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Systems of Governance


Shoks Mzolo and Bongani Kona trace the path of South Africa’s transformation from a criminal apartheid state to a criminal neoliberal state, where a handful of old-monied white capitalists still turn the screws and call the shots, while a newly monied black bourgeoisie stands to attention. The authors examine the knowns and unknowns of the ongoing struggle for economic freedom.

Late in June 2003, Joseph P. Overton, a senior vice-president at the Mackinac Center for Public Policy, a US think-tank based in Michigan, died when the ultralight plane he was flying crashed near an airport in Caro, Michigan. He was 43 years old. His principal research was concerned with the convergence of politics, media and democracy, and how right-wing think-tanks could influence public policy.

His pioneering insight – devised in the mid-1990s and known in the field of political science as the “Overton Window” – was in establishing that political ideas have their time. At any historical moment, depending on the cultural and economic processes unfolding, Overton intuited, there exists a range of political ideas in the public sphere that are deemed to be acceptable, acceptability being defined as the range of political propositions public office holders can support without risking re-election – the threshold, in other words, determined by the prevailing social orthodoxies.

But the window of acceptability can be moved, Overton established, to encompass radical ideas which lie outside the prevailing mainstream – from “free, quality, decolonial education” to “Brexit”, for instance. Crucial to this observation, however, is that politicians are seldom responsible for moving the window: “Politicians typically don’t determine what is politically acceptable; more often than not they react to it and validate it. Generally speaking, policy change follows political change, which itself follows social change.”

Listening to South Africa’s President Jacob Zuma talk about the urgent need for radical economic transformation during the tumultuous 2017 State of the Nation Address (SONA) is to have to understand that a deeper historical process is presently unfolding. Hardly three years have passed since the president used the very same occasion to declare to members of parliament, and live television viewers, that the African National Congress (ANC), the governing party since 1994, had a “good story to tell” about the first 20 years of democracy it has presided over.

Now, however, the president – and by extension, the ANC – have been coerced into doing something they are unaccustomed to: speaking in the present tense – a shift in tone exemplified by the president speaking in parliament, a fortnight or so after SONA, about the possibility of re-drafting the constitution to allow for land restitution without compensation. Such a proposition would have been unthinkable to past presidents of the ANC post-1994 despite it being one of the stated ideals of the anti-apartheid struggle. “Radical economic transformation” and its bête noire, “white monopoly capital”, have moved from the periphery to the centre – from being discredited in the mainstream press as the tin-foil-hat brainstormings of a trade union and communist party left wishing to turn the clock back to Petersburg, 1917.

In the mid-1980s – a time when just over 80 per cent of the shares on the Johannesburg Stock Exchange (JSE) were in the hands of four large, white-owned conglomerates – the phrase “white monopoly capital” clung to the lips of every trade union leader and reverberated across the country. Like countless of our teenaged contemporaries, we sat up under the cover of night, listening to Radio Freedom, dissecting the term and its wider import in our umrabulo or informal political education sessions. We lapped up banned books, anything from the Communist Manifesto, Chocolates for my Wife, to I Write What I Like. We understood then that we were fighting a political system as much as an economic one. In the words of Ebrahim Harvey, “The white racist Nationalist Party was our political enemy but white capital – which stood behind them – was always our class enemy.”

Indeed, then, as it is now, the two were inextricably linked. Politics is economics. In order to thrive, white monopoly capital, which controlled all the major spheres of the economy, relied on apartheid’s “racial subsidies”, to quote Achille Mbembe, “in the form of low skills levels, inadequate nutrition, poor health, bad housing, [and] social instability”. The ties between capital and an increasingly authoritarian state were obvious, even to a teenager with a rudimentary understanding of the Communist Manifesto. The shared goal was to limit all black people (including those of Asian descent) from any meaningful economic participation, while ensuring a steady supply of cheap black labour.

Yet the term – together with the ANC’s more radical economic propositions enshrined in the Freedom Charter – all but vanished from the vocabulary of mainstream political debates during the first 15 years of South Africa’s nascent democracy. Its return to the centre is due to a confluence of factors – both historical and contemporary, some global and others local – which have led to the questioning of the legitimacy of the 1994 national consensus.

The so-called “pact with the devil”, as Ronnie Kasrils calls it, was agreed upon in the early 1990s, a time of global realignment. The most significant of these shifts was the collapse of the communist bloc in Eastern Europe and the Soviet Union – the ANC’s once powerful ally – together with the preeminent rise, in the 1970s and 1980s, of the International Monetary Fund (IMF) and the World Bank in the new global economy. These developments forced the ANC to re-think its radical economic agenda.

The collapse of the old communist regimes meant that in actuality there was no alternative economic discourse to that of the free market. Trevor Manuel, South Africa’s longest-serving finance minister, said as much in an interview in 1995: “[T]he collapse of the Soviet Union, the destruction of the Berlin Wall broke the… revolutionary romantic illusions of many. That very stark collapse shifted the debate very significantly.”  Nelson Mandela himself, once a vocal proponent of nationalisation, had by 1991 – a year after his release from his Victor Verster Prison – tempered his tune to reflect the changing balance of economic power.

The ANC was itself fractured along ideological lines. In the introduction to his brilliant autobiography, Armed and Dangerous, Ronnie Kasrils writes that from “1991 to 1996 the battle for the ANC’s soul got underway and was eventually lost to corporate power: we were entrapped by the neoliberal economy – or, as some today cry out, we ‘sold our people down the river.’” In place then of a radical economic agenda, the ANC signed a bargain, which, according to the current deputy finance minister, Mcebisi Jonas, entailed “a political and class compromise which (1) safe-guarded the interests of the existing (white) economic elite, (2) created a new black elite primarily through state employment and rents” and which created the largest welfare state on the continent. (At last count, 17 million South Africans are dependent on direct income transfers from the state – in the form of social grants – for their upkeep).

The legitimacy of the 1994 national consensus, yielding as it did to corporate power, has been in question from the very start, exemplified by the ubiquitous service delivery protests and the emergence of small-scale civil society organisations such as Abahlali baseMjondolo (a shackdwellers’ organisation) agitating through a variety of means for better state housing. But the objections, on the whole, were not as vociferous as they are now.

The 2008 financial crisis and the attendant decline in economic growth shored up popular discontent with capitalism. But in South Africa, the Wall Street crash was parlayed into a greater dissatisfaction with the technocratic ruling elite responsible for having set the country on a neoliberal economic path via the Growth, Employment and Redistribution Strategy in 1996. Dissatisfaction made itself heard in the broad coalition of voices (marginalised trade union and South African Communist Party leaders in the main) that helped Jacob Zuma ascend to the presidency of the ANC and, consequently, of the republic. Then, of course, came the removal of Thabo Mbeki, a University of Sussex-trained economist, from office.

But it was not until 2012 that ground firmly shifted against the 1994 national consensus. That year, 34 striking mine workers died in a storm of bullets after clashing with police in Marikana, near a platinum mine 100km northwest of Johannesburg – a seminal event, which more than any other in South Africa’s brief post-apartheid history, underlines the obscenity of the status quo. The deaths, which resulted in President Zuma’s sanctioning a week of official mourning with flags flying at half mast, occurred when 3,000 miners – rock-drill operators, all black – decided to stage a strike demanding an increase to their monthly wage from R4,000 to R12,000. Ian Farmer, the white CEO of the company in question, Lonmin, a London-based entity, earned upwards of US$2 million at the time.

The Marikana massacre remains the only historical event the ANC is incapable of speaking about. The South African government has yet to sanction the building of an official memorial to commemorate the deaths and this reluctance to do so should tell us something. To commemorate the event would require an historical explanation, a reading of the massacre which places it in the larger national narrative about where the country has been and where it is going.

In a very real sense then, the emergence hardly a year later of the Economic Freedom Fighters (EFF), a strident, youthful opposition party with a name that perfectly articulates its political raison d’etre, could not have been better timed. Dressed always in red overalls, a symbolic gesture of allegiance that ties the party to South Africa’s underclass – domestic workers, gardeners, the large swathes of the unemployed – has been instrumental in giving vocabulary to what most of us have already intuited: that the economy is controlled by white hands. The EFF has warned its growing electorate: “Sure, you may be allowed to vote every so often, but don’t fool yourself into thinking that real power is vested in the ballot box.”

That South Africa’s main opposition party (numerically speaking), the Democratic Alliance (DA) – whose key decision-makers are mainly white and pleasantly salaried (the billionaire Natie Kirsch, who makes a living building apartheid walls in Israel, is one of their biggest donors) – has not been able to profit meaningfully from these seeds of discontent is a story worth telling – one that reveals the limits of English in South Africa.

In the classic opening of Charles Dickens’s novel, Hard Times, Mr. Gradgrind intones: “Now, what I want is Facts. Teach these boys and girls nothing but Facts. Facts alone are wanted in life. Plant nothing else, and root out everything else. You can only form the minds of reasoning animals upon Facts; nothing else will ever be of any service to them.” The DA, faithfully abiding by this instruction, speaks factually about economics (low-growth, GDP, fiscal discipline, Gini coefficient, etc.) and it can only do so in English. But economics here, like anywhere else in the world, is not only about facts. It’s also about narration – how the interpretation of those facts may be formed into story.

The story the EFF tells about capital in South Africa, in the vernacular (even if it’s spoken in English), draws from a reservoir of shared experience. Anyone who has ever walked in the cool of an air-conditioned office, or sat in a sidewalk café in the city centre, doesn’t need to be told that, in 2017 in South Africa, “the wealthiest 10% of the population [overwhelmingly white] own more than 90% of all wealth and more than 55% of income”; or that “the poorest 50% [overwhelmingly black] of the population, who earn about 10% of all income, own little to no measurable wealth”. Politics is economics and vice versa. Thus, when the EFF speaks about white monopoly capital, it is not simply talking about the facts, but evoking a larger set of historical betrayals and grievances.

Consider this: Johann Rupert, chairman of the Swiss-based luxury-goods company Richemont, as well as of the South African-based company Remgro, and son of Anton Rupert (Hendrik Verwoerd’s comrade-in-arms in the 1960s), is the country’s third richest person. Ahead of him: Nicky Oppenheimer, whose grandfather founded the mining empire, Anglo American, and Shoprite founder, Christo Wiese. Between them, the Oppenheimer and Rupert families control R180 billion, the equivalent of what 26 million South Africans in the bottom half own, according to Even It Up, a 2014 Oxfam study. Wiese, the country’s wealthiest citizen, is worth R80 billion. How else do you tell such a story without mentioning the need for reparations?

“White monopoly capital refers to unjust ownership, facilitated and enabled by apartheid laws,” says Zanele Lwana of the Black First Land First (BLF) movement, founded in 2015 by Andile Mngxitama following his expulsion from the EFF. We met on a cloudless summer day in Johannesburg. Looming large from where we sat, and darkening the skyline, were the Absa Towers – the headquarters of the bank that has generated so much ill-feeling since a Mail & Guardian exposé about an apartheid-era bailout said to have unlawfully given the bank access to an estimated R2.5 billion of taxpayer funds.

We met that morning to talk about the surreal turn of events in December 2015, when the head of the country’s finance ministry changed three times in the space of a week – events which led to Blank First Land First (BLF) lodging a criminal case with the High Court and a complaint with the Office of the Public Protector to investigate “white corruption including white state capture”. The respondents in both matters are nine high-ranking white executives who between them control billions of dollars:

1. Businessman and Chairman of Swiss luxury group Richemont, Johann Rupert [that name again];

2. Barclays Africa Group CEO, Maria Ramos;

3. Goldman Sachs South Africa head, Colin Coleman;

4. Investec Bank global CEO, Stephen Koseff;

5. Imperial Holdings CEO, Mark Lamberti;

6. Sanlam CEO, Ian Kirk;

7. Business Leadership South Africa chairperson, Bobby Godsell;

8. Toyota Europe CEO, Johan van Zyl; and

9. FirstRand CEO, Johan Burger.

The events of that December, precipitated by President Zuma’s surprise sacking of then minister of finance, Nhlanhla Nene, demonstrate how white monopoly capital is still running the show, Lwana said. She continued:

“Johann Rupert flew from London to summon ANC seniors to have Des van Rooyen pushed out. He said there would be an economic meltdown unless (Van Rooyen) was gone. Why do you think the Rand fell [to below R15 to the US dollar]? Because of Des van Rooyen? It’s not as if he was the first ‘unknown’ [civil servant to occupy such a crucial office].”

Nelson Mandela, she added, had never occupied public office until he became the country’s first legitimate leader, yet there was nothing on the scale of the outcry that followed Van Rooyen’s appointment.

It’s not coincidental that the phrases “white corruption” and “white state capture” appear in BLF’s complaint to the Office of the Public Protector and in the criminal case lodged with the High Court. Following the sacking of Nene, the president was accused of acting in concert with the Gupta brothers – an Indian business family who migrated to South Africa in 1993 and who have assets and investments totalling billions in rand – to capture the state treasury. Mcebisi Jonas, then deputy to Nhlanhla Nene, would later say he had been offered R600 million by the Gupta brothers if he consented to being appointed as the new minister of finance. The resulting uproar, which led to calls for President Zuma to resign and for the Gupta family to be deported, BLF said, seemed to miss the point entirely. The state has long been captured by white monopoly capital. Hence they are able to push for Pravin Gordhan, a stooge, BLF say, to be appointed as the minister of finance.

But just what transpired – who said what to whom – to have Van Rooyen’s appointment rescinded after he had spent only four days in office, remains in dispute, in keeping with Donald Rumsfeld’s shadowy territory of known knowns – things we know that we know – and known unknowns – things we know we don’t know. We know, for instance, that a high-powered delegation of senior ANC leaders (Deputy President Cyril Ramaphosa and Treasurer-General Zweli Mkhize, among others) and influential players in the business sector (Maria Ramos and Johann Rupert) met with President Zuma to discuss the matter. A matter, it must be said, the latter seemed unwilling to discuss in any great detail from the onset. The initial press release, sent out to announce the news, was less than 100 words.

Then of course, there are the things that we know we don’t know. We don’t know what was said in that meeting, but the weight of what was said was enough to strong-arm the president into reversing his decision and re-appointing Pravin Gordhan to his old post. “For President Zuma to be forced to change ministers makes it clear who is calling the shots in our country. White monopoly capital has long captured the state and we’ve taken the matter the Public Protector, but nothing has happened since,” Lwana said.

To say nothing has happened may be an understatement. Shortly after the re-instatement of Pravin Gordhan, ABSA closed all accounts linked to the Gupta family, citing “reputational risk” and “suspicious transactions”.  Then, in April 2016, within five days of each other, three other banks – First National Bank, Standard Bank and Nedbank – followed suit. The Gupta family are contesting the decision in court, in a matter that also involves the finance ministry, and there’s no telling how all of this will end.

In the meantime, calls for radical economic transformation and for the dissolution of white monopoly capital have only intensified, emerging from a diverse coalition of voices, from the EFF to disaffected university students agitating for free tertiary education to trade union leaders.

Late last December, President Zuma – back to his combative self after having survived calls for resignation from his own party, or a regime change agenda driven by white monopoly capital, depending on who you believe – gave the keynote address at the ANC Youth League Economic Freedom Lecture at the Olive Convention Centre in Durban. “They called it the ‘Nene disaster’. But is the nation really aware of what is happening?” he said, his eyes darting across the packed auditorium. “The monopoly capital and their stooges attacked me.”

The crowd rose to their feet and cheered.

This piece features in the Chimurenga Chronic (April 2017). To purchase in print or as a PDF head to our online shop.

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