The Nationalisation Debate is More about State Capitalism than Anything Else

By Dale T. McKinley · 11 Sep 2013

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Picture: Julius Malema of the Economic Freedom Fighters courtesy Gulf Times.
Picture: Julius Malema of the Economic Freedom Fighters courtesy Gulf Times.

If ever there was an example of a discursively circular and politically manipulated ‘debate’ in post-1994 South Africa, it is nationalisation. Like a differentially located scene from a Hollywood western, poker-faces and raised guns are instantly drawn at the mere mention of the word. And, just like the absurdity of the ensuing cinematic shootouts the nationalisation battleground always ends up covered in copious amounts of ‘blood and guts’ without anything having really changed.

The most basic problem with the nationalisation debate is the way in which the main protagonists understand (and thus politically use and engage with) the meaning of the word itself.  Despite what might appear, in the context of an emotionally and ideologically charged atmosphere, as fundamental differences, at their core is a shared understanding that nationalisation is simply about a transfer of ownership from the private to the state. Where the differences emerge is in the breadth and depth of such ownership and thus, whether nationalisation constitutes a radical systemic change or merely a sideways shifting of economic deck chairs within the existing capitalist system.

Corporate capital, individual capitalists, the upper-middle class and arguably a sizeable section of the middle class, can certainly live with the nationalisation status quo – i.e., where the state ‘owns’ most of South Africa’s (undeveloped) natural wealth and state-owned enterprises but does not mess with dominant capital. However, they just as certainly see a more full-blown nationalisation (for example, involving state ownership of the mines, banks et al.) as the death knell of ‘free market’ capitalism, of a system they experience and view as guaranteeing economic freedom, the pursuit of individual happiness etc. etc.  

In this view, the state will take the (developed) national wealth, crown corporate jewels and in the process fatally undermine the holy grail of private ownership of the core means of production. If the capitalist captains are to be believed, the result will be that shareholder fire, investment damnation and lifestyle hell will rain down, as surely as night follows day.

For the dominant party political and state-bureaucratic elite - otherwise known as ANC-SACP Leadership Incorporated - nationalisation is a self-constructed ideological sword of Damocles, a useful tactical tool wrapped in vague Freedom Charter rhetoric that they can occasionally wave over the heads of (white, non-state) capital whilst having little appetite to actually ‘use’ it in full. Like the (mainly white) capitalists that they regularly scorn yet so longingly yearn to ape, this elite sees large-scale transfer of ownership from the private sector to the state as a direct threat to their longer-term economic (read: class) and political interests.

As such, they choose to play the mixed economy, ‘developmental state’ card. This allows them to use state-owned enterprises as the standard bearers of ‘change nationalisation’ whilst reaping the requisite benefits of their collective political custodianship of and increasing presence in, the world of ‘free market’ capitalism. Economist Ben Fine’s term – ‘the neo-liberal developmental state’ - seems to be the most apt description here.

Then there’s the ideologically and organisationally mixed-salad of ‘Economic Freedom Fighters’, smaller ‘left’ political parties, certain union leaders, parts of the organised working class as well as some non-Alliance lefties.  Despite the mix, when it comes to nationalisation all generally agree that to be ‘real’ it must involve the wholesale transfer of ownership (of the economic ‘commanding heights’ such as mines, energy, banks and land) from the private to the state.

Accordingly, the state which they intend to ‘capture’ will then embody the nation, the people, through taking back ownership from the private of what ‘naturally’ belongs to such a state. Or, as the ‘Economic Freedom Fighters’ founding manifesto puts it, once again making direct use of the multi-interpreted Freedom Charter, “the ownership of the people as a whole”. In this scenario it is a self-proclaimed political vanguard that will represent and lead ‘the people’ to nationalisation nirvana.

Even if they frame their ideas and arguments about nationalisation in different linguistic, organisational and ideological garbs and as much as they might vehemently deny it, the bottom line is that the key protagonists in the ongoing debate are all buying into various models of state capitalism. Common references to the ‘successful examples’ of state capitalist models in places such as China, Singapore, Malaysia and South Korea, even if coming from highly divergent angles, provide additional confirmation.

Regardless of their doomsday scenarios, the capitalist squad are not so much opposed to state ownership of certain sectors of the economy as they are apoplectic at the thought that the state could become the dominant capitalist player as opposed to them. As for ANC-SACP Leadership Incorporated, their renewed push for a ‘developmental state’ is nothing more and nothing less than a version of state capitalism light. Like all good ideological cross-dressers, they want to have their (nationalisation) cake and eat it (with a private ‘free market’ appetite) too.

When it comes to the variegated crew of (nationalisation) ‘true believers’, they commit the cardinal error of conflating the state, the nation and the people who live in it. As the history of the USSR’s ‘actually existing socialism’ model so clearly revealed, transferring ownership of all key components of the private to the (captured) state is neither a necessary or sufficient condition for a non-capitalist people’s ownership.

What is mostly missing in the debate is the idea of socialisation. This entails the transformation of private property in the means of production into social property. Nationalisation is but a particularly reductionist form of socialisation in which the state - and by association those in control of it - takes the centre (ownership) stage. A nationalisation in which the state varyingly owns and manages the majority of enterprises, plans the production and distributes the product necessarily demands a large and centralised bureaucracy which most often leads to a monopolisation of both political and economic power. The social becomes the state.

Yet, socialisation can also take the form of transforming key components of the means of production into collective/group ownership of property, especially as applied to agri-rural economies in the present national and global context of declining food sovereignty/security and environmental decimation. Further, socialisation can take the form of self-management where the means of production are turned into the property of worker communities - wherever located – and in which the product(s) of those communities are not bought and sold as commodities but distributed and exchanged freely as both a means of individual collective use value and for general (societal) social needs. The social can become society.

There is little doubt that for the foreseeable future both private capital and the state will play central roles in the development (or destruction) of society, whether in South Africa or anywhere else. Regardless, it is a disservice to those who believe in and struggle for alternatives to capitalism to reduce the scope of our ideas and practice to a nationalisation debate that only offers different shades of state capitalism.

Dr. McKinley is an independent writer, researcher and lecturer as well as political activist.

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11 Sep


I'm sure this is the same model the Apartheid government used, surely we are not planning to move back there as a nation?

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11 Sep

State Capitalism vs Self-Management

"They commit the cardinal error of conflating the state, the nation and the people who live in it."

EFF are the same clowns that, when they were in the ANCYL, were singing the praises of North Korea.

I mean, WTF!?

Perfectly put Dr. McKinley.

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16 Sep

Political Debate Is So Debased In Our Country

I find it incredible that so many people really believe that nationalisation will solve our problems. SAA, SABC, Eskom etc., are neither efficient nor do they function in the public interest. They are just vehicles for elite plunder.

If the mines were in state hands that would be as badly managed. And Malema would do even worse if he was in charge. Just look at how he plundered the fiscus in Limpopo, or the ANC YL's own funds.

If Malema has control of the mines the predatory elite would be even more bloated and the poor even poorer.

Yes, its important to note that Malema et al propose state capitalism rather than self management. But we also need to note that state capitalism under a credible government can be socially useful (e.g. as in Scandinavia) but under Malema and his cronies would just be a feeding frenzy for the political elite.

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Rory Verified user
28 Sep

Industrial democracy

I agree with Dale, that the economic mechanism that a society, that is healthy for all who live in it, needs is not State ownership of the means of production but shared ownership of the units of production by those who work in them. Such organisations already exist. The Scott Bader Commonwealth [] is one such organisation and for those who are interested it is well worth having a look at its website.

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