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Nationalisation, privatisation, land: What Mandela told business in 1990 still resonates today

Jul 18 2019 13:16
Fin24

Just under three decades ago, Nelson Mandela addressed 300 business executives at a conference convened by the Consultative Business Forum in Johannesburg on the theme: 'Options for Building an Economic Future'. He touched on issues that South Africa still grapples with, including nationalisation, privitisation, land reform, inequality, public finances, unions and capital flight.

A transcript of the address, still timely and relevant, is published on SA History Online. In honour of 10 years of Mandela Day, an edited version is reproduced here. Mandela delivered it on May 23, 1990, just months after being released form Victor Verster Prison. 


We would like to thank the Consultative Business Movement most sincerely for taking the initiative to convene what is for us a truly historic conference. The mere fact that it is taking place sends an important signal about the need for all South Africans to get together to determine the destiny of our common fatherland.

Recently, I had occasion to read an advertisement inserted in the British press by the Anglo American Corporation. It begins by quoting various clauses of the Freedom Charter, which have to do with job creation and the provision of food, housing and education. It then poses the very important and correct question - "If the South African economy doesn't deliver, how can any politician hope to?"

That, in a sense, encapsulates the significance of this conference. Both of us, you representing the business world and we a political movement, must deliver. The critical questions are whether we can in fact act together and whether it is possible for either one of us to deliver, if we cannot and will not cooperate.

We hope that the fact that we are meeting here signifies that there is a common acceptance among us that we necessarily must cooperate to ensure that the people do indeed enjoy a decent standard of living, in conditions of freedom.

To establish a system of cooperation requires that we should at least share some common objectives. But it also means that we have to overcome the mutual mistrust that, to some degree, undoubtedly exists between us. We do not have to elaborate the reasons for that mistrust. As South Africans, we all know that they emanate from the fact that on one side of the street are the haves, and on the other, the have-nots;on one side, the whites, and on the other, the blacks.

The interaction that is taking place among us today - and hopefully, in other encounters in future - should help in the process of identifying the common objectives which should become part of a national consensus that will help to bridge the enormous gulfs that separate the different communities in this country. As we discuss, we hope that some of the mistrust will fall away. But, of course, it will be in the process of the honest implementation of what would have been agreed, that this mistrust would finally disappear.

Roots of bitterness

You will, I am certain, remember the nursery rhyme:

Baa! Baa! black sheep, Have you any wool? Yes sir, yes sir, Three bags full. One for the master, One for the dame, One for the little boy Who lives down the lane.

Could it be that when the children composed this simple verse, they understood that it was only the figurative black sheep that would, because it was itself excluded, have sufficient sense of justice and compassion to remember the little boy down the lane? Was it because they had seen in practice that the white sheep apportioned only a tenth of its wool, or none at all, to the little boy down the lane?

Many a time the martingales and deprived people whom we represent have posed the same bitter questions that Shylock posed in Shakespeare's Merchant of Venice:

"Hath not a Jew eyes? Hath not a Jew hands, organs, dimensions, senses, affections, passions? Fed with the same food, hurt with the same weapons, subject to the same diseases, healed by the same means, warmed and cooled by the same winter and summer, as a Christian is? If you prick us, do we not bleed? If you tickle us, do we not laugh? If you poison us, do we not die? And if you wrong us, shall we not revenge? If we are like you in the rest, we will resemble you in that... the villainy you teach me, I will execute;and it shall be so hard, but I will better the instruction."

Questions such as these, whether about black sheep or the universal nature of human pain and suffering, can only be posed by people who are discriminated against, in a society that condemns them to persistent deprivation of the material artefacts and the dignity that are due to them as human beings. We pose them for the same reasons.

The bitterness of a Shylock, who threatens to execute and even better the villainy which his persecutors have taught him by their example, is a feeling that comes naturally to those who are hurt by systematic and systemic abuse. It should come as no surprise that it lurks in the breasts of many whom this society has considered and treated as disposable cyphers.

The issue we are addressing is the one of power and the uses and abuses of power. Those among us who are white come from that section of our population that has power, and, in a sense, total power, over the lives of the black people. Nothing within the sphere of human endeavour is excepted - be it political, economic, military, educational or any other. Indeed, this even extends to the right to decide who shall live and who shall die.

These may sound like harsh words, but the reality that is unseen inside the boardrooms, by those who exercise power, across the length and breadth of this country, is harsher still. The anger in the heart of Shylock is abroad in our society. This is a fact to which we should be very sensitive, without any attempt at self-deception...

Deracialisation of economic power

But then, what about economic power? This, obviously, is one of the thorniest issues that must be addressed. It is said that less than ten corporate conglomerates control almost 90% of the shares listed on the Johannesburg Stock Exchange. If somebody did any arithmetical calculation, he or she would probably find that the total number of people who sit on the boards of these companies as directors is far less than one thousand. These will almost exclusively be white males. If you add to this the fact that 87% of the land is, by law, white-owned and is in fact occupied by a minority even among the whites, then the iniquity of the system we have all inherited becomes even more plain.

If we are genuinely interested in ending the old social order and bringing in a new one, characterised by the notions of justice and equity, it is quite obvious that the economic power relations represented by the reality of the excessive concentration of power in a few white hands have to change. We make this demand not as a result of any imperative that might be said to derive from ideological convictions. We make it because we cannot see how it would be possible to pull our country out of the economic crisis, in part caused and exemplified by white control of economic power while, at the same time, we perpetuate this power structure.

It might be said that international experience shows it is wisest not to tamper with this power structure. The argument is made that the sanctity of private property, and the incentive and dynamism that derive from private ownership, should convince all of us to accept, if not welcome, this economic power structure as a fact of life. What we would like to say is that, while we look at economic models and study the experiences of other countries, we should not forget that we are dealing with South Africa, with its own history, its own reality and its own imperatives. One of these imperatives is to end white domination in all its forms, to deracialise the exercise of economic power.

If we are agreed about this objective, as it affects the economy, then, I trust, we can begin a serious discussion about how it should be achieved. It would seem to me necessary that this discussion, vigorous though it has to be, should not be conducted in a manner which makes healthy debate impossible. We would therefore have to avoid throwing epithets at one another, questioning one another's capacity to think, or challenging one another's good faith.

Issues to be addressed

I am not going to present any argument about nationalisation. I would however like to share a secret with you. The view that the only words in the economic vocabulary that the ANC knows are nationalisation and redistribution is mistaken. There are many issues we shall have to consider as we discuss the question of democratisation and deracialisation of economic power.

One of these is whether we should not draw on such lessons as we might learn from the anti-trust laws of the United States or the work of the Monopolies Commission in Great Britain to address the issue of how to ensure that there is no unhealthy over-concentration of economic power. The application of those lessons would of course have to take into account the economic realities of our own country which might dictate various optimal sizes for different firms.

The factors that would have to be considered would include the necessity to achieve economies of scale, the capacity to generate the necessary critical mass of investible funds, the strength to compete successfully on the international markets, the ability to participate in serious research and development, and so on.

Another issue we might have to consider is the advisability or otherwise of the placement on the boards of privately owned companies of directors appointed by the government, to see whether it is possible to balance the pursuit of private gain with the need to promote the common good.

I would also like to stress that we do not want to have everything done by the new government. A healthy relationship between employers and trade unions is crucial to the country's future. We agree with the view that progressive labour legislation, allowing strong unions to carry out centralised bargaining, will help to solve many important issues. The question of a living wage, job security and industrial restructuring must be dealt with in the bargaining process.

Yet another question we might consider is whether there are no areas in which it would benefit society at large if the state established public corporations or strengthened existing ones. One of these areas might be housing, where it seems clear that there is an urgent need for vigorous state intervention rapidly to expand the country`s stock of habitable accommodation. Another area is suggested by the need for state encouragement of small and medium business as well as the cooperative sector, especially as there is a crying need for the multiplication of economic activities that will lead to the creation of new jobs.

We might mention at this point that we are firmly opposed to the process of privatisation on which the government has embarked. It seems to us eminently wrong for the government to engage in this important restructuring exercise precisely at the moment when the whole country and the world expect that fundamental political change is in the offing. It would seem only reasonable that so important a question as the disposal of public property should be held over until a truly representative government is in place. Additionally and inevitably, the process of privatisation cannot but reinforce the economic power relations which we assert have to be changed.

Mandela candidate poster
Source: Unisa

As we have said, the land question must also be addressed within the context of the restructuring of the old economic power relations. Recent state actions to sell state land and to evict people from white farms are entirely unhelpful to these purposes. Before anything else is done, the racist and discriminatory land acts have to be repealed. Furthermore, serious discussions and planning must take place involving the rural people and their representatives, the democratic government, those who own land, and the country as a whole, so that we can all address the related issues of making land available to the land-hungry masses, while ensuring the necessary increases in the production of food and agricultural raw materials.

We still believe that there must be further discussion of the issue of nationalisation of assets that might at the moment be privately owned. The ANC has no blueprint that decrees that these or other assets will be nationalised, or that such nationalisation would take this or the other form. But we do say that this option should also be part of the ongoing debate, subject to critical analysis as any other and viewed in the context of the realities of South African society. It should not be ruled out of the court of discussion simply because of previous bad experience or because of a theological commitment to the principle of private property.

We are very conscious of the critical importance of such matters as the confidence in the future of both the national and the international business communities and investors. We accept that both these sectors are very important to the process of the further development of our economy. We can therefore have no desire to go out of our way to bash them and to undermine or weaken their confidence in the safety of their property and the assurance of a fair return on their investment. But we believe that they too must be sensitive to the fact that any democratic government will have to respond to the justified popular concern about the grossly unequal distribution of economic power.

There should be no debate among us about the centrality of the issue of ensuring a rapidly growing economy. To ensure a rising standard of living the gross domestic product must grow at rates that are higher than the rate of growth of the population. Various figures have been thrown around about the possible and desirable rates of growth. This conference will obviously not have the possibility to look at these figures and to study their macro-economic implications.

Economic growth and equity

But, of course, the issues, about which I am sure we are agreed, of the need to generate significant domestic savings, to attract substantial foreign investment and to keep the rate of inflation reasonably low, are central to the discussion of the question of economic growth. Perhaps there are only three or four points we should raise at this stage.

One of these is that we are concerned at persistent reports that some of our own domestic companies have been and are involved in a process of exporting capital from this country. We cannot sit here, verbally welcome the prospect of democratic transformation, talk of the need rapidly to develop the economy, and at the same time reduce the means that would make such development actually possible.

The second point is that it is important that we should stop propagating the gloomy picture of a South Africa that, as it is said, will inevitably sink into the economic crisis that afflicts many African countries.

The third is that it seems obvious that the democratic parliament, together with the public at large, should elaborate a macro-economic indicative national plan to provide a framework within which to determine the directions of growth policy. We are saying, in other words, that the process of growth cannot be left to develop spontaneously because it would ineluctably result in the structural distortions and imbalances which have to be corrected.

In this connection, we should all accept the reality that growth by itself will not ensure equity. A situation could develop in which, in terms of levels of income, we continue to have a persistent gap between the haves and have-nots, despite any increase that may take place in the standard of living of the other. I am therefore raising the question that the matter of the redistribution of wealth in conditions of a genuine economy, is one that must be faced squarely and addressed firmly. I am sure it is common cause among us that the very fact of an expanding market, resulting from the process of wealth reaching those who were formerly deprived, is itself a condition for and an engine of economic growth.

Nelson Mandela (AFP)

We are of course all concerned about the need generally to raise the level of education of all our people and in particular rapidly to increase the numbers of black engineers, technicians, artisans and other skilled persons. This would of course make a decisive contribution to the critical issue of the level of productivity in the economy as a whole. It would also place the issue of the relative and absolute increase of income accruing to the black section of our population within the context of expanding national wealth, in whose expansion they would have played an important part.

The penultimate issue we wish to raise is the matter of public spending. There can be no doubt that the public finances will come under enormous pressure for increased spending on education, housing, health, unemployment benefits, pensions and so on. It should be commonly agreed among us that the democratic state must indeed have a responsibility to provide this material cushion, at least to protect the most disadvantaged.

Certainly, the present-day apartheid absurdity must be addressed whereby public per capita social spending on the whites is at least six times higher than on Africans. However complicated the economics of bridging this gap and instituting a rational system of social welfare which actually increases social welfare, something will have to be done in this area as a matter of urgency. Indeed, we could say that even now, as we enter a period of transition, it might be necessary to establish mechanisms by which those who have been excluded from power play a role in determining the disbursement of public funds.

The concerns that have been raised with regard to the capacity of the tax base to carry a vastly increased state budget are of course important and legitimate. But in a situation of rapid economic growth such as we have spoken of, it would be necessary to review the system of taxation. The aim would be to reduce the burden of direct and indirect taxation on sections of the community least capable of looking after themselves and to shift more of the load on to the corporate sector without, of course, producing a situation of diminishing returns.

But obviously enormous savings will be made as a result of the abolition of the multi-headed hydra represented by the various apartheid administrative structures. Defence spending will also have to be reduced radically as a result of the thinning down of the defence establishment, a process which must also lead to the conversion of military production facilities to civilian needs.

We would also be of the view that we should build a state system which does not seek to administer the lives of people as though they were wards of the state. The situation should therefore be fought against in which there would be a bloated and unproductive civil service...

Think about future in new terms

We need the same transformation in the economic sphere. You, as businessmen and women, have the obligation to engage in this process. I hope that you are able to abandon old ideas and think about the future in new terms. Once such ideas are born, we know that you will have the courage to act on them.

In this manner, we could begin to shape our economic and political destiny in the interest of justice, peace and progress. We trust that you will consider this carefully and reflect on the question - what are you prepared to do for your country, rather than what your country can do for you.

We hope that what we have said might assist in the process of building a national consensus on the direction we have to choose in order to end the agony of apartheid and racism, of poverty and deprivation, of internal conflict and international isolation...

 All of us present here have an obligation to use the levers of power and influence we hold in our hands to ensure that the new day dawns now.

nelson mandela
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