04.03.2010

Row over nationalisation

African National Congress Youth League steals language of left, reports Terry Bell

The question of nationalisation, especially of the mines, has become extremely confused, no more so than within the trade union movement. Understandably too, because very little of the argument seems to fit into the traditional frame of things.

And, as with many policy debates, a complex web of allegiances, loyalties and naked self-interest seems to have produced a cacophony that has drowned out rational voices. In the process, the critical questions of who supports what and why are distorted or even buried.

We have, for example, the controversial president of the African National Congress Youth League, Julius Malema, as the key proponent of nationalisation, a policy traditionally associated with the left. But Malema is an avowed capitalist who claims to be the target of a leftwing conspiracy to defame him.

Then there is one of the country’s first black billionaires, the mining magnate, Patrice Motsepe of African Rainbow Minerals, who has shrugged off nationalisation as acceptable. At the same time, the South African Communist Party, as the self-proclaimed vanguard of the left, although still a member of the governing alliance, has not opposed the government’s insistence that nationalisation is not on the cards.

Obviously, in the words of the Congress of South African Trade Unions, the whole question is “an arena of struggle”. But who is supporting which position and why is of critical importance.

There are obviously several agendas in play, not all of them spiked with obvious self-interest. In the first place, there is a knee-jerk, pro-nationalisation stance adopted by many trade unionists, who see state control as giving more policy leverage to workers, because governing parties rely on votes to stay in power and organised workers form a potentially powerful voting bloc.

This is a simplistic view that sees nationalisation, in and of itself, as a form of socialism and therefore beneficial to unions and the working class in general. The ANCYL appears to be targeting workers who may think this way.

But there are also trade union members who are aware of the history of nationalisation within various parliamentary democracies - including the racially exclusive system that operated as apartheid. They refute the claim that nationalisation equals socialism and point out that there was, for example, a greater level of nationalisation under apartheid than existed in ‘socialist’ Czechoslovakia.

Others who are wary of blanket calls for state control cite the experience of Zambia and the nationalisation of the copper mines of that country. The Zambian government bought out the mines at considerable profit to the mining companies, which were then employed, under contract, to manage the mines, since there was no capacity within the state to do so.

Under this arrangement, the companies had no financial responsibility and still managed to reap dividends through management fees. When the copper price fell, it was the state that bore the brunt of the losses and the lay-offs.

A similar situation applied with the nationalisation of the British coal mines in 1946. Miners proudly erected signs outside the mines proclaiming, “This mine now belongs to the people.” It didn’t, of course: it belonged to a state that required even greater profits in order to pay off the buy-out debt to the original mine owners.

Such arguments are advanced by admitted cynics within the trade union left. They also maintain that the major South African mining houses, having ‘internationalised’ their operations over the past 20 years, may be happy to dispose of direct control of local assets. Management contracts may then be available, not only to themselves, but to domestically based companies operating within the Black Economic Empowerment framework: formal ownership would change; the system would not. However, under state control, the prospect of prescriptive purchases could arise, justified both on patriotic and BEE grounds. This would open up a potentially large area of tenders for favoured local suppliers.

These are some of the undercurrents to the nationalisation debate that are causing confusion. They reveal how the pro-poor, pro-worker left may be inclined to be wary of forms of state ownership and why elements of the nationalist, pro-capitalist right may support what is still usually seen as a traditional policy position of the left.

The issue has also been further complicated by elements in the ANCYL coopting the term ‘socialisation’ from the lexicon of the left, where socialisation is usually seen as synonymous with worker, rather than state, control.