Lucien van der Walt, 2015, "Beyond ‘White Monopoly Capital’: Who owns South Africa?," South African Labour Bulletin, volume 39, number 3, pp. 39-42. ON POLITICS AND ECONOMICS Beyond ‘white monopoly capital’ Who owns South Africa?

The debate on ‘white monopoly capital’ has some blind spots as it omits the role of the state in ownership and control of the means of production. The state also controls the means of coercion and administration, writes Lucien van der Walt.

outh Africa today is a morass political economy associated with or the fact that almost every single of wretched inequality, racial the 1990s transition – notably, the cabinet minister is a shareholder in Stensions and class conflicts. denationalisation of the economy one or more companies. It is not held Despite real gains in basic rights with massively expanded foreign together by the corruption of a few and welfare, and the abolition of ownership, and a growing black people, or by incorrect programmes, apartheid laws, its transition remains private corporate leadership – and not by poor state leadership, not limited and frustrating, 20 years on. also rests upon a very weak analysis even by the ANC, all of which can be Nelson Mandela’s South Africa is of the state apparatus – both in terms changed. profoundly better than P.W. Botha’s, of its class character and economic The state can no more be wielded but is no paradise; and the legacy of power. Claims that blacks have against private capitalists than one the past remains everywhere in the political power, not economic power, brick in a wall can fight another present. or that white private corporations – and capitalism and the state can For many in the unions, Marxist, have a stranglehold over the economy, no more lose their character of social democratic and nationalist remove the black economic and exploitation and domination than left, the blame lies primarily with political elite from the picture, erasing a wall can become an aeroplane. ‘white monopoly capital’, i.e. the giant it from strategic considerations. Efforts to capture the state can, at apartheid-and segregation-era private Existing alongside vast private most, lead to a few people, mainly corporations that remain central. companies – not all of which fit the party leaders, joining the ruling class These are seen as the main obstacle label ‘white monopoly capital’ is – nothing more. The strategic task to radical change, and the African another massive economic force, the must then become one of building National Congress (ANC)-led post- state apparatus – the biggest single a movement outside and against apartheid state’s main failure is seen employer, landowner, income earning the private and state corporations as failing to tackle ‘white monopoly institution, and by any reasonable and the state more generally, by the capital’. The key strategic perspective measure, the dominant ‘monopoly broad working class (including the then becomes changing the state, the capital’ in electricity, rail, roads, unemployed), which is both victim better to intervene, whether through forestry, television, sectors of banking, and potential destroyer of the system. higher taxes, or a ‘developmental higher education and elsewhere. The black elite, whether in the state’, more black capitalists, some South Africa, I argue, is controlled state, or in the private sector, is an nationalisation etc. This is really what by a single ruling class, divided into active part of this system, and its lies at the heart of calls for a ‘second two sectors: a (largely white) private beneficiary – not a bought set of transition’ (by sectors of the ANC sector elite, and a (largely black) state black faces, not a ‘petty bourgeoisie’, and the Congress of South African elite. This is united at both a deep not a ‘comprador’ layer, but a Trade Unions (Cosatu)), or ‘socialism’ structural level, through common powerful sector of the ruling class, (by sectors of the National Union interests and interdependence, and in its own right, with its own agenda. of Metalworkers of South Africa at a more conjunctural level, by It cannot form a reliable ally of the (Numsa), the United Front (UF) and current neo-liberal programmes and working class, partly because its Economic Freedom Fighters (EFF). alliances, among which note can be class interests and very existence But this analysis and strategy, I made of the Growth Employment and rest upon the ongoing subjugation argue, ignores major changes in the Redistribution (Gear) Strategy (1996) of the working class, partly because

June/July 2015 39 it is part of an elite pact of class Anglo sold many of its holdings The ANC continued these, but also domination with private capital, and in banks and retail, in favour of a opened the economic gates on a partly because its own agenda – mining focus. They also globalised scale unseen since the early 1920s. survival and expansion – must clash aggressively. For example, Anglo It became more attractive to invest – with working-class interests. moved its main share listing from the sometimes, some would say, primarily, JSE, to the London Stock Exchange for short-term profits and speculation Changes in capital structure in 1999. Its single biggest current – but it also became easier: notably, The left and labour focus on ‘white project is Brazil, not South Africa. from 2004, foreign companies could

ON POLITICS AND ECONOMICS ON POLITICS monopoly capital’ has the very real list directly on the JSE. merit of revealing both continuities Denationalisation A major effect is that while South with the past, and part of the The second is that the South African African companies controlled 83.1% present problem – but it sidesteps economy has been progressively in 1987, in 2012, foreign investors massive changes in the private sector, ‘denationalised’ from the 1990s. The held 37% of all shares, and 43% of including denationalisation and Black Big Four that dominated the JSE were industrial shares, on the JSE writes Economic Empowerment (BEE) and all South African-based companies, Gillian Jones. While this ‘foreign’ ignores the economic size and power albeit owned by white South Africans. ownership does include some ‘off- of the state sector. The onset of neo-liberalism in the late shored’ locally-based capital, i.e. And, certainly, it is correct that years of apartheid under the National South African capital, reentering via ‘white monopoly capital’ has played a Party (NP) (from 1979) and the channels elsewhere, the change is central role, both past and present. By acceleration of neo-liberalism under significant. 1987, over 83.1% of all shares on the the ANC (from 1993) changed the So, while 10 companies control Johannesburg Stock Exchange (JSE), picture. 50% of JSE capitalisation, a substantial now the Johannesburg Securities Tough capital controls that part of this ownership is not Exchange were owned by four giant previously made it almost impossible traditional ‘white monopoly capital’, companies, with Anglo-American for South African companies to move but also includes off-shored semi- (despite the name, a South African most of their assets outside the South African firms, South African- company) owning 60.1%, followed by country despite political turbulence based firms, and other foreign firms, Sanlam at 10.7%, argues Cosatu. With and economic decline, writes David argues Roger Southall. the 1990s transition, the Big Four Kaplan, forced ‘white monopoly were not subject to any penalties, capital’ to develop into giant BEE and state capital were largely exempted from the conglomerates within the country. A third change is that, despite Truth and Reconciliation Commission Despite limited exports of capital (white) private corporate hesitancy (TRC), and benefited massively from – Anglo had more investments in on BEE, around a quarter of JSE- post-apartheid economic policies the USA than Unilever, according to listed company directorships are and state contracts (for example, one estimate, argues Duncan Innes held by people of colour (‘black’ construction in preparation for the – the strict capital controls meant in South African law) according to 2010 World Cup). Anglo evolved from being a mining M. Sibanyoni writing in the City In all parts of the private sector house to having massive holdings in Press, with the proportion of senior of the economy, the pattern of a agriculture, industry, retail and media. managers in the private sector at few giant companies, persists: one The existing monopoly structure in 32.5% (2008), adds Southall. effect is persistent price-fixing by mining (and state industry) was now Now, directorships give real cartels, exposed in sectors ranging systematised widely. control of means of production, as from concrete to bread, by the It was ANC-led liberalisation of well as economic ‘ownership’, i.e. country’s Competition Commission capital and other controls that the ability to make key decisions over recent years. These large private allowed Anglo to relocate its primary on use, even if the directors are not firms – mainly rooted in the pre-1994 listing to London in the 1990s. Looser themselves majority shareholders. period, historically white-owned and regulations were part of growing Given that 37 to 43% of JSE dominated, with a corporate culture efforts to position South Africa as shares are not owned by South marked by the apartheid era – may an attractive ‘emerging market’, and Africans, white or black, it is not correctly still be termed ‘white growing global flows of foreign entirely obvious how much this monopoly capital.’ investment have seen the JSE change. ‘black’ control is in South African Several developments, however, The NP had pioneered neo-liberal companies, although a substantial complicate the picture. The first is measures in the 1980s, mainly proportion must be, since foreign that in the 1990s ‘white monopoly through austerity, sales of major state investors are exempted from BEE capital’ generally ‘unbundled’, i.e. companies like Iscor and Sasol, and commitments like share deals and focused on one industry. For example, tax reforms. affirmative action.

40 SA Labour Bulletin Vol 39 Number 3 ON POLITICS AND ECONOMICS

Finally, the state is the elephant in (e.g. Eskom, South African Airways generally (e.g. political stability) and the economic room. Standard images (SAA)), state facilities (e.g. the water for specific categories (e.g. Afrikaner of the post-apartheid economy grid and harbours), mass media capital under the NP, and BEE partially capture the reality: blacks (e.g. South African Broadcasting capital under the ANC). have political power (or, more Corporation (SABC)), a world-class In contexts like that of South accurately, a black elite has state weapons industry (e.g. Denel), high- Africa, this function of the state power), and whites have economic end research (e.g. the universities); as site for accumulation becomes power (or, more accurately, a white plus 25% of all land (including 55% exceptionally important for the elite has private corporate power). in the provinces of Gauteng and the rising black elite, which is in many Crudely, this captures a simple truth: Western Cape), making it the single ways still quite marginal in a private a (mainly black) political elite, its biggest landowner in the country; as sector locked down by giant firms. power centred on the predominant well as wielding an Africanised army It is less the case of billionaires ownership and control of means and police, and state bureaucracy, winning elections, and then of administration (e.g. the state making it the single biggest returning to their firms after their bureaucracy) and coercion (e.g. the employer in the country; through terms, than of politicians becoming police) through the state, is allied to the taxation system, it also receives billionaires by winning elections. a (mainly white) economic elite, its more income from South Africa than The (mainly black) state elite is power centred on the predominant any other single institution operating no mere ‘comprador’ layer, but a ownership and control of means of in the territory, writes M. Mohamed. powerful ruling class sector, with production (e.g. the mines), through Some of these operations run on its own agenda, of survival and private corporations. These two a for-profit basis (notably, Eskom and expansion. This involves using the sectors comprise, together, the South SAA), albeit with uneven success, might of the state to prise open African ruling class. making them almost completely the doors of the boardrooms of But this basic division should not indistinguishable from any ‘white the private sector, where black obscure the profound economic monopoly capital’, beyond the fact capitalists remain a minority, through power of the state apparatus. The that management is likely blacker. measures like BEE; it also includes distinction between the two ruling Private corporate ownership, accumulation through the state class pillars – one, the political as noted earlier, has a long and apparatus. elite/state managers/means of dismal history in South Africa: this In both of these ways, the coercion and administration; includes a history of corrupt, and black ruling class sector has real and two, economic elite/private monopolistic practices. Yet it is and independent effects on the corporations/means of coercion also incorrect to see the state’s political economy, ranging from and administration – is real, but operations as more desirable, the problems caused by corrupt, not absolute. The (mainly black) with problems like political ineffective municipal administrations, political elite of state managers has, cronyism, waste, corruption, lack to the challenges of affirmative through the state, direct control over of maintenance and investment a action, to the opportunities of substantial means of production mainstay of both the NP and ANC working with black capitalists and e.g. state corporations like Eskom periods. politicians to score lucrative state (see below); and the (mainly white) contracts, generating bitter battles economic elite of big business has, Taking the state seriously for state office and factionalism and through the private corporations, None of this is captured by administrative dysfunctions in the direct control over substantial means the ‘white monopoly capital’ state. of administration and coercion, formulation, which therefore ignores for example through corporate the largest employer and largest Nationalisation? managerial and security systems. landowner, as well as the dominant It is here that the endless ‘monopoly capital’ in a range of factionalism of the ruling ANC, as State capital sectors. It also ignores the ways well as within state departments To make this concrete: a focus that that the state itself acts as a site and corporations, as well as within stresses the (mainly white) private for accumulation, whether illicitly rival parties, has its roots: leading sector elite vanishes not only the (e.g. ‘corruption’), legally (e.g. MPs offices in the state are limited, the black elite in the private sector, but earning R85,000 monthly alongside competition for them exceedingly the powerful and wealthy black elite numerous perks), informally (e.g. fierce; as different factions emerge, in the state sector, which controls being ‘in’ on contracts given to the each seeks to lock down control of around 30% of the economy through private sector). This is besides the resources for itself, leading to purges the state, including state banks role of the state in promoting the of rivals and splits (e.g. Mbeki’s (e.g. the IDC), state corporations conditions for accumulation, both expulsion of Zuma, Zuma’s expulsion

June/July 2015 41 of Julius Malema), and elections legally own substantial means of This is a deep, entrenched, system, operating as a means of getting to production, but also those who have its current form – the white/black the state coffers. The ANC, as I have effective economic control over elite pact – representing a historical argued elsewhere, is a ‘bourgeois- those means, including heads of epoch of the system in South bureaucratic black nationalist party’, state corporations; further to include Africa – not something that can representing primarily the interests in the ruling class, also those who be changed by an election or two. of the emergent black capitalists and have effective ownership or control This is not a conspiracy, based on the (largely black) state elite – and over the means of administration or hidden networks or manipulations;

ON POLITICS AND ECONOMICS ON POLITICS a key channel for access to state coercion, which means, primarily, its domination and exploitation of resources for the lucky few. those who control the state. Given the working class rests on open, Advocates of nationalisation the hierarchical character of the centralised control and ownership should pause to consider the state, ‘those who control the state’ of means of administration, coercion, existing mess. In the 2013/14 are those at the upper levels of the and production – or, crudely, on financial year, South African Post state: the layer that controls state officials, guns and money. Conversely, Office executives failed to meet companies, departments, institutions, direct ownership of means of most planned targets, misspent local governments, and security, a production by most South Africans, R2.1-billion on tenders, and stumbled layer that includes MPs, ministers regardless of race, is extremely from crisis to crisis; while Post Office and directors, mayors and municipal minimal, living in the shadow of workers waged a series of massive managers, vice chancellors and giant private and state companies. strikes in 2013 and 2014. It emerged rectors, senior judges and police Even the 13% of land for black that top managers – who plead chiefs. Africans in former homelands is poverty when faced with workers’ To summarise, private capitalists effectively held by the state in ‘trust’, demands for higher wages and are part of the ruling class, but only and controlled by state-paid kings better jobs – awarded themselves a part, and exist in a balance with and chiefs. 26% wage increase, write Sikonathi the state elite, which has its own That being so, the notion that the Mantshantsha and Karl Gernetzky resources and its own agenda, and state can really be changed through in the Business Day. The idea that thus, its own agency and its own elections – let alone wielded by the nationalisation is, in any size, shape guilt; crudely, the ruling class centres working class against private capital, or form, socialist, is completely on capitalists and state managers. or ‘white monopoly capital’ – is mistaken: all it means is shifting profoundly flawed. Private capital resources between the private and Strategic implications and state cannot be played, one state wings of the ruling class, not But also reinforcing the blind spot against the other, and neither can shifting them to the working class; on the state, is a certain naiveté be wielded by the working class; state ownership is not working-class regarding the class character of the replacing the ANC with a new ownership. state. As indicated in the opening, party, or Jacob Zuma with a new many – I would say, most – South ANC head, would make no more Rethinking class Africans believe the state itself difference than replacing Thabo Underlying this blind-spot on the has an empty place of power, that Mbeki by Zuma did. state are both Marxist and liberal is, an empty drivers seat, at the The state cannot be changed or habits of thinking, in which ‘the top: with the right driver (party, captured or contested; it can only be economy’ is seen as something individual) and the right map (policy, fought. Since the state, like private outside of the state, and in which programme), it can go anywhere. capital, operates in structural ‘classes’ are seen, basically, as layers Thus, the fetish of parties, the fetish antagonism to the working class that within ‘the economy’. However, of elections, the fetish of great (or it helps exploit and dominate, it must even in today’s neo-liberal world, flawed) leaders as solutions. But the be resisted by its victims, outside and states remain massive economic state is locked in an endless embrace against its structures. This requires a actors, and inequalities in wealth and of capital, since, just as capital needs bottom-up class-based movement, power – the basis of class – correlate the state, the state needs capital. with a different logic and different as much with the upper levels of Further, the state is vastly more imperatives – a movement that is, at states (including state corporations), than the talking heads of parliament once, anti-capitalist, anti-statist, self- as they do with the upper levels of and cabinet, despite the obsessive managed and libertarian, and, corporations. media coverage of this layer, and its ultimately, revolutionary. Time to stop It is more reasonable, then, to use upper layers are inherently part of choosing rulers at the ballot box. an anarchist/syndicalist class model, the ruling class, and finally, the state in which the ruling class comprises is both site of accumulation, and Lucien van der Walt is a sociology not just those who personally and promoter of accumulation. professor at Rhodes University.

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