Nationalisation – medium sized bulls butt heads

Jeremy Cronin argues in the SACP’s Umsebenzi Online that Julius Malema’s “off-the-wall sound-bites” give the impression that he is making up policy about nationalising mines “on the hoof” and “individualistically”. Jeremy then goes on to examine – and ultimately dismiss – Malema’s call for nationalisation of the mines. I examine his reasons below … but first:

Malema shot back, repudiating Jeremy Cronin’s statement as “openly reactionary, clothed in quasi-Marxist rhetoric, with potential to make a sorry and sad reflection of the true character of the South African Communist Party’s ideological steadfastness”. Catch that here as I fear it might be in the process of being removed from Julius’ official  Blog.

First Jeremy Cronin. He argues in his famously calm and persuasive manner that nationalisation doesn’t necessarily mean NATIONALISATION. Yes the call is rooted in the relevant paragraph of the Freedom Charter:

The People Shall Share in the Country’s Wealth!

The national wealth of our country, the heritage of South Africans, shall be restored to the people;The mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole;

Putting aside (my personal) question marks about the authenticity of the authoritative or democratic status of the Freedom Charter –  Jeremy Cronin says it is important to understand that the above paragraph was written in nationalisation’s heyday, including when “the apartheid regime was consolidating an extensive state-owned sector.”

For Cronin the Freedom Charter is most important in its assertion that “the people”, not “the government” shall govern.

Thus Cronin supports the idea that “the people” get the full benefit of the economic resources (not that there be a

narrow bureaucratic take-over by the state apparatus and the ruling party’s “deployees”

His choice words here clearly hints (in my opinion) that he thinks this is the version of nationalisation that Julius Malema is working towards.

The state owning important aspects of the economy says nothing, for Cronin, about whose interests are being served:

Hitler’s Nazi Germany, Mussolini’s fascist Italy, and Verwoerd’s apartheid South Africa all had extensive state ownership of key sectors of the economy.

So for Cronin the 2002 Mineral and Petroleum Resources Development Act has already gone some way to fulfilling the Freedom Charter’s objectives by explicitly stating:

that “South Africa’s mineral and petroleum resources belong to the nation and that the State is the custodian thereof ….  In other words, it is the “nation” (with the state as custodian) and not the mining companies that have legal ownership of the mineral resources beneath our soil.

Cronin argues nationalising:

mining houses in the current global and national recession might have the unintended consequence of simply bailing out indebted private capital, especially BEE mining interests

And further that:

Many of our gold mines in particular are increasingly depleted and unviable. Some reach costly depths of four kilometres below the surface. Recently the global gold price has bounced back, but it is telling that, unlike in the past, our gold output actually dropped by some 9% in the same period. Our gold mines are simply no longer able to respond dynamically to gold price rises.

Cronin (while making it clear he thinks “the people owe the mining houses absolutely nothing”) argues that the Bill of Rights sanctions expropriation but requires compensation at a price agreed by both parties or determined by the courts.

The bottom-line for Cronin is that nationalisation would do nothing to further the “national democratic struggle”. Rather it

would land the state with the burden of managing down many mining sectors in decline … burden the state with the responsibility for dealing with the massive (and historically ignored) cost of “externalities” – the grievous destruction that a century of robber-baron mining has inflicted on our environment. In the current conjuncture, nationalising the mining sector at this point would also probably unintentionally bale-out private capital, in a sector that is facing many challenges of sustainability. The problems of liquidity and indebtedness for BEE mining share-holders are particularly acute.

Malema’s angry response

Charmingly, Malema ends off his response with the comment:

We also do not need the permission of white political messiahs to think.

And before that closing paragraph there are oceans of vacuous rhetoric and bombastic bullying  you have to fight your way through to find an argument with which to engage.

Cronin is, according to Malema: White, reactionary, “counter progress”, not reflecting the views of the SACP, misunderstanding the Freedom Charter, “very sad”, guilty of isolating Malema from “the organisation” and he “reaches reactionary conclusions”.

I have picked Malema’s statement apart with some care and there is absolutely no content (that answers Cronin) except for bullying and vague appeals to authoritative historical ANC figures. This quote is a good summary of everything Julius Malema had to say:

It is sad that previously, those who look like us were considered intellectually inferior by the white supremacists, and today Comrade Jeremy reflects the same sentiment, even before he interacts with the views of the ANC YL.

Right near the end of his rambling abuse, Malema says (as if he has imperfectly copied it from somewhere else):

Part of the models we are considering as an approach to Nationalisation of Mines is the Botswana model where De Beers is a 50% partnership with the Botswana government and still pays royalties and tax.

Well that doesn’t sound too stupid (if you ignore the grammar) , but we will have to wait and see.

Conclusion

The great nationalisation debate is alive and well. Unfortunately the exchange examined here is between our most sensible communist and the exasperatingly gung-ho ANC Youth League leader – these are hardly realistic poles in the debate.

We will continue to focus on nationalisation and the state of the debate in the Ruling Alliance. But meanwhile, what is interesting in the exchange between Cronin and Malema is that both made it abundantly clear, that while they are not happy with the constraints, there would be no circumstances in which either would propose a solution that lies outside of  The Constitution and The Bill of Rights. How adult is that?