It was not solely disrespect for South Africa’s Reserve Bank governor Gill Marcus that saw many delegates to the National Union of Metalworkers (Numsa) congress largely ignore her speech last week. Nor was it, as general secretary, Irvin Jim, maintained, because the chattering delegates could not hear Marcus, although her reading a speech in a cavernous venue in Durban did not help.
The simple truth may be that they did not care to hear what Marcus had to say. Which is, of course, disrespectful to any invited speaker. But the fact that deaf ears were turned to an analysis of the local and global economy is the most worrying factor.
When the governor of any central bank starts a speech by acknowledging that the global economic crisis is not only continuing, but is getting worse, every trade unionist should sit up and take notice. After all, such predictions, if accurate, usually mean fewer jobs, even greater downward pressure on wages and more social dislocation.
Even although Marcus was mildly optimistic about the prospects for South Africa in the face of these destructive global developments, all she really indicated was that South Africa would probably be among the walking wounded on the economic battlefield. What this means, on an individual level, is that the majority of the wounded and the most severely damaged will be workers, the constituency of the labour movement.
However, by concluding that the global situation was dire and getting worse, Marcus was wholly in agreement with the analysis, not only of Numsa and Cosatu, but of the labour movement generally. For the most part, that is where agreement ends.
It also seems that this was where the listening at the Numsa congress ended. Yet this was among delegates who had, over the past week, discussed the economic situation, come to various conclusions and developed policy proposals.
Perhaps they were satisfied that there was nothing more to say. If so, this indicates both arrogance and complacency, something that might be termed the Nero syndrome, after the Roman emperor who supposedly fiddled while his city burned about him.
The presence of Marcus was an opportunity not only to listen, but perhaps to challenge the governor. Because she argued against the general trade union call to drop inflation targeting and opened up the nationalisation question when she pointed out that the Reserve Bank was already effectively under government control.
Perhaps much more importantly, she promoted the standard “grow the economy and jobs will follow” remedy advocated by a majority of mainstream economists. This is an argument that few of the unions, and their federations, nationally and internationally, have seriously challenged.
But a few trade unionists, going back a decade and more, have pointed out that because of technological advances, the world is now in a position to produce more and more with less and less labour; that this simply means that there will be fewer and fewer income earners to buy the products produced. In more recent times, it has also been pointed out that the present global crisis was merely delayed by the massive extension of credit, both at a personal and governmental level.
Debt defaults — in other words, the result of over spending — were the trigger for the present crisis. This resulted in two main responses: austerity to cut back demand, reduce production and eventually soak up the surpluses — or greater spending, especially on state-financed infrastructure projects, usually financed by borrowing, to put more money in workers’ pockets and so increase demand.
The labour movement rejects the austerity model and largely accepts the latter “spend your way out of recession” argument, coupled with lower interest rates and monetary policy targeted on job creation. But it was borrowing and spending that caused the crisis in the first place, a contradiction the unions, along with most commentators, have generally failed to confront.
Instead, many trade unionists advocate wholesale nationalisation as a remedy or, in the case of the SA Communist Party, “socialisation”. This latter term seems to mean nationalisation in a state controlled by “the workers’ party”, a description the SACP gives itself.
Numsa has also sourced its call for nationalisation to “Marxism” and this has been described as a move to socialism in a “workers’ state”. However, as this column has pointed out before, neither Karl Marx nor his collaborator Frederick Engels associated nationalisation — a change of ownership from one form to another — with socialism.
In fact, they opposed giving more power to the state, with Marx commenting in 1844 that that the most useful thing the state could do for society was to commit suicide. He advocated an extension of democratic control, economically and politically, to the factory floor and to communities.
So far, however, the debate has tended to focus on economic policy and not on the political management structure that is an outgrowth of this. This includes quoting out of context comments by international institutions.
Marcus was given solid ammunition in this regard by Numa’s bald assertion in November last year that the UN Conference on Trade and Development (UNCTAD) was in favour of employment targeting in monetary policy. The governor pointed out that UNCTAD had also said was that an incomes policy was needed; that the cost of labour had to be controlled in order to stabilise inflation.
Although Marcus did not propose an incomes policy, she did call for an effective compact involving “business, trade unions and society”. Since most trade unions — and Numsa is certainly no exception — maintain that the fundamental interests of labour and business are diametrically opposed, here again was fuel for honest debate: listening, learning and arguing on the basis of all known facts.
So far, the three economic policy reactions — austerity, state-promoted spending and nationalisation — seem unacceptable and unworkable.
Perhaps it is time that the labour movement at least, started to dig itself out of its entrenched positions to try to develop a combined political and economic programme to show the way forward.
Because our Rome is certainly starting to burn.