Nationalisation debate

The whole question of nationalisation, especially of the mines, has become extremely confused, no more so than within the trade union movement.

As with many policy debates, a complex web of allegiances, loyalties and 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.

The ANC Youth League's Malema is 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 left-wing conspiracy to defame him.

Then there is mining magnate Patrice Motsepe of African Rainbow Minerals, who has shrugged off nationalisation as acceptable.


At the same time, the SACP, as the self-proclaimed vanguard of the Left, although still a member of the governing ANC alliance, has not opposed the government's insistence that nationalisation is not on the cards.

In the words of Cosatu, the whole question is "an arena of struggle". But who is supporting which position and why is of critical importance. There are several agendas in play, not all of them spiked with obvious self-interest.

In the first place, there is the 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 (BEE) framework: formal ownership would change, the system would not.

However, under government 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 co-opting the term, "socialisation" from the lexicon of the Left, where socialisation is usually seen as synonymous with worker, rather than state, control.

But while this discussion will continue, it is unlikely to take centre stage in coming months: that position is certain to go to the broader economic debate arising from the recent Budget. Almost without exception, it was greeted by trade union leaders as "balanced" and "fair".

But then came the qualifications: on inflation targeting, on lack of detail, and on the fact that there was really nothing new; that in many ways this Budget was merely a "rehash of previous policies". In other words, policies formulated under the stewardship of President Thabo Mbeki and that became known by Cosatu and SACP critics as "the 1996 class project".

This "rehash" has resulted in a number of trade unionists referring to the latest Budget as having introduced "the 2010 class project".

It is an accurate assessment. Under the latest regime, for example, individuals with an income of R1 million a year will save R3 534 in tax. At the same time, the increased tax on fuel will increase costs of transport and, therefore food and other basics to the detriment, primarily, of the poorest of the poor, who also face the effects of increased electricity charges.


Source: Business Report