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A New Deal for South Africa

The recent passing of Winnie Madikizela-Mandela, one of the anti-Apartheid’s most enduring figures, has served as a reminder of the struggles of South Africa’s past generation. We are also reminded of how her view on the transition differed from that of her ex-husband, Nelson Mandela. Oversimplifying, one emphasized racial reconciliation, while the other advocated for radical transformation.

Of course, both were fiery, passionate activists who gave their lives to the cause, and both shared the same ultimate goal of an egalitarian South Africa. But it must be acknowledged that both had large differences regarding the governance of post-Apartheid South Africa, to the extent that Winnie would ultimately accuse Nelson Mandela of having “betrayed” their cause.  

Of course, there was the very important difference that Nelson Mandela was elected president, while Winnie stayed mostly clear of electoral politics. In any critique of electoral leaders, we must always remember it is all too easy to criticize them from the armchair, especially one tasked with negotiating and executing the euthanasia of Apartheid.

Yet, on one count, Madikizela-Mandela has proven to be right: the economic ghosts of Apartheid were insufficiently banished. By not confronting white privilege head on, Nelson Mandela’s dream of racial reconciliation was always going to be tenuous, and dependent upon honorable, charismatic leaders such as himself and the Archbishop Desmond Tutu.

With this context in mind, one can easily understand the results of political scientist James Gibson’s survey, in which two-thirds of black South Africans agreed with the statement “Land must be returned to blacks in South Africa, no matter what the consequences are for the current owners and for political stability in the country.” As a stop-gap measure to fix some of this Apartheid-induced inequality, President Cyril Ramaphosa and the African National Congress (ANC) have proposed a change to the constitution, whereby land can be appropriated without compensation. While the white population only makes up for 8% of South Africa, it continues to own 67% of the nation’s land.

White privilege also stamps itself on the distribution on other assets. South Africa today is literally the most unequal country on the planet, with a consistent gini coefficient of about 0.67, an inequality that is very much demarcated on racial lines. The latest water crisis in Cape Town is yet another case study. The rich (read mostly white) residents of Cape Town can afford boreholes and wells, while the poor (read almost exclusively black) can barely find water.

Unemployment for blacks stands at a startling 31%, while for whites it is at a respectable 6%. This figure does not even count those who are discouraged from seeking work, further underestimating the racial divide. Even restricting our sample to those who did manage to find work, the salaries of whites is four times as much as blacks, and revenue from unearned income (such as capital gains and rent) is six times higher for whites than blacks, according to Stats SA statistics.

While talks of a “white genocide” are fabrications of alt-righters, it is not hard to see racial tensions brewing up. Mark Blyth, one of the few intellectuals who predicted Brexit and Trump’s electoral victory, knows all too well the economic roots of such anger and frustration. If such reactions can be elicited from Global North countries, then can we be surprised that black South Africans, who are suffering objectively far worse poverty, will one day lash out?

The prior attacks on migrants should therefore have served as a warning that such tendencies were already brewing. Under such circumstances, we can therefore understand the economic populist Julius Malema’s comments when he attacked his political opponents for being migrants from Mozambique and Zimbabwe (countries that, it should be said, sheltered many anti-Apartheid activists).

Blyth’s analysis follows from Karl Polanyi’s, who wrote in The Great Transformation that “laissez-faire” markets eventually lead to social disarray and discord, as 19th and 20th century European history shows. Indeed, sagacious conservatives, rather than liberal reformers, often supported pro-poor policies because they knew it was the safest means of protecting the market system (German statesman Otto von Bismarck is one example of a pro-welfare conservative). Perhaps this is a lesson to both white old money and the black nouveau riche that it is in their best interest to ensure the grinding poverty is reduced.

All this inequality in South Africa was not by accident or engendered by the invisible hand of the free market. It was a calculated, deliberate attempt to subjugate the black population. But how has such a situation persisted in post-Apartheid South Africa, especially given the ANC and Mandela’s radical pan-African socialist roots?

Anti-Apartheid ANC activist Ronnie Kasrils goes into detail in an exceedingly candid column: The fall of the Soviet Union, which deprived SA from aid, and the rise of the Washington Consensus, which was highly skeptical of heavy handed government interventions, was one reason. A system dependent on corporations, as noted by professor Sampie Terrenblache, was another. Compromise in the de Klerk-Mandela negotiations was a third. Capture of income and acquiescence by ambitious black elites was yet a fourth.

Only 10% of the ANC’s land has been redistributed from whites to blacks, when there was a target of redistributing 30% of South Africa’s land by 2000. Where the land was redistributed, it seemed to have been captured by black elites.

On the last point, 70’s anti-Apartheid leader Steve Biko was rather prophetic, arguing, “‘There is no running away from the fact that now in South Africa there is such an ill distribution of wealth that any form of political freedom which does not touch on the proper distribution of wealth will be meaningless[…] If we have a mere change of face of those in governing positions what is likely to happen is that black people will continue to be poor, and you will see a few blacks filtering through into the so-called bourgeoisie. Our society will be run almost as of yesterday.”

How far can Ramaphosa’s proposed land reform go in fixing this? In one sense, it won’t do much, as according to experts and the Parliament’s own report, non-compensation wasn’t really the main bottleneck to the land reform. On the other, it can have an important effect, by bringing land reform back to the policy agenda.

In debates about South African land reform, foreign and some domestic media uncritically demonize Zimbabwe’s chaotic land reform in the 2000s. Now, I am absolutely not going to be an apologist for the violence and hectoring that occurred in this period, as documented by Charles Laurie. However, the economic effects of Zimbabwe’s reform are much subtler. First, because data is poor. Second, because it is unclear how to disentangle cause and effect, as the Zimbabwean economy also faced ridiculous levels of hyperinflation, AIDS, droughts, weak global demand in 2007-2008, as well as a corrupt and ineffective state under Mugabe.

With that in mind, there are a few tentative observations to make (I go more into depth on Zimbabwe’s land reform in another article). On the one hand, large-scale export farming has undeniably decreased. The Research and Advocacy Unit in Zimbabwe released a comprehensive paper, arguing that the land reform was an utter failure, pointing to the massive decrease in agricultural output succeeding the appropriation years, especially in export-oriented crops. And, of course, nepotism corrupted the whole process, as civil servants and government officials got a disproportionate amount of land, some of whom are now indistinguishable from colonial-era white farmers (the Mugabes themselves were reputed to have owned 20 farms!).

On the other hand, while the production of export-oriented crops has fallen, certain staple crops, like maize, have rebounded. It seems as if rural towns have been revitalized, as smaller farms are far more likely to purchase goods from the local economy. Furthermore, researchers Hanlon, Manjegwa and Smart estimate about 550,000 jobs were created as a result of the land reforms, because smaller farms are overwhelmingly labor-intensive. In South Africa, with extreme levels of unemployment, this by itself is a dealbreaker.

With that said, it appears that land reform is inevitable, as such unequal distribution of land is not politically sustainable, regardless of its economic effects. A framing of the debate only in terms of economic efficiency, productivity, and commercial viability will be counterproductive, and alternative framings must be considered, such as radical agrarian transformation, black empowerment and economic autonomy. This is not to say that land reform will be worth it, even if the country goes into a food crisis. But political realities may necessitate that a reasonable loss in efficiency or productivity may have to take the back seat for other goals.

Therefore, what the energies of moderate groups should be devoted to is to ensure the reform in the least painful way possible for all sides, and in an economically efficient manner. For example, the top 20%-30% of white farms in South Africa are highly efficient, and it is probably best to target other farms for redistribution. Furthermore, instead of full-eviction, a reasonable portion of their land should be retained by white farmers.

The large-scale wave of land appropriations in Zimbabwe was triggered by veterans’ and other groups frustration with the slow speed of reform. This should be a massive warning, and proactively preventing such a situation is far preferable to the alternative.

But there is a case to be made for land reform on even “rational” economic grounds. As previously said, land reform is a potent means of killing unemployment. It also provides a means for the poor to accumulate resources. And there seems to be the existence of an “inverse relationship” between farm size and output-per-acre in the developing world, which means smaller farms are more productive. Indeed, as Michael Lipton argues in his book Land Reform in Developing Countries: Property Rights and Property Wrongs, smaller farms have lower costs for screening labor, as they can rely on communal and familial bonds, and because in developing countries labor is cheaper than capital.

This does not mean the ANC should only commence land reform, and then run. The implementation of the land reform must be supplemented by provision of labor-intensive technologies (e.g. ploughs), prevention of corruption or capture by black elites, and an open-mind to potential policy options (such as tenancy reform, respecting communal land rights, a land tax or 50/50 ownership schemes). None of these were carried out by Mugabe’s government in Zimbabwe, which surely reduced the effectiveness of the land reform (perhaps with the exception of the semi-successful Command Agriculture program championed by then vice-president Emmerson Mnangagwa).

However, even with this portfolio of policies, we must remember that land reform is only merely a part of the wider picture. Large parts of South Africa’s land are in arid areas, which makes it difficult for farming. Hence, while land reform can certainly play an important role, if unaccompanied by other policies, it is unlikely to lead to the liberation of the masses.

I am not arguing that Mandela and the ANC should have uncritically taken the economic lead of their intellectual forebears, the pan-African socialists such as Julius Nyerere and Kwame Nkrumah. Surely some of their policies were outdated in a post-Soviet world. However, there must have been a middle-ground between Soviet-style socialism and white settler capitalism. There could have been substantial redistribution within the market system, and without surrendering the means of production to a centralized government.

Steve Biko himself was neither explicitly capitalist nor communist, and rather advocated for a system that was a combination of the two (i.e. social democracy). Perhaps only under such a system can the ugly ghosts of racial tension be forever banished.

Photo: “Frederik de Klerk with Nelson Mandela – World Economic Forum Annual Meeting Davos 1992”

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