By Richard Mellor in California
I read an article earlier this week about South Africa. It was in the Financial Times and it’s interesting to study it a little. Many financial journals carried the news including Bloomberg.
The article began with a mention of the celebrations across the country after the South African rugby team beat England and won the Rugby World Cup. It then went on to point out some other celebrations but this time in the financial markets. The investors, traders, moneylenders and other social parasites were happy because an institution based in the United States “elected not to downgrade the country’s debt to junk.” The institution was Moody’s, one of the big three credit rating organizations.
This decision by Moody’s has a huge impact on the lives of millions of people. By not downgrading the country’s sovereign debt and keeping it in what they call investment grade territory, institutional investors will be able to “buy” that debt. In plain language, South Africa will be able to borrow money in order to function as a country. Immediately, South Africa’s currency against the US dollar and the price of insuring the country’s debt against default got less expensive. Amazing.
Not so fast though. Moody’s also said it was cutting the outlook for the debt of Africa’s second largest economy form “stable” to “negative”. What this message conveys is that there is still a chance that the government of South Africa will, as the FT put it, “repair its finances”. It’s a small dose of economic terrorism. What “repair” means is that the global institutions of capitalism dominated by the US, will expect the South African government to impose the necessary austerity measures on the South African working class in order to maintain debt payments to international bankers, and to privatize public services and institutions.
Stay of Execution
The South African government has three months to get its act together. What is happening is that the South African government will be placed in a vice, between international capital, on the one hand, and the possibility of social upheaval on the other, as the working class pushes back. The institutions of global capitalism, dominated by US capitalism, will not only demand that any resistance from the South African working class, mostly black Africans as they historically did most of the work, be crushed, and that leaders of it and any other influential supporters be killed if need be. The institutions of international capital will, as we have just witnessed in Bolivia, install a government that will carry out these policies, if the existing one refuses to do so. It’s not unlike the heads of national unions that replace leaders of union locals who refuse to cooperate with the employers by forcing concessionary contracts on their members, with leaders that will.
This decision by a privately US-owned credit rating company prevents an “automatic expulsion” from the FTSE World Government Bond Index, which would mean that investors would sell their South African sovereign debt and once again, make it difficult or more expensive for the South African government to borrow money. Making borrowing more expensive would mean increased attacks on the workers of South Africa who are expected to hand over the pounds of flesh to the moneylenders. Naturally, they will resist. The FTSE is owned by the Financial Times and the London Stock exchange and is the UK’s equivalent of the Dow Jones. It’s almost impossible to name these owners although we can be sure they are basically a small group of global capitalists who are interlinked.
Teetering on the edge of chaos
Like home owners, farmers, students (or their parents) in the US, and in particular American workers and the middle class indebted due to health needs in a country with a barbaric health care system, South Africa like many nations, is teetering on the edge of chaos day-in and day-out. This is despite having some of the worlds most precious metals beneath its soil. The same is true of the Congo, Bolivia, Australia, Brazil and other countries with huge wealth in the form of natural resources. Next time someone tries to tell you that South Africa is in the crisis it is because blacks don’t know how to govern, consider some of this information here and do some checking of your own with regards to the Structural Adjustment Programs forced on countries by the IMF and the World Bank. What would be useful as well is to know how much wealth has been extracted from South Africa’s mines and where it went.
The same lies about black workers in South Africa, are spread about all workers. We’re lazy, living beyond our means, not willing to sacrifice and so on.
“The consequences of not acting now would be grave for South Africa. Over time, the country would likely face mounting debt service costs and higher interest rates and may enter a debt trap”, warns the former governor of the South African Central Bank.
The pressure is now on the SA government led by Cyril Ramaphosa, the former ‘socialist’ leader of the National Union of Mine Workers (NUM). Ramaphosa is worth close to $1 billion and also sits on the board of the British mining company, Lonmin, that, along with the ANC, and allegedly leaders of the NUM, massacred platinum miners in what is known as the Marikana Massacre, (See Miners Shot Down an excellent documentary about this tragedy).
Ramaphosa has been completely co-opted by international capital and we must recognize that despite his courage and dedication Nelson Mandela also helped set the stage for much of this by embracing neo-liberal policies and deals with South African capitalism. It is his political orientation, not a lack of personal courage that is at the root of this decision. There’s a decent article on this issue here and more here
Concessions forced on working class
The IMF, World Bank and those behind these global capitalist institutions are hoping the former socialist and union leader Ramaphosa can help force concessions on the South African working class and keep resistance to them down to a minimum. The pressure is on him to restructure debt and privatize public entities, particularly the country’s electric company Escom. We see this happening everywhere but it is pretty common in many former colonial countries that the only half decent form of employment is the state.
If the South African government or a utility like Escom can’t borrow, and it can’t keep up with debt payments at the present, the country won’t be able to “keep the lights on”. Financial experts are pushing Ramaphosa to do ‘his job’ which means finance capitalism’s bidding. Naturally, any resistance is being referred to as him being “held hostage” by the unions that have threatened direct action in the streets and workplaces if any attempt is made to privatize the electricity utility.
It is staggering when one thinks of it. People die of starvation, disease, lack of shelter, medical care, water the basic necessities of life, not because society is incapable of providing them or that the resources are not there, but because the owners of capital actually go on strike – a strike of capital – by refusing to allocate this crucial aspect of production unless they make profits and can accumulate vast wealth doing so. We must remind ourselves that capital is the product of collective labour power, yet is privately owned. We can never end poverty, hunger or environmental destruction without controlling the economy without taking capital and the global financial industry out of private hands.
Moving from social and political pressure to violence
When nurses, teachers, any workers, are forced to withhold their labour power because they cannot live a decent or secure existence with what they are presently paid for it; they are attacked as being obsessed with greed, selfish, anti-social. We can be labelled unpatriotic or even worse – communists. When we have to go further and take to the streets as we have in Lebanon, Chile, Ecuador, Iraq, because we can no longer live under regimes forced on us by the very same forces that are demanding further depravation in South Africa, then these forces move from political and social pressure to violence.
Here in the US, we are in the belly of the capitalist beast; we are under the watch of the guy with the big stick. We have never had a national party of the working class here in the USA. Workers in other advanced capitalist economies have had their own parties at one time or another, labour parties, social democratic parties, communist and socialists. In these countries there has been public dialogue about the nature of capitalism and of socialism as an alternative. This has given workers a clearer understanding of how the world works and the nature of class society.
In the last analysis, ideas or consciousness are rooted in material conditions, but the subject factor, trade union leaders political parties etc. have a huge influence. We have lacked this here in the US.
This will change as time moves on and is indeed changing, as we have seen with the growth and popularity of socialist ideas and even the using of the term. This is positive, regardless of how confusing and varied the people’s understanding of what the term actually means.
We must strive to be a class for ourselves
The forces that drove the workers at GM out on strike are the very same forces that are driving the protests in Lebanon, Iraq, Chile and that have driven Morales in Bolivia from office. Class-consciousness in the US is low and the trade union hierarchy is greatly responsible for this. But this will change. We must strive to see ourselves as a class and a class unto ourselves with our own interests and our own understanding of what we want to world to be and become.
Seeing ourselves more as a distinctly separate class with our own economic interests as opposed to the bosses and their political representatives will grow, as the assault on the US working class by US capitalism continues. But we have some work to do. We have to recognize that religious, racial, gender, colour differences between us are an obstacle and we must overcome them if we are to survive. Michelle Obama doesn’t call George W Bush her “friend” and “partner in crime” because she likes hanging out with him. They are class allies, they know how important class solidarity is and so should we.
We cannot provide a future for our grandchildren or avert environmental catastrophe that will end life as we know it on this planet without seeing national pride and nationalism for what it is, a trick and a con game. Our allies are the workers around the world that are fighting against the same capitalist forces that are destroying our security, our lands. Our enemies are our own capitalists who refer to themselves as “Americans” and imply we all have the same interests. Our allies are the immigrants, workers and the poor driven North in to Europe and North in to North America because of imperialist plunder by the advanced capitalist economies.
Internationalism is imperative
A tiny Island that contains the economic unit we call the United Kingdom got rich and acquired great global power through plunder and robbery, including in South Africa. It was economic, political and historical events that caused this nothing else.
Internationalism and international class solidarity are imperative for our future, not because it’s morally right, because it is the only way out of this madness. As James Connolly once stated, “Capitalism teaches the people the moral conceptions of cannibalism are the strong devouring the weak; its theory of the world of men and women is that of a glorified pig-trough where the biggest swine gets the most swill.”
Today in California another two youths died as a student shot up his school. The cause of this madness is not the prevalence of guns although any normal person realizes we need sensible laws around gun ownership. The problem is the system in which we live. Global capitalism is the problem. Global socialism and working class internationalism is the answer.
November 18, 2019
From the US socialist website, Facts for Working People. The original and other articles by Richard Mellor, follow this link.
