven in the name of Africans in particular and black people in general, of whom, especially the working class, remained under the yoke of capitalist exploitation and the super majority of the poor and the unemployed. The capitalist exploitation was not addressed. On the contrary, it deepened under neoliberal structuring.

The first generation of the narrow BEE trajectory was therefore largely played out within the laws of the capitalist system in general and its neoliberal structuring. Established monopoly capital often actively promoted this agenda and saw it as a key means to advance its wealth accumulation interests against radical threats from the Left, mainly the SACP and Cosatu as well as its affiliates. However, for many reasons, this agenda proved unstable and unleashed many contradictions and rivalries. Not all aspirant capitalist strata could be accommodated within the 1996 GEAR class project, and therefore within Mbeki’s inner BEE circle.

And then enters “state capture”, a phenomenon that has caused enormous damage to our economic infrastructure, the finances of state-owned companies and broadly the South African economy. This has further weakened our capacity as a country to face the increasingly hostile global economic environment due to the compromised nature of some of our instruments for economic transformation like state-owned enterprises.

What we describe loosely as “state capture”, is therefore a second wave of primitive accumulation based on the exploitation of state authority and, associated with it, organisational capture. But this second wave no longer played within the parameters of a “capitalist rule of law”. It involved direct looting, or expropriation, of public resources, and particularly of key state-owned enterprises. This was aided and abetted by gangster or lumpen type capitalists (Brett Kebble, Agliotti, the Guptas, the Watsons, Mazzoti, etc., some of them as alleged at the Commission of Inquiry into State Capture and other as previously exposed).

The perversion also involved foreign controlled multinational corporations (KPMG, Bain & Co., McKinsey & Co, SAP, Bell Pottinger, etc., as also alleged at the Commission of Inquiry into State Capture but also in other inquiries). But this time it was no longer in the interests of capital as a whole, or monopoly capital in general – quite the opposite. While for the “state capture” networks, looting the likes of Eskom and Transnet into near-death experiences was their core business, many sections of established capital, and indeed the broader South Africa community – not least the working class and poor – require functioning, and mostly, publicly supplied energy and logistics systems.  

This is why it has been possible, and also essential, to build a multi-class patriotic front of forces, including the working class, against “state capture”. This broad anti-state capture front – within which the SACP has played (and must continue to play) a leading role – has helped to have Zuma resign as President. Cosatu played a key role in this regard. The mobilisation has helped to bring the country back from the constitutional and economic brink upon which we were teetering. But no doubt the dangers remain.

The working class and other popular strata need to guard against the danger of a vulgar “instrumentalism” that might adhere to the notion of “capturing the state”. The state, in its ever shifting dynamic configurations in a class divided society, is not simply a neutral instrument that can be wielded by any one class without contestation, depending on who has a hand on the assumed “commanding levers”.

Particularly in capitalist societies with a multiparty parliamentary democracy, there are always possibilities for class, and factional, interests to penetrate and interact within the state, with capitalist interests in their variety always likely to be dominant if unchallenged; we say this not losing sight of, and therefore taking into account, the fact that other class and political forces, both domestic and foreign, do play out such a politics through the creation of “non-party-political”, non-governmental organisations or “civil society” formations and, over and above that, with certain sections having foreign sources of funding or at least its co-ordination. 

In contradiction, ours as the SACP, as our history demonstrably makes clear, has consistently been against the notion of the “capture of state power”. Our strategy, as we state in our Party Programme, “The South African Road to Socialism”, is to build working class and popular hegemony and advance transformational struggles to democratically assert working class and popular hegemony over all key sites of power, including but not limited to the state.

While vigilantly combating the networks of the “state capture” fight-back, the SACP as well as the working class as a whole, needs to build and deepen unity to contest the struggle within the anti-capture front. But does the gathering defeat of the “state capture” platform simply lead to a return to the neoliberal economic policy regime of the 1996 GEAR class project? Or do we use it to advance along the path of a serious national democratic transformation?

No to neo-liberalism, no to fake radical economic transformation

There can be no doubt that the emerging, post-Nasrec political and economic situation will be highly contested. Two problematic social forces can already be discerned as engaging in this contestation. The first is neoliberalism’s conservative tendency that seeks to turn the “New Dawn” into a regression to the past era of the 1996 GEAR class project. The second is a bruised, but not yet defeated, lootist faction seeking to defend or justify the brazen smash and grab state contracts and/or associated kickbacks accumulated by state capturers as well as their patronage networks. This lootist faction employs spurious radical economic transformation (“RET”) and associated populist rhetoric to advance its agenda, including a fight back.

The working class as a whole must say a categorical NO to both neoliberalism’s conservative tendency and spurious “RET” tendency. However, exposing and tackling the spurious “RET” agenda and its fight back must on the one hand not be allowed to be hijacked and diverted towards support for, on the other hand the arrogant know-it-all neoliberal conservatives and their advocates.

Take the debate on the Reserve Bank and the role it should play in the national search for alternatives to address and ultimately solve our economic problems, especially the crisis level structurally high unemployment rate. Neoliberalism’s conservatives are for instance oblivious to the necessity to have the Reserve Bank’s mandate explicitly in the interest of transparency and accountability target employment growth. Defending the Reserve Bank from state capturers clearly does not mean we must go back to the disastrous neoliberal policy of the 1996 GEAR class project.

We have an election manifesto which was drafted in consultation with all Alliance components and was endorsed by other progressive formations, individuals and the majority of the electorate on the ballot. The manifesto provides guidance on the direction that the sixth democratic administration should take.

The Reserve Bank’s mandate and conduct of monetary policy are not beyond constructive debate and do not fall outside the sphere of democracy. The arrogance and hysteria on display from neoliberalism’s conservatives is out of order. The talk of “the barbarians being at the gate” runs the danger of closing down any constructive and necessary discussion on macro-economic policy and the national developmental role that the Reserve Bank should be playing.

The SACP also wishes to dissuade and caution officials in state institutions to avoid any overreach. For instance in terms of the Public Finance Management Act, it is the responsibility of the National Treasury to co-ordinate macro-economic policy. In terms of our Constitution, it is the responsibility of the democratically elected Parliament functioning in the context of participatory democracy and therefore proper consultation, to legislatively determine the powers and functions of the Reserve Bank, as is the case with the establishment of the National Treasury and its role. The Reserve Bank must function within this constitutional framework.

To conclude on this score, the importance of Alliance reconfiguration to ensure policy coherence and maximum Alliance participation on all key questions cannot be overemphasised.

Necessity to protect the image and dignity of the Office of the Public Protector

We want to call on the Public Protector to not allow that important office to be used as a hired gun of the corporate capture agenda.

The SACP fully supports the existence and independent operation of the Public Protector as our Constitution’s Chapter 9 institution. During the drafting of the Constitution by the democratically elected Constituent Assembly, the SACP fully supported the establishment of the Public Protector as one of the guarantors especially of the interests of the workers and the poor from the excesses of the exercise of state authority. Unfortunately, the incumbent Public Protector, instead of being pre-occupied with defending the poor and vulnerable against such, has become an instrument of the better off in society to fight political and other battles.

It is for these reasons that the SACP had to express its serious concerns about the scathing court judgements against the current Public Protector, Busisiwe Mkhwebane. On 9 June 2019, the Central Committee of the Party publicly communicated its decision that it was imperative for Parliament to carry out an inquiry into her suitability to hold office. What do you find in the judgements?

This is what you will find: that she “would not have brought an impartial mind to bear on the issues before her”; that she acted disingenuously when she attempted, before the court, “to pass off” her “remedial action as a mere recommendation”; that she presented “superficial reasoning” and made an “erroneous finding”; that she acted in a “procedurally unfair” manner; that “it has been proven that” she “is reasonably suspected of bias”; and so on. One of the judgements concludes: 

In view of our conclusion regarding the unlawfulness of the remedial action as well as the reasonable apprehension of bias, we do not deem it necessary to deal with all the other grounds of review as we have found that the Public Protector was biased and the remedial action should be set aside… The court has found the remedial action to be unlawful and that there is a reasonable apprehension of bias. The court further finds no reason to remit the report. It is clear that the Public Protector unlawfully, ultra vires and breached several provisions of PAJA [Promotion of Administrative Justice Act].” 

In “the circumstances”, the court concluded that “it would be untenable to remit the Report to the Public Protector”.

Imagine, for second, what remedial action she would have prescribed herself in the case of a person against whom she would have made such findings?

No state authority is above the law. All those who have been conferred constitutional powers and functions but act unconstitutionally and unlawfully in a manner just described from the court judgements against the Public Protector must be held to account for their actions. 

Issued by the SACP, 26 June 2019