ANC Today

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Volume 6, No. 25, 30 June-6 July 2006
 
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THIS WEEK:

* Letter from the President: The revolutionary tasks of the Mandarins 
* Local Government: Development is a joint effort 
* SACP Discussion Document: The Communist Assault on the Year 1996 

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LETTER FROM THE PRESIDENT

The revolutionary tasks of the Mandarins

Recently we participated in the 30th Anniversary and Corporate Gala Dinner of
the Black Management Forum (BMF). Among other things, the distinguished
participants at this Dinner convened to celebrate the establishment of the BMF
30 years ago, in 1976, the year of the Soweto Uprising.

This occasion confirmed that the BMF was established as part of the revolt of
the oppressed masses of our country against apartheid, and remains, to this day,
an organisation of professionals dedicated to the cause of the genuine and all-
round emancipation of our people.

The BMF is therefore faced with the critical challenge to discharge its
obligations as one of the central architects of the new South Africa that is
striving to be born.

And yet ahead of the Gala Dinner, the founding President of the BMF, Eric
Mafuna, made some critical remarks about the BMF, which all of us must take
seriously. In particular he said:

"I look back in disappointment that we have not produced our own black managers
from this Forum...Where are the institutions that train young black managers?
BMF hasn't even produced a single admin clerk, yet we're 30 years down the
line...We are reaping the benefits of democracy, but we have stopped planting."

Another founder member of the BMF, Reuel Khoza, said, "I submit that the
challenge facing BMF, 30 years after its inception, is how to effectively combat
the forces of institutional entropy that, seemingly inevitably, undermine
organisational effectiveness and sap institutional vitality. We dare not allow
BMF to atrophy."

A newspaper report quoted one of the former Presidents of the BMF, Bheki Sibiya,
as saying that "there was a need to implement broad-based black economic
empowerment (BBBEE) properly". He said: "Economic growth is sanity, poverty
alleviation is reality. For us if BBBEE does not contribute very significantly
to the reduction of poverty, there are some people who will come to our graves
and spit at them, however rich we may be...It is imperative we partner with
people who need 'our hand up' to succeed."

The celebration of the 30th Anniversary of the establishment of the BMF draws
sharp focus to the need for the national democratic revolution to pay particular
attention to an important echelon of our national leadership -the Managers,
(elsewhere described after the pre-democratic revolution Chinese Confucian
professional, and highly educated senior public servants, as "the Mandarins").

In Chapter 10, our Constitution imposes serious obligations on our "Public
Administration". These prescriptions emphasise the critical importance of 'the
Mandarins' to the effort to achieve the fundamental social transformation of our
country. The Constitution says that the principles that must inform the
functioning of our Public Administration include:

* a high standard of professional ethics; 
* efficient, economic and effective use of resources; 
* orientation to development; 
* response to the needs of the people; 
* encouragement of public participation in policy-making; 
* development of the potential of all public servants, through good human
resource management and career development; and, 
* proper accountability of the public servants. 

Our Public Administration consists of more than one-and-a-quarter-million
people. In terms of responsibility and skill, its members range from our
Directors General, corporate CEOs and professionals, to 'span' managers and
unskilled workers. The state entity described as our Public Administration is
the biggest and most complex multi-task organisation in our country.

In terms of our Constitution, this Public Administration has the responsibility,
among other things, to help:

heal the divisions of the past and establish a society based on democratic
values, social justice and fundamental human rights; improve the quality of life
of all citizens and free the potential of each person; and, build a united and
democratic South Africa able to take its rightful place as a sovereign state in
the family of nations. Obviously, an organisation as big, varied and
differentiated as our Public Administration, and charged with the task to
contribute to the fulfilment of these fundamentally important tasks, requires a
skilled, educated and dedicated leadership cadre.

It needs at its head its own 'Mandarins' - the skilled managerial leadership
without which it cannot function as one coherent machine, loyal to the Public
Administration principles specified in our Constitution - as well as the overall
leadership of the national democratic revolution.

With regard to what we have just said, there are some who belong within the
broad democratic movement, who see this as a threat to genuinely progressive
change. Accordingly, these descry what they describe as "a powerful political-
technical-managerial centre within the state, focused around the presidency with
close ties to key departments, notably Treasury and Trade and Industry".

This opinion is further reinforced by the assertion that "(an unacceptably)
strong presidential centre within the state...(has as) its leading cadre...a new
political elite (state managers and technologically-inclined ministers) and
(often overlapping with them) a new generation of black private sector BEE
managers/capitalists."

The fact of the matter, however, is that the national democratic revolution will
not succeed without training, developing and putting in positions of authority
its own 'Mandarins', properly defined.

In this regard we must emphasise that none of these Mandarins need be members of
the ANC. Indeed it is prohibited that anybody should be admitted into, or
excluded from the ranks of the Public Administration, on the basis of their
membership of, or attitude towards the ANC.

However, as part of the public sector "political-technical-managerial centre",
our 'Mandarins' must necessarily be committed to the objectives reflected in our
Constitution, to build a united, democratic, non-racial, non-sexist and
prosperous South Africa, committed to promoting the liberty, equality and human
dignity of each and everyone of our citizens.

The leader of the Russian Revolution, Lenin, entitled one of his last
significant writings, published in 1923, "Better fewer, but better". In this
treatise, written five years after the victory of the Russian Revolution, he
addressed the challenges of establishing an efficient and effective
developmental state machinery, arguing that without this, the revolution would
fail. Among other things he said:

"We ought to at once announce a contest in the compilation of two or more
textbooks on the organisation of labour in general, and on management in
particular...

"We ought to send several qualified and conscientious people to Germany, or to
Britain, to collect literature and to study this question. I mention Britain in
case it is found impossible to send people to the USA or Canada...

"In all spheres of social, economic and political relationships we are
'frightfully' revolutionary. But as regards precedence, the observance of the
forms and rites of office management, our 'revolutionariness' often gives way to
the mustiest routine...

"In our country these unusually bold theoretical constructions assumed an
unusually lopsided character. Theoretical audacity in general constructions went
hand in hand with amazing timidity as regards certain very minor reforms in
office routine..."

We have set ourselves the task to achieve a better life for all. In this
context, we have resolved that through the Accelerated and Shared Growth
Initiative (ASGISA), we will achieve an economic growth rate of 6% and more.
This will require that we continue to restructure, modernise and expand our
economy, and improve its international competitiveness.

The democratic state will continue to play an important role with regard to the
realisation of these objectives, to promote the goals of the reduction and
eradication of unemployment, poverty and underdevelopment.

At the same time, within the context of a mixed public and private sector
economy, the democratic state will continue to do everything possible to
persuade and influence its social partners, business, labour and civil society,
practically to engage these challenges.

In this regard, our government recognises the important reality that especially
in all its ranks, covering all spheres of government, it needs a properly
empowered management and professional echelon, truly committed to the
fundamental social transformation of our country.

In this regard, we must agree with Reuel Khoza that an important national
institution, such as the BMF, must join the struggle "effectively (to) combat
the forces of institutional entropy that, seemingly inevitably, undermine
organisational effectiveness and sap institutional vitality. We dare not allow
BMF to atrophy."

In this context, we must respond to the challenge placed at our feet by Eric
Mafuna, when he said: "We are reaping the benefits of democracy, but we have
stopped planting."

Our democratic state must continue to pay attention to the challenge to develop
an effective and relevant Public Administration, led by our own special
'Mandarins'.

Recognising the fact that ours is a mixed economy, our government will also
continue to engage the "new generation of black private sector BEE
managers/capitalists", as well as the old generation of managers and
capitalists, to encourage them to contribute to the central objective of
providing a better life for all our people.

In this regard, as practical revolutionaries, we will continue to work hard to
produce the public and private sector 'Mandarins' we need, who "have (all the)
elements of knowledge, education and training" that do not signify that "they
are ridiculously inadequate compared with all other countries", to use Lenin's
words.

Our congratulations to the BMF on this 30th Anniversary therefore also
constitute a call both to the public and the private sectors, that our national
challenges, based in good measure on building a successful economy, capable of
addressing the needs of the people, requires that we put in the appropriate
command positions, properly prepared 'Mandarins'.

Thabo Mbeki

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LOCAL GOVERNMENT <Viewpoint - Sydney Mufamadi>

Development is a joint effort

The meeting of the National Members Assembly of the South African Local
Government Association (SALGA) in Durban this week took place exactly fifty-one
years after 3,000 men and women met in Kliptown to give us an important landmark
in the history of our country. They met as delegates to the historic Congress of
the People to put forward the alternative perspective according to which a
normal society needed to be organised. Driven by undying loyalty to their
country, and abiding love for the people, they sought to overthrow the apartheid
paradigm whose central purpose was to construct the overwhelming majority of our
people into inferiority.

In one voice, they denounced the then organs of state power whose organising
logic was to manage the exclusion of the majority from mainstream political,
economic and social opportunities.

Those of us who cherish the cause of freedom are moved by the exploits of the
'Class of 1955', to honour their courage and their determination. We know that
the road which they traveled was hard and stormy. We know that their resilience
in the face of adversity has issued into the reality of a new South Africa.
Theirs is a perspective whose time is upon us, shaping the dynamics of the new
South Africa. The optimism of their language was prescient. Evidence of this is
the fact that SALGA assembly of elected local representatives of our people took
place in conditions of freedom. The existence of this assembly serves to confirm
the reality that what the freedom fighters of 1955 envisioned then, has indeed
come to pass.

Those assembled in Durban this past week are the second generation of local
public representatives elected under a truly democratic local government
dispensation. History has entrusted them with the responsibility to negotiate
such obstacles as stand in the way of local government attaining the purposes of
its establishment. Not only do they have the privilege of building on the
foundations laid in the aftermath of the 1994 democratic breakthrough, but also
have the benefit of a privilege which is not often available to practitioners:
the benefit of hindsight.

The councillor induction training programme, organised jointly by SALGA and the
Department for Provincial and Local Government (DPLG), aims to familiarise
councillors with the system within and through which they will to discharge
their obligations to the country and the people. The idea therefore, is to equip
both councilors and managers with the ability to understand and navigate the
governance and developmental landscape.

Given the point at which they are coming into the system, they will need to
familiarise themselves with the original conception of the trajectory of local
government transformation. In the process, they will see the mixed results of
our efforts: some of our municipalities have done exceedingly well, while others
have made modest achievements. Yet others have been battling in an attempt to
carry out their constitutionally-mandated responsibilities. Patterns of deviance
must be studied and fully understood, bearing in mind the fact that success
depends on not allowing wrong practices (be they practices by councillors or
civil servants) to escalate out of political control.

Notwithstanding the many difficulties experienced by local government in the
last five-and-half years, some of our recent successes have enhanced our
confidence in our collective ability to meaningfully advance towards our goal of
bringing about universal access to basic services. For instance, between
February 2005 and May 2006, we reduced the number of households that use buckets
for sanitation from 291,888 to 165,962. As of March 2005, 72% of households in
the country already have access to electricity.

These and the numerous other positive trends were buttressed by steady, yet
decisive achievements following the interventions we made and are continuing to
make in targeted municipalities. For instance the JS Moroka and the Matjhabeng
municipalities are now firmly set to achieve the levels of financial viability
which have eluded them for a long time. The Mafikeng municipality, after failing
to submit financial statements for five years, has now, for the first time,
submitted financial statements.

Working together with National Treasury and several national and provincial
departments, we are succeeding to raise the capacity of municipalities to spend
their allocations intended for the development of municipal infrastructure. As
at April 2006, all of the municipal infrastructure grants earmarked for the
period had been transferred to municipalities and the rate of spending stood at
73%.

The inter-sphere coperation we have been forging around implementation of
municipal infrastructure targets, and the positive results arising therefrom,
have served to crystallise the relevance to the mandate of local government of
what national and provincial government departments do day-to-day. It teaches us
the salutary lesson that we must visualise development as an outcome of a joint
effort, a partnership which transcends the 'them' and 'us' distinction.

These positive trends can only be sustained if SALGA and the DPLG principally
are fully conscious of their responsibility to and within our entire system of
government. These two role players have to fortify their place at the centre of
the intergovernmental process. They must place themselves in a position better
to coordinate inter sphere planning, budgeting and implementation processes.
This will enable us to avoid duplication and unfocused use of resources.

Because we are becoming better focused as we continue to look for more effective
ways of operating in accordance with the letter and spirit of our
Intergovernmental Relations Framework Act, it is also becoming possible to
harness an unprecedented number of actual and prospective non-governmental
partners to the now commonly accepted task of providing hands-on support to our
municipalities.

These are responding to our call in part because they can see that we are
getting organised enough to, in turn, enable them to become informed, public-
spirited citizens who can usefully dedicate some of their own resources to the
task of accomplishing the crucially important goal of improving the functional
status of our municipalities. It is reassuring to know that more and more
citizens - individual and corporate - are actively showing the burning desire to
work with us for the achievement of a prosperous and better South Africa.

The cooperation between us and these organisations augurs well for our objective
of accelerating growth rates and cultivating allocative patterns which will
increase the share in that growth of those who were consigned to a position of
marginal existence. The promise to raise growth rates depends on an ambitious
target, namely, the removal of the binding constraints. Growth in our localities
will crucially depend on attracting investments to these areas. In this context,
binding constraints include:

* poorly managed towns and cities; 

* municipalities with labyrinthine administrations; 

* municipalities with utterly inadequate infrastructure; 

* municipalities which do not come across as being committed to upholding the
certainty of the rule of law. 

All these 'binding constraints' and others issue into a material environment
which is inhospitable to growth-inducing investments.

Among the organisations with whom we are cooperating is the Business Trust. This
organisation generously acceded to our request to help conduct a process of
developing economic profiles of municipalities. This economic profiling process
is meant, among other things, to provide a firm foundation for the stakeholder
mobilisation towards the convening of economic development summits in all our
district and metropolitan municipalities. These summits have to take place by no
later than 1 March 2007. For those municipalities which may not have started
with the necessary preparations, the time to do so is now. As they go about
their work, they can count on the support which must and will be given to them
by their partners within our multi-sphered system of government.

If there is one thing I am certain about, it is the certainty of our success.
That success is the only monument we can build to the steadfast loyalty of the
'Class of 1955', and to the many sacrifices they made make this, our country, a
worthy place to live in.

** Sydney Mufamadi is an ANC National Executive Committee member and Minister of
Provincial and Local Government. This is an edited version of a speech to the
South African Local Government Association (SALGA) Members Assembly, Durban, 25
June 2006.

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SACP DISCUSSION DOCUMENT

The Communist Assault on the Year 1996

As reported in last week's article, 'God save us from the false prophets', in
its Discussion Document, the Central Committee of the SACP says:

"The...dominant state project since around 1996 has been the former - to drive a
process of restoration of capitalist accumulation. The overriding objective has
been to create conditions for a sustained 6% (capitalist-driven) growth path.
The assumption is that only such a growth path will provide the resources with
which to address the developmental challenges we all agree are critical
(racialised inequality, unemployment, poverty, socio-economic duality, etc.)...
Relative to the pre-1994 reality, the restoration project is progressive.

"But relative to the transformational potential of the 1994 conjuncture, this
project represents a serious strategic setback for the working class (and the
national democratic revolution)..."

The question therefore arises - what happened in 1996 that distinguishes this
year as the decisive moment when "the dominant state project... (translated into
a set of measures designed) to drive a process of restoration of capitalist
accumulation."

As is obvious from the article on 'False Prophets', capitalist accumulation
characterised the capitalist system in our country in 1994, as we achieved our
liberation, as well as in 1996, in the same way that it characterises capitalism
everywhere else in the world.

Therefore, the assertion in the Discussion Document concerning "a process of
restoration of capitalist accumulation", allegedly embarked upon by our movement
and government from 1996, has absolutely no meaning. Since ours was a capitalist
economy, capitalist accumulation was an established fact. It required no
intervention to "restore" it.

With regard to the "restoration" thesis, once again the problem we face is that
we are confronted by a supposedly Marxist interpretation of our reality by
"Marxists" who have not taken the trouble to study and understand Marxism. This
is what has led to the absurd proposition about the 'restoration of capitalist
accumulation'.

This absurd assertion, we assume, derives from the continuing opposition of the
SACP to GEAR (Growth, Employment and Redistribution: A Macroeconomic Strategy,
1996). Our adoption of GEAR in 1996 is what gives this year its special
significance, leading to the claim that this is the decisive moment when our
movement and government betrayed the revolution.

GEAR, of course, sought to address the challenge of our macro-­economic
balances. It also argued for the achievement of a 6% economic growth rate, or
more. It resulted in the implementation of interrelated measures essentially
targeted at achieving particular interrelated macro-economic objectives.

In its Discussion Document, the CC SACP conveys its conclusion that it was
precisely these measures that "drive a process of restoration of capitalist
accumulation" and "represent a serious strategic setback for the working class
(and the national democratic revolution)..."

Inevitably, we must therefore reflect on what GEAR meant and means, and its role
and place within the context of the functioning of our essentially capitalist
economy .

Among other things, the GEAR document said that to respond to our economic
challenges, we had to put in place "an Integrated Strategy". It went on to say
that 

"the core elements of the integrated strategy are:

* a renewed focus on budget reform to strengthen the redistributive thrust of
expenditure; 

* a faster fiscal deficit reduction programme to contain debt service
obligations, counter inflation and free resources for investment; 

* an exchange rate policy to keep the real effective rate stable at a
competitive level; 

* consistent monetary policy to prevent a resurgence of inflation: 

* a further step in the gradual relaxation of exchange controls; 

* a reduction in tariffs to contain input prices and facilitate industrial
restructuring, compensating partially for the exchange rate depreciation; 

* tax incentives to stimulate new investment in competitive and labour absorbing
projects; 

* speeding up the restructuring of state assets to optimise investment
resources; 

* an expansionary infrastructure programme to address service deficiencies and
backlogs; 

* an appropriately structured flexibility within the collective bargaining
system; 

* a strengthened levy system to fund training on a scale commensurate with
needs; 

* an expansion of trade and investment flows in Southern Africa; and 

* a commitment to the implementation of stable and coordinated policies. 

"It is Government's conviction that we have to mobilise all our energy in a new
burst of economic activity. This will need to break current constraints and
catapult the economy to the higher levels of growth, development and employment
needed to provide a better life for all South Africans. We are confident that
our social partners will join us in the combined efforts needed to achieve this
goal."

In what way do these objectives constitute "a serious strategic setback for the
working class (and the national democratic revolution)"!

In this article, we will not discuss all the elements reflected in the
"integrated plan" contained in GEAR, as reflected above. However, we recall that
at the height of the "left" challenge to GEAR, the reduction of the budget
deficit, as indicated in the excerpt above, was one of the issues raised as
representing a betrayal of the revolution.

The charge was made that such reduction of the budget deficit, together with the
other measures, represented the implementation by our movement and government of
a "neo-liberal" project, informed by ideological adherence to the "Washington
Consensus".

For our part, we were convinced that sustained high budget deficits would serve
as a serious obstacle to the achievement of the goals defined in the
Reconstruction and Development Programme (RDP).

In any event, the RDP, as adopted by the Alliance, had given some specific
directions that the ANC-led government had to respect. The RDP said:

"Financing the RDP presents both a challenge and an opportunity to revive our
economy and set it on a path to sustained reconstruction and development. We
must finance the RDP in ways that preserve macro-economic balances, especially
in terms of avoiding undue inflation and balance-of-payments difficulties. This
requires a strategic approach that combines public and private sector funding,
taking into account the sequence and timing of funding sources and programmes.

Before this, the document issued in 1992, "Ready to Govern", reflecting
guidelines adopted at the 1991 ANC National Conference had said: "Emphasis will
be placed on macroeconomic balance, including price stability and balance of
payments equilibrium... The democratic state will exercise fiscal discipline in
order to avoid inflation."

Responding to all this, among other things the September 1994 Government RDP
White Paper said:

"The Government has already acted decisively to bring about a structured change
in fiscal policy and this will begin to have the desired macro-economic effects.
The immediate challenge facing the Government was the need to finance and staff
the RDP without exacerbating the unacceptably high government debt.

"In particular, consumption expenditure has risen to more than 20 per cent of
GDP and interest repayment is absorbing more than 17 per cent of the Budget.

"Increasingly, the market evaluation of such a situation was that the Government
could not curb expenditure, dissaving would continue, the balance of payments
would be adversely affected and that inflation would rise. As a result, interest
rates subsequently rose which, in turn, increased the government debt burden. In
the context of such macro-economic instability, other crucial objectives would
be undermined."

Why then does the SACP Discussion Document consider the continuum of decisions
taken by the 1991 ANC National Conference, the Alliance process that produced
the RDP, the consequent 1994 Government RDP White Paper, and the resultant 1996
GEAR "a serious strategic setback for the working class (and the national
democratic revolution)"!

Throughout all these instances, our movement understood and sought to take into
account a number of related issues. It considered that:

* unsustainably high budget deficits would divert public resources away from
meeting the needs of the people, to paying the money lenders, to service the
national debt; 

* diversion of national wealth to the public sector, especially to finance
consumption expenditure, would reduce the resources that should be devoted to
productive investment and the expansion of the economy; 

* public sector dissaving, arising out of unacceptably high budget deficits,
would push up interest rates, which would increase the public debt and the cost
of credit needed to finance higher rates of economic growth; 

* the resultant inflation would, among other things, reduce the real earnings,
and therefore the standard of living, of the working people and those living on
pensions and other social grants; and, 

* the balance-of-payments would go into unsustainable deficit, precipitating a
chain of events that would result in job losses and growing impoverishment. 

GEAR was put in place to ensure that we avoid these highly negative consequences
for our country and working people. At the same time, and correctly, it sought
to give expression to policy directions that had been decided both by the ANC
and our Alliance as a whole.

Yet, our 21st century "Marxists" have made the determination that the measures
we introduced in 1996 constitute "a serious strategic setback for the working
class (and the national democratic revolution)"!

Let us however report what Karl Marx said about the phenomenon of budget
deficits in a capitalist economy. This will help us to distinguish demagogy
posing as progressive political economy, resulting in dangerous political
adventurism, from genuinely progressive political economy, which helps to inform
correct revolutionary interventions in the economy.

In his seminal work, "Das Kapital", which is fundamental to the understanding of
the regularities of the capitalist system, certainly by those who claim to be
Marxists, Karl Marx discussed the important issues of budget deficits, the
national debt, fiscal policies and the development of capitalism.

We will now proceed to quote an excerpt from "Das Kapital" at some length, to
assist us properly to understand the issue of macro-economic balances. Marx
wrote:

"The system of public credit, i.e., of national debts, whose origin we discover
in Genoa and Venice as early as the Middle Ages, took possession of Europe
generally during the manufacturing period. The colonial system with its maritime
trade and commercial wars served as a forcing-house for it. Thus it first took
root in Holland.

"National debts, i.e., the alienation of the state - whether despotic,
constitutional or republican -marked with its stamp the capitalistic era. The
only part of the so-called national wealth that actually enters into the
collective possession of modern peoples is their national debt. Hence, as a
necessary consequence, the modem doctrine that a nation becomes the richer the
more deeply it is in debt. Public credit becomes the credo of capital.

"And with the rise of national debt-making, want of faith in the national debt
takes the place of the blasphemy against the Holy Ghost, which may not be
forgiven.

"The public debt becomes one of the most powerful levers of primitive
accumulation. As with the stroke of an enchanter's wand, it endows barren money
with the power of breeding and thus turns it into capital, without the necessity
of its exposing itself to the troubles and risks inseparable from its employment
in industry or even in usury.

"The state-creditors actually give nothing away, for the sum lent is transformed
into public bonds, easily negotiable, which go on functioning in their hands
just as so much hard cash would...

"With the national debt arose an international credit system, which often
conceals one of the sources of primitive accumulation in this or that people.
Thus the villainies of the Venetian thieving system formed one of the secret
bases of the capital-wealth of Holland to whom Venice in her decadence lent
large sums of money. So also was it with Holland and England.

"By the beginning of the 18th century the Dutch manufactures were far
outstripped, Holland had ceased to be the nation preponderant in commerce and
industry. One of its main lines of business, therefore, from 1701-1776, is the
lending out of enormous amounts of capital, especially to its great rival
England.

"The same thing is going on today between England and the United States, A great
deal of capital, which appears to-day in the United States without any
certificate of birth, was yesterday, in England, the capitalised blood of
children.

"As the national debt finds its support in the public revenue, which must cover
the yearly payments for interest, &c., the modern system of taxation was the
necessary complement of the system of national loans. The loans enable the
government to meet extraordinary expenses, without the tax-payers feeling it
immediately, but they necessitate, as a consequence, increased taxes.

"On the other hand, the raising of taxation caused by the accumulation of debts
contracted one after another, compels the government always to have recourse to
new loans for new extraordinary expenses.

"Modern fiscality, whose pivot is formed by taxes on the most necessary means of
subsistence (thereby increasing their price), thus contains within itself the
germ of automatic progression. Over­taxation is not an incident, but rather a
principle.

"In Holland, therefore, where this system was first inaugurated, the great
patriot, DeWitt, has in his 'Maxims' extolled it as the best system for making
the wage-labourer submissive, frugal, industrious, and overburdened with labour.

"The destructive influence that it exercises on the condition of the wage-
labourer concerns us less however, here, than the forcible expropriation,
resulting from it, of peasants, artisans, and in a word, all elements of the
lower middle-class. On this there are not two opinions, even among the bourgeois
economists. Its expropriating efficacy is still further heightened by the system
of protection, which forms one of its integral parts.

"The great part that the public debt, and the fiscal system corresponding with
it, has played in the capitalisation of wealth and the expropriation of the
masses, has led many writers, like Cobbett, Doubleday and others, to seek in
this, incorrectly, the fundamental cause of the misery of the modern peoples..."

From 1996, and even before, our movement and government intervened to stop what
Karl Marx described as "the alienation of the state", and "the expropriation of
the masses", which would be brought about by increasing the indebtedness of the
democratic state to the capitalist money lenders.

By this means, we sought to protect the working people from the burden of paying
the national debt, which Marx described as "the only part of the so-called
national wealth that actually enters into the collective possession of modern
peoples".

We sought to avoid the eventuality, recognised even by the early bourgeois
economists, that the national debt, originating from high budget deficits,
should serve as "the best system for making the wage-labourer submissive,
frugal, industrious, and overburdened with labour".

We did not want that the national debt, deriving from high budget deficits,
should, in our country, "become one of the most powerful levers of primitive
(capitalist) accumulation", "taking the place of the blasphemy against the Holy
Ghost, which may not be forgiven."

Strangely, it is the "Marxist" SACP, in its Discussion Document, that has so
taken to the worship of the national debt, that it came to consider the
reduction of the budget deficit, among the other measures contained in GEAR, as
the height of blasphemy!

On this basis, it has proclaimed as loudly as it can, that the year 1996 marks
the moment when the democratic state embarked on a project that constitutes "a
serious strategic setback for the working class (and the national democratic
revolution)"!

Throughout the period since 1996, and before, when we took firm action to bring
the national debt under control, our movement and government have ensured that
under no circumstances would we reduce the public resources available to
discharge our RDP commitment to "meet the needs of the people".

Our actions in this regard stood in direct opposition to the normal "structural
adjustment" prescriptions of the Bretton Woods institutions, as well as the
related ideological posture represented by the "Washington Consensus".

Beside empty rhetoric, there is no factual information in terms of which, since
1996, and therefore the implementation of GEAR, our government has reduced the
social wage that benefits the poor of our country, or otherwise impoverished the
masses of our working people.

There is nothing to substantiate the assertion that 1996 represents the great
moment of the betrayal of the working people by the ANC and the democratic state
- the moment the SACP describes as marking the adoption of the defining
"project" of the "restoration of capitalist accumulation", directed against the
vital interests of our workers and working people.

There was nothing wrong with the year 1996. There was everything wrong with the
assessment of this year by our 21st century "Marxists", who ended up as the
great defenders of the interests of the money-lending owners of financial
capital, who are interested to see the democratic state beholden to them as a
debtor.

Contrary to the strangely dismissive remarks of our 21st century "Marxists", we
must do everything to achieve economic growth rates of 6% and more, relying on
both the public and private sectors, as the RDP document said.

The achievement of this objective would indeed provide us with the wealth we
need to confront the serious challenges of unemployment, poverty and
underdevelopment, which the national democratic revolution is committed to
reduce and eradicate.

Perhaps not surprisingly, these 21st century "Marxists" do not even understand
that Karl Marx's celebration of the revolutionary potential of the capitalist
mode of production centred on its capacity to develop the means of production
and organise the productive process to the point where, objectively, through
high growth rates, it would be possible to generate the wealth needed to meet
the needs of the people.

Marx and Engels argued that the only fetter that would deny this possibility
would be the capitalist relations of production that would have created the
possibility for, and the reality of, high economic growth rates.

In a famous passage in "Das Kapital", Kar1 Marx writes:

"One capitalist always kills many. Hand in hand with this centralisation, or
this expropriation of many capitalists by few, develop, on an ever-extending
scale, the co-operative form of the labour-process, the conscious technical
application of science, the methodical cultivation of the soil, the
transformation of the instruments of labour into instruments of labour only
usable in common, the economising of all means of production by their use as
means of production of combined, socialised labour, the entanglement of all
peoples in the net of the world-market, and with this, the international
character of the capitalist regime.

"Along with the constantly diminishing number of the magnates of capital, who
usurp and monopolise all advantages of this process of transformation, grows the
mass of misery, oppression, slavery, degradation, exploitation; but with this
too grows the revolt of the working class, a class always increasing in numbers,
and disciplined, united, organised by the very mechanism of the process of
capitalist production itself.

''The monopoly of capital becomes a fetter upon the mode of production, which
has sprung up and flourished along with, and under it. Centralisation of the
means of production and socialisation of labour at last reach a point where they
become incompatible with their capitalist integument. This integument is burst
asunder. The knell of capitalist private property sounds. The expropriators are
expropriated."

The SACP Discussion Document calls on the ANC to undertake a
"revolutionary/systemic transformation of society that begins to resolve the
inherent contradiction in favour of the working class and its popular allies".

At the same time, it says nothing about the directly related matter, whether
"centralisation of the means of production and socialisation of labour (have) at
last reached a point where they become incompatible with their capitalist
integument".

This is the point at which, according to Marx, objective conditions emerge for
revolutionary socialist change, and therefore the 'resolution of the inherent
contradiction in favour of the working class', which it calls for.

In his Budget Speech on 21 February 2001, the year of the 5th anniversary of the
adoption of GEAR, our Minister of Finance, Trevor Manuel, said:

"The 2001 Budget brings to this House the fruit of the macroeconomic transition
we have undergone. Our 1996 strategy was designed to achieve stability, fiscal
reprioritisation and consolidation to create the basis for sustainable growth
and development. It focused on reversing the growth of debt, unsustainable
deficits and the rising burden of interest payments, which threatened our young
democracy.

"It was designed to ensure that a greater share of resources went to key
priority areas such as education, health and social welfare targeted to the
poor. It aimed to put the economy on a sound footing, improve competitiveness
and strengthen access to global markets.

"Today we can say that macroeconomic stability and fiscal consolidation have
been achieved and we can move to the next phase of economic reforms.

"It is instructive to reflect on how different things might have been. Debt
service costs rose during the 1990s from 15 per cent to over 20 per cent of the
budget in 1998/99, steadily eroding the resources available for delivery of
services.

"If the trend had continued, the headlines for today's Budget would have been
'Interest on debt now R10 billion more than spending on education and rising'.
But we reversed that trend. Next year we will spend R10 billion more on
education than on debt and by 2003/04, R15 billion more. Interest on debt in
three years time will have retreated to 16,4 per cent of consolidated spending."

None of the revolutionary-sounding assertions in the SACP Discussion Document
prove that what Trevor Manuel said in his 2001 Budget Speech was untrue!

So, there was nothing wrong with the year 1996. There is everything wrong with
the assessment of this year by our 21st century "Marxists".

We must continue to pursue the goal of a 6% or higher growth rate, precisely "to
address the developmental challenges we all agree are critical, (racialised
inequality, unemployment, poverty, socio-economic duality, etc.)".

We must continue to attend to the challenge to maintain the correct macro-
economic balances. We must continue to mobilise both public and private capital
to achieve the strategic objective to improve the lives of our people and
transform our society.

It is perfectly obvious that we would have been extremely unwise if, in 1996, we
had allowed ourselves to be persuaded to follow the economic advice of our 21st
century "Marxists".

True to form, a decade later, our 21st century "Marxists" persist in putting
forward positions that are not only extremely unwise, but actually suicidal.
Evidently, they still know very little about what Karl Marx actually said!

MORE INFORMATION:

Bua Komanisi, Vol. 5, Issue No. 1, May 2006
http://www.sacp.org.za

ANC NWC response to Bua Komanisi, 19 June 2006
http://www.anc.org.za/ancdocs/misc/2006/anc_sacp.html

'God save us from the false prophets!', ANC Today Vol 6 No 24 
 http://www.anc.org.za/ancdocs/anctoday/2006/at24.htm#art1

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