7 Aug 2013
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On 1 August 2013, SACSIS’ Fazila Farouk spoke to renowned social commentator, author and public figure, Professor Sampie Terreblanche, who has spent many years researching and writing about South Africa’s poverty and inequality.
Terreblanche argues that the ANC’s embrace of the neoliberal approach for economic development is the wrong model for South Africa. He argues further that the ruling party has used the public purse to facilitate an elite transition through black economic empowerment.
However, he also notes that White South Africans occupy an extremely privileged position in this country and argues that if the dire situation of the bottom 50% of South Africa’s population is going to change, then Whites will have to make a sacrifice. “There is no other way,” he contends.
Farouk talks to Terreblanche about the history of South Africa's transition, with a particular focus on the role of big capital in the transition to democracy as well as prospects for change in the future.
Transcript of Interview
FAZILA FAROUK: Welcome to the South African Civil Society Information Service. I'm Fazila Farouk coming to you today from Stellenbosch in the Western Cape.
South Africans seem to be facing our moment of reckoning. Twenty years after apartheid, this country's racial and economic architecture remains unchanged. White South Africans still own much of the wealth of this country, our economy. While Black South Africans, apart from a narrow black elite, largely remain in poverty.
Our guest today, Professor Sampie Terreblanche, has been reflecting and writing about South Africa's poverty and inequality for many, many years. We're here today to talk to him about how it is that we have arrived at this point, 20 years after democracy, where the status quo in this country hasn't changed.
It's actually an opportune moment to be talking to him. A year ago, in fact, almost exactly to a day, a year ago, his book, "Lost in Transformation" was published. And it looks at a 25-year period in South Africa -- it looks at the history of our transition to democracy and Professor Terreblanche has some incredibly special insights into what happened historically in South Africa that informs the current state that the country is in today.
Welcome to SACSIS Professor Terreblanche.
SAMPIE TERREBLANCHE: Thank you.
FAZILA FAROUK: Professor Terreblanche before I ask you to talk about your book, I'd like you to talk a little bit about yourself first for the benefit of our viewers. Tell them about your interest in South Africa's political economy and looking at poverty and inequality in South Africa. How is it that this became your area of specialisation?
SAMPIE TERREBLANCHE: I am an emeritus professor in economics at the University of Stellenbosch. I lectured for almost 50 years at the university and I specialised in economic history, history of economic thought and on modern economic systems. I am not lecturing anymore. In April this year, I turned 80 years and I can look back on a very interesting and challenging life up to now.
There is a special reason why I am writing on the poverty problem. It so happened that I was appointed, in 1973, as a member of the Erika Theron Commission. It was a commission that looked at the socio-economic position of the coloured society in South Africa and I was chairperson of the group in economics and labour, and I became interested in the whole phenomenon of poverty.
I read every American book that was published on the poverty problem, the so-called vicious circle of poverty. I called it the problem of - the position of chronic community poverty - sorry about it.
So in due time, I also became interested in the problem of poverty in the African population group. I published a book in 2002 on The History of Inequality in South Africa from 1652 to 2002, and the book has done quite well. This book, Lost in Transformation, is a re-think about the situation after 10 years and I have reason to be even more pessimistic, as what I have been when I wrote my history of inequality.
FAZILA FAROUK: Well, before I get into talking more generally about the book, and the issues that you raise in this book, I want to focus on one specific issue. I mean, we're in South Africa at the moment, at a sad moment -- Nelson Mandela is lying on his deathbed and, you know, he unfortunately is not going to see his vision of South Africa, which is a fair and just society, and I want to quote something from your book - something, which he said.
You say that on 11 February 1990, the day of Nelson Mandela's release from prison, he made the following statement: "The white monopoly of political power must be ended and we need a fundamental restructuring of our political and economic systems to address the inequalities of apartheid and create a genuine democratic South Africa."
That of course didn't take place in the last 20 years and I want you to focus on one particular thing when you answer this for me today. In the book you contextualise this statement around the fact that he said this, but soon after that, he was having regular meetings with big capital, Harry Oppenheimer, in particular, and you talk about an elite compromise that was reached.
I do want you to talk a little bit - for the benefit of our audience - about the early 90's and the secret meetings and the deals that were struck back then between the ANC and capital in South Africa, because I think that's really very instructive for understanding…it's very instructive for understanding where we are today, why things haven't changed.
SAMPIE TERREBLANCHE: The whole transition process was orchestrated by the minerals-energy-complex (MEC) with Harry Oppenheimer and to a lesser extent Anton Rupert. They organised everything. Early in the 1990's there was regular lunches between Mr. Mandela and Harry Oppenheimer. When I became aware of it, I remember, I was furious. For what must they have lunches? But these lunches developed into regular meetings at Little Brenthurst -- it is the estate of Harry Oppenheimer.
When too many people (attended the) secret meetings, the meetings were shifted to the Development Bank between Johannesburg and Pretoria, normally at night. It was easy to park the cars at the back side of the building, and people on the N1 were not aware of (those) important meetings that (were) taking place there.
And there the ANC was convinced to forget about their ideas of socialism and large scale government intervention, etc. You see, America was at…in the beginning of the 90's in a mood of triumphalism. Their attitude was that the American model has won, that everyone must adapt to the American model. So under the pressure of the South African business sector, with pressure from the Americans, that had quite a vested interest in South Africa, the ANC was to give in.
You see, on the question, "Why have they accepted the neoliberal model of the Americans?" - that is definitely not the correct model for South Africa - is the bargaining power of the business sector and the Americans. But the Americans was also in a position to make use of threatening the ANC, that if you…in a rather diplomatic way they told the ANC, if you are not going to accept our proposals, we can destabilise South Africa.
And there is a third possibility that no one can prove and I can only speculate it. The question is, how (much) money went under the table?
So there's three reasons: convincing the ANC with arguments, threatening them and buying them out. Two or all three was at play at that time, because from May 1992, from May '92, the ANC published a document, "Ready to Govern". In that document it was clear, previously the ANC talked about growth through redistribution - in that document of '92, they talk about redistribution through growth. And, you know, the GEAR policy was announced in 1996 -- the so-called trickle down. If there is growth in the capitalist sector then there will be trickle down to the poor. It is not necessary to have comprehensive redistributive measures, the typical American approach that with growth there will be trickle down.
In November 1993, South Africa was governed by the Transitional Executive Committee, the TEC. There (were) eight National Party members and eight senior members of the ANC and they had a meeting to ask the International Monetary Fund (IMF) for a loan of US$850mn, that we needed for the transition and IMF - of course everything was arranged - was prepared to give the loan, but they had a document, "Statement on Economic Policy". They said, yes, we will give you the money, if everyone, all 16 sign the document.
And if one reads that document, "Statement on Economic Policy", carefully, it is GEAR in embryo form. It is the neoliberal policy. And so, the ANC had no choice.
It was, you know, after…in 1986 already when Gorbachev and Reagan reached an agreement to seek a negotiated settlement for all the flash points in the world. After that (Gorbachev) informed the ANC that he can't get…the Soviet Union can't any longer support the ANC (militarily) and financially.
Now the ANC don't want us to mention that, as they said Gorbachev only told them to look for a diplomatic solution instead of a military solution. But the truth is that Gorbachev realised at that stage that the Soviet Union, after 20 years of Brezhnev, was in a near-bankrupt situation. And it's rather remarkable that the American government put quite a lot of pressure on the National Party from Washington, and that Gorbachev from Moscow was putting pressure on the ANC to seek a solution. But it was a solution, in the end, that the Americans (wanted).
FAZILA FAROUK: Professor Terreblanche, you've been talking about, you know, the pressure that the ANC came under in the early 90's, which forced it, rather than persuaded it, to take on a more neoliberal agenda. However, you know, in the last 10 years or so, particularly, the global geo-politics has shifted substantially. South Africa has now also joined the emerging nations, the BRICS group, and you know, it's a group that's meant to have…meant to be providing a counterbalance in global politics. Why has this new development not in any way influenced the way that the South African economy has developed, particularly over the last few years, and why is that not resulting in any changes that benefit more South Africans?
SAMPIE TERREBLANCHE: You see, America is in such a powerful position; all the countries that became…all the colonial colonies that became independent since the Second World War, (have) in fact been recolonized by the American empire. All these colonies have become satellites, dependent satellites, of the American Empire. Their financial power, the corporative power, the military power, of the United States is so awful. After South Africa has been slotted in, the Americans can't be bothered with what we do, that we join the BRICS countries. I think that is a large mistake. If there is, in the future, a confrontation, between BRICS and United States, the United States can smash us with their financial power, their corporative power.
They let us do our thing, but they are themselves content that they have South Africa completely under their control.
FAZILA FAROUK: Let's talk a little bit in terms of a domestic focus. Let's rather look at capital in South Africa from a domestic perspective -- can you tell us a little bit more about what it will take to bring about some transformation and a bit more of a patriotic orientation in South African capital towards the country. Is it likely to happen?
SAMPIE TERREBLANCHE: The South African capitalist sector are doing excellently. In the last 20 years, in spite of the great recession in America, the South African capitalist sector - look at the prices at the stock exchange - has done excellently. But they are now making their huge profits in foreign countries. We are a sub-empire of the American empire. South African business corporations have become transnational corporations -- have production lines, in China, in Poland, in Brazil, everywhere. So, we are not our own (masters) any longer.
FAZILA FAROUK: What about then, the power of the people, and particularly, the power of more empowered groups in South Africa, for example, South Africa's middle class?
SAMPIE TERREBLANCHE: South Africa's middle class, you see…let me put it this way that 20% of the population is the rich elite, then there (is) 30% that's neither here nor there. They are what one can call a petite bourgeoisie and there is the 50% that is very much impoverished.
That top 20% - 10 million people - receive 75% of total income, 3,7 million of them are white and 6,3 million are black, but the whites are the richer part of that group. The lower 50% of the population (receive) only 8% - less than 8% - of total income. Now it is a shocking situation.
We had a political transformation. Apartheid has been abolished, but the political economic system that was put in its place is an ANC dominated political system and an economic system that (has become) internationalised, that became Americanised, so from the point of view of the lower 50%, nothing of worth (has) happened.
Yes, I must say, there is the social grants for elderly people and the social grants for children. That’s the only positive thing that happened. But it is not good enough. The living conditions of that lower 50%, 25 million people, of which 24 million (are) Africans, (is) rather shocking.
FAZILA FAROUK: I'd like to shift the conversation a little bit to talking about solutions possibly. When we were talking earlier on in preparation for the interview, you said that you are going to be reprinting your book and its going to be translated into Afrikaans and you're going to be adding a few extra pages, a new chapter if you like, and you're going to be talking a little bit about solutions.
I'd really like you to tell us, you know, what you're going to cover by way of, you know, resolving the problems we face in South Africa. But also, in addition to that an interesting thing that you mentioned to me was in 1997, you made a presentation at the TRC, the Truth and Reconciliation Commission, and in talking about South Africa's problems there, what you suggested was that what we needed was a wealth tax. Can you elaborate on that also?
SAMPIE TERREBLANCHE: Yes, I gave evidence in November 1997, a 20-page document, I had the opportunity to read it to the audience. There were business people, Anglo American and others were there. They (were) furious (with) what I was saying. And in the end I proposed a wealth tax.
Now people are saying - some rich people - we shouldn't have been so negative about Sampie's wealth tax. But its now too late. But the government needs more money to upgrade the living conditions of the poor.
You see what one must not forget is that when we accepted the American model, we also accepted the Washington Consensus and according to the Washington Consensus, the ANC can't tax more than 25-26% of the GDP. If we (do) it, (those) credit evaluation organisations like Standard & Poors and Moody's will (degrade) us. So we are trapped.
The government - it is not possible for it. Even if…well…the government, the ANC government, was put in charge of the budget. They can tax people and they can spend it as they like as long as it's not more than 26%.
Now the ANC government has used a large part of the taxed government income in their control for elite transformation. For black economic empowerment, affirmative action, corruption, waste, and they are not pressurised to spend more on the poor, and they are also not in a position to increase taxation to 30% of GDP.
I would have been very happy if it was possible for the government to increase taxation by four or five percent and at least furnish the squatter camps with an infrastructure - with water, sewerage, roads, etc., and to improve the health situation for the mass of people.
Now there is perhaps the possibility that the ANC can get less than 55% next year. If that happened, if that happened, one can say there is a light at the end of the tunnel. At the moment there is no light.
FAZILA FAROUK: And what is that light?
SAMPIE TERREBLANCHE: That light is that the ANC government can be put out of office at an election; that we can become an effective democracy or functioning democracy.
FAZILA FAROUK: So, would you see it as we need a change of government or we need the threat of change to put…to get this government to be more responsive to people's needs.
SAMPIE TERREBLANCHE: Well, take the scenario that they get less than 55% - I think we would be surprised when they are looking in the barrel of a gun, they can lose in the 2019 elections. It is perhaps not necessary to have another government, but a government that are…that the electorate started to call them to accountability.
FAZILA FAROUK: Professor Terreblanche one of the things you mention in your book, not in exact words, but you talk about White privilege in South Africa, and you say that White South Africans are not willing to give up their privileges. Can you talk a little bit more about that?
SAMPIE TERREBLANCHE: You see for a hundred years from say 1894 till 1994, the English speakers and the Afrikaans speakers, were in an (extraordinarily) privileged position. They have entrenched access to power. They have an entrenched access to property. They have an entrenched access to opportunities, educational and others, and to valuable information. While at the same time, the Africans were statutory excluded from power, property, opportunities, valuable information. The Coloureds had a little bit of it and the Indians. Only in the 1980's, the Blacks started to get access to power, property, opportunities, information.
In that 100 years the Whites became rich, became very wealthy, very arrogant, with a rich man's cult of wealth that they don't deserve. Because they became rich, there was unbelievable exploitation of the Black majority.
The Whites were in the beginning of the 20th century, 20% of the population. When the transition took place in '49, they (were) only 10%. Ten percent of the population has all these entrenched privileges. And to look at all these 4x4 cars that can't be bigger than they are, to look at (the) monstrosities of houses that are built -- the arrogance of the White people. They are not educated about their history. None of us deserve what we have because it was a cruel system. It was a system of...(unjust) as can be.
So the Whites will have to make a sacrifice. We cannot grow out of our…this situation. We will have to do something at the top to improve the position of the 50% at the bottom. There is no other way.
FAZILA FAROUK: Professor Terreblanche, I want to thank you so much for spending this time talking to us at SACSIS.
And thank you to our viewers and listeners for joining us at the South African Civil Society Information Service. Remember, if you want more social justice news and analysis, you can get that at our website at www.sacsis.org.za.
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Increase Tax and Respect Human Rights Part 1
It is important to note that politicians and economic theorists could not do anything to bring poverty to an end in the case of a small minority group.
Why did they fail? Maybe Prof Terreblanch can tell us.
What gives him the idea that they can today bring poverty/inequality, disease and unemployment to an end for a vast majority in a country described by some as the rape capital of the world or the "cesspool of ineptitude, corruption and violence that is South Africa"?
I hope that the miseries brought about by chronic disease, old age, poverty in general, as well as underdevelopment, unemployment and inequality can in fact be solved in our lifetime.
Which countries solved their poverty problems and how did they do it?
Which countries solved their inequality problems and how did they do it?
Are inequality and poverty synonyms and why are the cures for both social phenomenons the same?
The time is running out for many people in SA and Africa to ever experience the dignity associated with well-paid work in a healthy environment.
>>"Because they became rich, there was unbelievable exploitation of the Black majority."
This line of reasoning implies that-
1. All whites are rich.
2. All whites are senseless exploiters of black people which is incorrect.
3. All white became rich and affluent because politicians did everything for them and they did nothing for themselves as individuals. Is that a fact?
4. Should everyone become theoretically equally poor no-one has any reason to complain which is also nonsense.
Increase Tax and Respect Human Rights Part 2
Exploitation or discrimination reversed doesn't solve poverty.
It addresses only inequality by creating new victims and that is not a positive outcome.
The SACP/ANC was in fact very successful in disowning the white working class but they did not in the least touched the liberal, rich and influential Anglo American clique in SA that supports Affirmative Action, Employment Equity and BEE in all its corrupt forms.
The contrary is truer. These people that avoid tax with passion are today richer than ever before.
"I know of no other cases in a democracy in which a large majority made it legally mandatory to discriminate against a small minority, save for Malaysia which prompted the Chinese to leave it to form Singapore. When affirmative action is for the benefit of a minority, its effects can be absorbed without the majority being discriminated against, but with our percentages and with the modalities of our BBBEE, radical discrimination ensues.
This mandatory legal discrimination is meant to apply on a purely racial and not economic basis, leaving no hope for the about 760,000 whites who in the past 19 years have moved from a dignified life into squatter camps and below the poverty line. What policy justification can there be to discriminate against them?" Dr Mario Ambrosini IFP MP.
Why must the white working class by the only ones that must suffer?
What have they done wrong accept for being born in the wrong country?
Increase Tax and Respect Human Rights Part 3
The 70,000 nepotistic white families in control of the economy and important occupations including influential newspaper editors, CEO's and CFO's of listed companies, university professors/lecturers and lawyers apparently believe that they are immune against Employment Equity and they give the SACP?ANC reason to keep on discriminating against ordinary white workers.
This must end.
And the only acceptable equalisers are wealth tax and solidarity tax. And if they don't want to pay they must leave the country and never return.
They are as destructive as the drivers of the racist and seditious National Democratic Revolution.
I get the impression that Prof Terreblanch is a NDR denialist. I wonder why because he must have read the policy papers of the ANC.
Joe Slovo said in 1988-
"The basic objectives of liberation cannot be achieved without undermining the accumulated political, social, cultural and economic white privileges. The moulding of our nation will be advanced in direct proportion to the elimination of these accumulated privileges."
The problem is that the "privileges" he is talking about includes human rights such as the right to work and not to be arbitrarily deprived of your private property as per Articles 23 and 17 of the UN Universal Declaration of Human Rights.
The NDR forces all responsible investors to always play close to the exit and that hampers economic growth and job creation.
The Liberation Movement created expectations with the Freedom Charter of 1955 that they cannot deliver and this is going to lead to bloodshed if the SACP?ANC fails to otherwise disown all whites and send them packing.
The 2007 Polokwane Strategy and Tactics of the ANC is officially declare whites as the enemy-
"96. The liberation movement defined the enemy, on the other hand, as the system of white minority domination with the white community being the beneficiaries and defenders of this system. These in turn were made up of workers, middle strata and capitalists. Monopoly capital was identified as the chief enemy of the NDR."
Collective shame, collective innocence and collective punishment have no place in a non-racial constitutional democracy.
Prof Terreblanch should remember that when he again blindly accuses all whites of being rich exploiters - some of us has been unemployed for more than a decade now with no hope to ever return to the labour market.
And before SA don't learn to respect the human rights of every man women and child and don't drastically increase the taxes of the rich and top income earners in the country we have no hope to ever create a better life for all.
Many whites are now part of the poor in the country. Some of them had jobs in the previous regime, but find themselves now in desperate circumstances. We have the tax system in place, but I agree that we need to do more to address the plight of the poor. The only plan I can think of is an accolade system where the relevant affluent individual (black or white or other) or company gets accolades every time they give money or other resources to Non-Government Organisations (NGO's). Furthermore, NGO's, to qualify for the assistance and to prevent corruption, have to publish their yearly financial reports on time. If we do not act soon, NGO's (for example the Child & Youth Community Centers) may need to close with more children being left completely impoverished, wondering the streets.
On the ANCs "Turn-About" and GEAR
Interesting formulation: "there the ANC was convinced to forget about their ideas of socialism and large scale government intervention..."
This is of course nonsense! The ANCs acclaimed "The Freedom Charter" (1956) was in large written (formulated) by members of the South African Communist Party, SACP (check Rusty Bernstein's biography and the work by Stephen Clingman on Braam Fischer, etc.) who were still being influenced by the "Popular Front" strategy introduced by Joe Stalin in 1936 after the debacle of the "class-against-class" ultra-leftism from 1928 in the ComIntern that led to the defeat of the German Revolution and later Spain and China. No, it was an "accommodation" with the liberal bourgeoisie and its political parties that was "the new line" till the Soviet Union's demise in 1989! But this is history and should be Common Knowledge to most militants.
Hence the "statist" clauses and its ambiguously formulated clauses on "common ownership by the people" and hence of "nationalisation". This hangover continued till today!
The bourgeois media also generally associates any call for "nationalisation" with socialism (however defined) and, by implication, with trade unions and worker movements.
"Democratic Socialism" has, therefore, become a blanket term promising much to the downtrodden working classes and the sellers of labour (also the "salariat"), but a term hiding a multitude of agendas they assume.
And this is no new debate; it is something that has arisen time and again over more than a century, encouraged by
- the idea among most groups of the political pseudo-Left that some governments, however repressive, were or are in control of "Deformed/Degenerated Workers' States" (sic-k!), or by "State Socialisms", which also provided for cradle to the grave welfare, etc.
Nationalisation, in such cases, was, and is, deemed - especially by orthodox communist parties such as the SACP - to be in the interests of workers.
Which is why some Cosatu unions and many Leftist smaller parties argue, that if and when "A (radical) Workers' Party" comes to power, state control will equal worker control and or workers' power.
But examples such as the former Soviet Union, China and North Korea do not seem to hold out much hope for workers’ rights. The often brutal systems in such states were excused by the late SACP chairman, Joe Slovo, as examples of "socialism where the element of democracy is missing" where he tried to hide the sins and mistakes (since 1917) of the Bolsheviks and of the Stalinists States after the Great War - 1945.
In any event, the simple "nationalisation equals socialism" equation, widely touted within parts of the trade union movement, has become difficult to sustain.
Apartheid South Africa had a higher proportion of its industry nationalised than did "socialist" Czechoslovakia. As our Stellenbosch economist , Sampie Terreblanche, noted in a television debate in the early 1990s:
- if nationalisation made Czechoslovakia socialist, then apartheid was also a socialist construction.
However, 20 years after the formal demise of Apartheid in 1994, it is shocking to learn that 'about 78% of Mining Corporations do not pay tax. They only contribute 2.5% to the National Fiscus, 7.8% to GDP yet more than 50% of our exports is composed minerals and related products'.
The country is being ripped off massively by the very imperialist Institutions that funded the Apartheid system and celebrated the super-exploitation of African workers. Unemployment is standing at 25.2 (up to 40-50% in some areas!) as per the Labour Force report of 2013 Q1 and more than 70% of unemployed are Youth aged 25-34.
On the other hand, about 3.3 million young people between the age of 15-34 are not employed nor studying. Inequality, unemployment and poverty is what South Africa has become and 20 years after the mistaken freedom workers and working class communities are still made to believe that there's a Madiba magic, which only worked for the highly performing National Rugby Club, yet unable to resolve the crisis facing the country.
The policies with which the (pro-)capitalist ANC is trying to deal with the various aspects of this crisis are not working and in most cases they appear to make problems worse. The recently developed NDP-2030 believes that 90% of the job creation target will come from SMMEs which have proven to be failing due to structural challenges and other factors but this reveals the unwillingness, on the part of ANC, to untie relations with Imperialism which they prefer to call 'foreign investment'.
@ http://www.counterpunch.org/2012/12/28/the-anc-and-the-exploitation- of-south-africa/
South Africa: The Marikana Massacre and the New Wave of Workers' Struggle,
Very Interesting Response from Raymond Suttner
A very interesting response to this interview from Raymond Suttner:
"the whole transition process was orchestrated by the minerals-energy-complex"
This sounds a little conspiratorial to me. Where is the black agency in this narrative? I find myself deeply suspicious of an account of the South African transition that suggests, like Naomi Klein, that whites determined everything and blacks were too naive to know what was going on. Is there no such thing as class difference within the black community? Within the liberation movement?
Was not Thabo Mbeki an astute observer of the international scene and well aware that with the collapse of the USSR socialism was a non-starter? What about Mandela's own stated view that it was his visit to Davos that made him realise that nationalisation was an outdated idea?
Love how these old Afrikaner guys, who benefited from Apartheid, now say whites (who were not even born under Apartheid - and some who do not have names like Sampie and did not benefit to the extent the Afrikaner did) must make sacrifices. I tell you what. Impose a once off tax on these old guys, put them in the poor home and lets see them sing a new tune. So tired of all this drivel. Just wish somebody would actually have a a plan to get us past this nonsense to a point where we are talking about building the economy, not the haves making sacrifices - SO EFFING NEGATIVE.
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Is self-determination for Afrikaners not the appropriate way to deal with this problem.