FW: Louis Proyect and the Register Dicscussion List

Patrick Bond pbond at wn.apc.org
Sun Dec 9 13:03:06 MST 2001


----- Original Message -----
From: "Xxxx Xxxxxx" <xxxxxxxxxx at xxxxxxxxx.xxx>
> How can we describe your brand of leftism Pat? We know you put a fair
> amount of emphasis on "civil society" organizations in building the left..
> "socialism from below", "popular mass movements", "democratic socialism"
> kind of things. I gather these are the type of struggles autonomous
> marxists subscribe..

Comrades Mark and Xxxx are challenging. I'm just off to a hospital for a
minor operation (hernia--too much heavy political lifting in this milieu,
given what you will identify as my weak limbs!)... so instead of doing your
queries justice, in the spirit you mean them, I'll share some blahblah from
the end of this new book (Against Global Apartheid), which sites how some of
us (e.g. http://www.aidc.org.za) tend to pose the problems. (AIDC has had
many trotskyist party-builders in its broad network, virtually all of whom
gave up on that project, and do mass-based organising instead. I'm one of
the "research associates" doing some vaguely-relevant intellectual work.)

But I also very much relate to the SR comrades, who are having to pose
problems in similar "deepen democracy" verbiage. This is how it comes out,
not for marxism-list of course, but for the progressive petit-bourgeois folk
who read this stuff. So the line will not be satisfying. Because of my lack
of time, here it is anyhow...

CHAPTER 12:
THE CASE FOR LOCKING CAPITAL DOWN

5. Conclusion:
>From global apartheid to democratised investment

The `price' of `satisfying the international bankers'

Detailed alternative policy proposals such as those in the pages above are
invariably unsatisfying, if they are not rooted in traditions of politics
that generate such programmes through organic, mass-based demands, and
sustain them through intensely democratic advocacy. Without the latter, the
1994 Reconstruction and Development Programme mandates for reform of both
South Africa's international financial relations and internal financial
investment processes were ignored by the neoliberal clique in the ANC, which
took over key sections of the Treasury, Department of Trade and Industry,
and Reserve Bank.
 But that clique's failures are today widely recognised, and not only by the
Left within and without the ANC-Cosatu-SACP Alliance. Even the main voice of
business in South Africa's quality Sunday newspaper, David Gleason,
contended that Trevor Manuel and Maria Ramos

 have clung with an almost religious fervour to the mantra of fiscal
orthodoxy; discipline has been their war cry, and they've succeeded. But
it's now time to consider the price that has been paid to achieve this. If
it was done to satisfy international bankers and foreign investors, all in
the name of encouraging inward investment, it hasn't paid off. Foreigners
continue to stay away from Africa. Our reputation for fiscal and monetary
conservatism has earned us brownie points and not much else. Meanwhile, part
of the price we've paid to achieve fiscal discipline has been self-induced
starvation...
  I am bound to ask whether this rigid adherence to policies designed to
placate mealy-mouthed Western investors has been worth it? A meaningful
national debate must now begin.[1]

But how meaningful can a debate be, when there is an international financial
gun persistently cocked at South Africa's head? The risks associated with
any of the public-policy measures--especially imposition of exchange
controls and default on the apartheid debt--discussed in the previous pages
are real, if ultimately indeterminate. Yet they are certainly worthy of
intelligent probing.[2]
 Such probing typically happens behind closed doors or over drinks at quiet
times during international conferences, although occasionally written
transcripts are kept. At such meetings, the dilemma of the quality of the
`relationship' between borrowers and lenders arises, especially `when you
are about to default on your debt', as Maria Ramos remarked at a 1999
workshop attended by top IMF officials. At that stage, `Does it help to have
a pre-defined set of rules?' The question emerged at a recent strategy
session of major developing countries where `there was a strong feeling that
we needed some rules of the game.'
 However, Ramos continued, `I think Brazil was the first to change its mind
when it had to go into negotiations. I was very sympathetic to this because
it becomes a very different environment when you have to negotiate a debt
standstill or a change in your debt structure with your creditors.' Indeed,
Ramos conceded,

 in an extreme crisis situation, default will have to be part of the
equation. In that case, the only way in which you are going to prevent a
short-term outflow of capital is through some pretty tough exchange control
measures. I don't know if there are too many options available. In 1985,
during the Apartheid era, South Africa unilaterally declared a debt
standstill and re-imposed very draconian exchange control measures. However,
it's not something one would like to advocate.[3]

But rather than await for the next crisis to emerge, as it surely will, the
seeds of a new way of thinking about democratised investment are today being
sown by many critics who understand how undemocratic, out-of-control
financial markets, international bankers and World Bank/IMF missions
together amplify global apartheid--and also ensure the rise of
class-apartheid within South Africa. Such an understanding either escapes
those in Pretoria with clout, or doesn't bother them sufficiently to do
anything meaningful to correct matters.

The alternative: nurturing `socialism from below'

Would a `national debate' over the problem of Pretoria's surrender to
international financiers be limited to technocratic suggestions for reform,
rather than the kinds of radical changes that are obviously necessary? Would
there, in short, be space for advocates of a revitalised
socialism-from-below?[4]
 It is to this tradition that I turn in conclusion, in part because I began
this book by citing the diagnosis of organic left-wing intellectuals, and in
part because writers of the independent, non-sectarian left (for example, in
the annual Socialist Register) have also made the conquest of finance,
mainly by the nation-state, one of their main challenges, as a necessary (if
insufficient) step on the long march to a more profound transformation of
society.
 Recall the concise summary of finance-driven, crisis-ridden
globalisation-from-above posed by the ANC Alliance leftists at the outset,
in their 1998 discussion document:

 The present crisis is, in fact, a global capitalist crisis, rooted in a
classical crisis of overaccumulation and declining profitability. Declining
profitability has been a general feature of the most developed economies
over the last 25 years. It is precisely declining profitability in the most
advanced economies that has spurred the last quarter of a century of
intensified globalization. These trends have resulted in the greatly
increased dominance (and exponential growth in the sheer quantity) of
speculative finance capital, ranging uncontrolled over the globe in pursuit
of higher returns.[5]

If so, then what? A critical prerequisite for socialism-from-below, is cited
by one of the world's most far-sighted political scientists, York University
professor Leo Panitch:

 The key long-term condition for an alternative to globalisation is
democratic investment control within each state--the opposite goal to that
of today's multilateral international negotiations. This must mean going
beyond the type of quantitative controls on the inflow and outflow of
capital allowed under Bretton Woods, let alone beyond the Tobin Tax on
capital flows now being advanced by many on the left. A campaign for
qualitative democratic capital controls is required.[6]

In general, not merely in South Africa, a feasible menu of
developmentalist-state interventions along these lines would include
imposition of watertight exchange controls; careful reflation of the economy
through strategic state spending; imposition of prescribed assets on
financial institutions so as to redirect finance to social uses; increasing
nationalisation of strategic sites of the economy; creative juggling of
import/export requirements so as to avoid foreign debt and wastage of
resources on luxury consumption; default on illegitimate foreign debt; and a
more general commitment to `get the prices wrong' in financial markets
through interest rate subsidies and directed credit to socially-useful
producers, if need be, to assure the maximum developmental return on
democratic investment.
 These kinds of interventions in financial markets--well-tried and tested in
numerous settings around the world, including even South Korea when during
the 1960s the banks were nationalised--are obviously no use merely by
themselves. A full-fledged democratisation of political-economic processes
is also crucial. Indeed, the lack of democracy associated with top-down
international and local economic reforms is one key reason for their
persistent failure.
 And indeed that is why nothing can really be expected from the `Millennial
Africa Recovery Plan' that Mbeki developed in various closed-door seminars
during 2000-01. Rather than seek self-reliance from the most damaging
international financial and trade circuits, Mbeki seeks yet further
integration, and worse, to expand the role of international financial and
trade institutions, and orthodox aid, in Africa.[7]
 Instead, the dynamic of progressive change will emerge from the alienation
of those who suffer most from neoliberalism, in South Africa and across the
world, and from the creativity of those who demand and imagine a better
world.[8] Those social forces include: labour under threat of privatisation
and plummeting real wages; communities facing water and electricity cut-offs
or simply more years of non-delivery; students facing exclusion due to
inability to pay soaring tuition fees; disabled people and the elderly whose
pensions are denied by uncaring financial bureaucrats; and those millions of
South Africans facing early death due to the failure of governments to
challenge the private-profit character of the health system, especially in
relation to anti-retroviral drugs, the dispensing of which should have begun
years ago through state-owned generic production facilities.
 These are amongst the main social forces arguing for the decommodification
of basic-needs goods and services. They argue for the destratification of
society so that access becomes an entitlement that all citizens must enjoy.
They insist on degendered provision of goods and services so that, it is no
longer women who pick up the pieces when the state fails. And, as
demonstrated by the Alexandra and Soweto protesters against the World Bank's
Lesotho megadams, they have an often stunning awareness of the harmony
between society and nature that is required to make all the above happen
`sustainably'.[9] Alongside genuine workplace democracy and increasing
citizen planning of production, these are the vital elements in
socialism-from-below.
 Naturally, this cannot come from above. It is only from the activism on
shopfloors and in communities that a durable economic democracy can emerge,
although a nurturing state can make all the difference between defeat--a few
small pilot projects fizzling out--and sustained victory. Thus another
editor of Socialist Register, Greg Albo, sets out ten `transitional'
principles highlighting the role of workplace transformation, of which the
first three are more broadly political in nature:

 1) inward-oriented economic strategies will be necessary to allow diversity
of development paths and employment stability;
 2) financial capital must be subjected to democratic controls on debt
payment and capital mobility; and
 3) macroeconomic balance requires not only aggregate demand management, but
also new forms of investment planning and collective bargaining norms.[10]

Democracy now

Such radical reforms would necessarily be located at the scale of the
nation-state. Achieving these probably requires a revolution in power
relations, which is precisely why the state--the traditional site of
politicised class struggle, as argued in Chapter Ten--remains the unit of
analysis amongst even those who (like myself) consider themselves vigorous
internationalists.[11]
 Another leading international political scientist, Boris Kagarlitsky of the
Russian Academy of Sciences, confirms that since 1998, the global capitalist
crisis has

 forced even the neoliberal mainstream to change its attitude towards the
role of the state. Experts of the IMF suddenly declared that `certain types
of capital controls may be justified in some circumstances.' American
businessmen agreed: `Maybe some sort of protectionism makes sense for
Russia.' The state must use its strength to overcome the crisis of the
market. `If that means instituting wage and price controls, or
renationalising basic industries to ensure supplies and employment, so be
it.

To be sure, Kagarlitsky also advocates international regulation but
correctly concludes that

 no international regulation will work unless it is based on national and
regional bodies. If it is not, the rules and decisions made by international
bodies simply will not be implemented. And no democratisation of
international relations is possible without democracy at the level of a
nation state.[12]

That, indeed, is the bottom line. In so many respects, thorough-going
democracy is what has been most surprisingly absent in a society which won
its formal `bourgeois' democracy after so much bloodshed, so recently. In
setting the macro-economic rules, virtually no meaningful inputs from mass
organisations like Cosatu have been allowed. The case of the Treatment
Action Campaign proves that sometimes international solidarity against the
source of oppression--whether pharmacorps or the Bretton Woods
institutions--will be required, simply so as to ensure that nation-states
can gain the space to implement measures in the interests of their
constituencies, where these conflict with transnational corporate and
banking interests.
 The formula of `internationalism plus the nation-state' becomes vital under
such circumstances, and as a result, is anathema to neoliberals who would
avoid any such `voluntarist experiments' as the 1997 Medicines Act. Indeed
where the trade union movement has begun veering leftwards and into
internationalist terrain, the neoliberal clique in Pretoria has squirmed
most uncomfortably. To illustrate, according to front-page Business Day
coverage in late August 2001, just before Cosatu's two-day strike against
privatisation, as conflicts within the Alliance reached a boil,

 Cabinet ministers were subsequently dispatched to influential radio and
television programmes first to `clarify' government positions, but also to
`show Cosatu members they are being urged to committing suicide', according
to an official involved in the spin-doctoring offensive. Also part of the
strategy--championed by Trade and Industry Minister Alec Erwin, Transport
Minister Dullah Omar and Public Enterprises Minister Jeff Radebe--was to
seek to caution Cosatu members against the possible hijacking of their
strike by outside elements such as those protesting at World Bank and
International Monetary Fund meetings.[13]

Bizarre as it sounded at first blush, Johannesburg's Business Day
demonstrated the underlying rationale for hijack-phobia on the following
day:

 SA needs to cut import tariffs aggressively, privatise faster and more
extensively, promote small business effectively and change labour laws to
achieve far faster growth and job creation. This is according to a World
Bank report that will soon be released publicly and has been circulating in
government. It stresses `the overarching need to improve the investment
climate' in SA for faster growth and job creation.[14]

Like the reported claim by Thabo Mbeki that the Treatment Action Campaign
had `infiltrated' Cosatu, it would be up to the trade union movement to
rebut the state's delusional paranoia about those allegedly `outside
elements' opposed to the World Bank and IMF, through their actions over
subsequent months and years.[15] Although danger always exists of reversion
to the bureaucratic trade-unionism characteristic of a sub-imperial `labour
aristocracy', the opposite is more likely: the actions of the organised
South African working-class, and its allies, can only become more radical
and internationalist, the more that global inequality and financial
turbulence together intensify, and the more that Mbeki, Manuel, Erwin,
Ramos, Mamphele and other South African elites shine--rather than break--the
chains associated with the most oppressive international institutions.
 A crucial preliminary ingredient in the campaign to establish the broadest
and deepest possible form of economic democracy, is a growing sense in
society `as a whole' that things have swung perilously far towards
undemocratic rule by corporations, financiers and their Washington helpers.
The swing of the pendulum back requires not only the activism which this
book has celebrated. It also requires the contemporary rulers, including
elite opinion-makers outside government, to realise that their own course is
self-destructive.
 As a result, it is only appropriate to end a book with as controversial and
provocative tone as I have sought to implant here, by resorting to
impeccable establishmentarian logic. So I borrow a quote in closing, from
another Socialist Register contributor who also recently posited the need to
end international financial tyranny:

 Once a nation parts with its currency and credit, it matters not who makes
the nation's laws. Usury, once in control, will wreck any nation. Until the
control of currency and credit is restored to government and recognised as
its most conspicuous and sacred responsibility, all talk of the sovereignty
of parliament and of democracy is idle and futile.[16]

The quote is from William Lyon McKenzie King, a long-serving Canadian prime
minister, and was uttered at the time (1935) of the last great comeuppance
for global apartheid. Genuine establishment critics of the excesses of
capitalist globalisation, as King or Keynes might be were they to have seen
the 21st century, or as George Soros and Joseph Stiglitz have sometimes been
in recent days, do recognise that nothing less than democracy is at stake.
 For South Africa to finally establish sovereignty and democracy, in place
of the unsatisfying, continuity-based transition from apartheid to
neoliberalism, requires precisely such insights, as well as corresponding
actions that, finally, speak louder than words. I have no doubt that a
movement for genuine democracy is on the immediate horizon, and that it will
be victorious, so long as those protesting in the streets and shopfloors
maintain their vigilance and recruit more and more to their cause--and so
long as social progress is not delayed much longer by those in Pretoria,
Washington and other sites of power, who remain intent on polishing, not
abolishing, global apartheid.

NOTES

1) Sunday Business Report, 26 August 2001.

2) Critics are often frustrated at the lack of seriousness from government's
side. For example, all late 1990s efforts to establish a meaningful dialogue
between Jubilee South Africa and the Treasury were foiled when Manuel, Ramos
and Gill Marcus persistently denied that there was an apartheid foreign debt
(see documentation at http://aidc.org.za). The officials insisted on not
counting apartheid-era borrowing by Eskom, Telkom and other parastatals, or
the private sector debt that the apartheid state had guaranteed at the time
of, and after, the 1985 debt standstill. Of course while in exile, the ANC
had insisted that there be no such foreign loans to apartheid state agencies
and proxy fundraisers. When one parastatal--the Independent Development
Trust--tried to raise credit from Germany during the early 1990s, the then
secretary general of the ANC, Cyril Ramaphosa threatened to default after
the first democratic election, a successful tactic that put off the
Frankfurt banks.
 To fail to agree upon even the simple factual basis for a discussion about
apartheid debt, as just one example, suggests the difficulty of reasonable
debate with the neoliberal clique about South Africa's international
financial relations. Likewise Parliament has been useless as a venue, as a
result of the main opposition party's advocacy of neoliberalism on the one
hand, and on the other, the unwillingness of finance committee chairperson
Barbara Hogan to even consider a proposed R1,6 billion World Bank hospital
loan worthy of a hearing, in mid-2001. It appears that it is only in the
media and on the streets that concerns over the international financial
strangulation of South Africa can occur, but this occurs--with the rare
exception--without meaningful engagement from Pretoria.

3) For Ramos, the main issue here was whether the cost of foreign borrowing
would rise, in the event that `rules' were imposed on banks aimed at pricing
financial-panic risk beforehand--versus a `catalytic' approach which buys in
the private lenders only at the point of crisis so as to `try to prevent the
banks from rushing for the exit.' (In either case, needless to say, Ramos
accepted the broader rules of the game without questioning the legitimacy of
the inherited foreign debt.) `If South Africa went into default mode, which
one would I prefer?', Ramos asked. `I guess my gut reaction would be that I
would take my chances trying to negotiate this out with the creditors by
using the catalytic approach.'
 Ramos, M. (2000), `Comment on A New Framework for Private Sector
Involvement in Crisis Prevention and Crisis Management by Jack Boorman and
Mark Allen,' in J. Teunissen (ed), Reforming the International Financial
System: Crisis Prevention and Response, The Hague, Forum on Debt and
Development, pp.125-127.
 Actually, the central question at that moment would not revolve around the
negotiating prowess of Manuel and Ramos, but instead whether the balance of
forces in the world economy would permit a `voluntarist experiment'--to
recall the 1996 slur in an ANC discussion document, mentioned in Chapter
7--such as a South African default. The only way to establish such a
favourable power balance would be to systematically disempower the creditor
cartels ahead of time. Those cartels' most important assets are, of course,
the IMF and World Bank. But that conclusion Ramos would not broach, much
less arrive at herself. It is up to the movements for global justice to do
so, notwithstanding the self-defeating attempt to empower the IMF and Bank
being made from Pretoria.

4) The most convincing recent `how-to' guide for establishing democracy
during a socialist transition, transforming the inherited state, and
consolidating power through empowered popular and workplace councils, is by
James Petras and Henry Veltmayer (2001), Globalization Unmasked: Imperialism
in the 21st Century, Halifax, Fernwood and London, Zed, pp.166-174.

5) ANC Alliance (1998), `The Global Economic Crisis and its Implications for
South Africa,' ANC Alliance Discussion Document, Johannesburg, reprinted in
The African Communist, Fourth Quarter 1998.

6) Panitch, L. (2000), `Reflections on Strategy for Labour,' in L.Panitch
and C.Leys (Eds), Working Classes, Global Realities: Socialist Register
2001, London, Merlin and New York, Monthly Review, p.381.

7) This was to be expected, what with men who enjoy such questionable
political reputations, and who oversee such corruptly-run economies, as do
Mbeki's MAP co-sponsors Olesegun Obasanjo of Nigeria and Abdelaziz
Bouteflika of Algeria, and with the MAP's debut in settings such as a secret
meeting `at an undisclosed Gauteng location'--as reported in Business
Day--in November 2000 with James Wolfensohn, at the Davos World Economic
Forum in January 2001, and for Wolfensohn and Horst Kohler in Mali in
February 2001, prior to discussion in Mbeki's own political party, in South
African or other African parliaments, or with African civil societies. For a
critical perspective on the MAP process, see Taylor, I. (2001), `Getting the
Rhetoric Right, Getting the Strategy Wrong: New Africa, Globalisation and
the Confines of Elite Reformism,' Unpublished paper, University of Botswana
Department of Political Science, Gabarone.

8) The most important analysis of this movement is Amory Starr (2000),
Naming the Enemy, London, Zed Press. See also http://www.zmag.org and
various linked websites. For particularly anarchist perspectives, see
http://www.infoshop.org

9) My forthcoming (2002) book on this movement from below, and what it
objects to in the country hosting the September 2002 Rio+10 World Summit on
Sustainable Development, is provisionally entitled Sustainable South Africa?
Environment, Development and the Post-Apartheid State.

10) The other seven, spelled out in detail, are:
4) reducing unemployment will entail both less work and a redistribution of
work;
5) a `politics of time' should extend beyond setting standard hours to
consider the allocation of work-time and free-time;
6) productivity gains in the labour process should be negotiated against the
requalification of work;
7) the requalification of work should be linked to quality production within
a quality-intensive growth model;
8) the decline in work-time allows the administrative time for workplace
democracy;
9) local planning capacities will be central to sustaining diverse
development and full employment; and
10) socialist economic policy should encompass new forms of democratic
administration.
Albo, G. (1997), `A World Market of Opportunities? Capitalist Obstacles and
Left Economic Policy,' in L.Panitch (ed), Ruthless Criticism of all that
Exists: Socialist Register 1997, London, Merlin.

11) For alternative radical points of view which reject the nation-state as
the preferred site of socialist struggle, see (in addition to those
discussed earlier) Hardt, M. and A.Negri (2000), Empire, Cambridge, Harvard
University Press; and Brecher, J., T.Costello and B.Smith (2000),
Globalization from Below: The Power of Solidarity, Boston, South End Press.

12) Kagarlitsky, B. (2000), The Twilight of Globalization: Property, State
and Capitalism, London, Pluto, p.39.

13) Business Day, 27 August 2001.

14) Business Day, 28 August 2001.

15) Likewise, the case of the April 2001 announcement of a plot to overthrow
Mbeki by three members of the aspirant black bourgeoisie, suggests that
Pretoria spin-doctors have been taking lessons from Harare.

16) Cited in Tickell, A. (1999), `Unstable Futures: Controlling and Creating
Risks in International Money,' in L.Panitch and C.Leys (eds), Socialist
Register, London, Merlin, p.267.



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