Evidence of a real alternative

Posted on October 6, 2018


For all the unemployment, South Africa has remained a fairly labour intensive economy, especially in mining and agriculture. This because, traditionally, labour was cheap, not well organised, and automation had not, until very recent years, developed to the extent it has. It was also, initially, much more expensive than it has become.

Trade unions have succeeded in achieving something like a living wage for many workers, while automation also became cheaper, and the effects of this are being widely felt. As a result, there will definitely be more job losses, but not only in mining and agriculture or only in the manual and unskilled sectors. Automation is coming to jobs across the board and with it are coming cries for some alternative.

In July Daniel le Roux, head of an information research group at Stellenbosch University, estimated that automation could soon cost some 4.5 million more South Africans their jobs. He based this assessment on data provided by Stats SA and on a highly regarded automation index developed at Britain’s Oxford University.

“Soon” could mean 2020 or very shorty after. And the number of jobless could be very much higher if, as seems likely, the global economic crisis becomes more severe.

As matters stand, there are now slightly less than 14 million people in work in South Africa and those whose jobs are most immediately threatened include clerical staff, cashiers and bank tellers. At the professional level, economists head the list.

There are also more fuel price rises in the offing, so transport — a major cost to most working class families — is bound to rise. So too are other costs while worker incomes and spending power will diminish owing to greater joblessness.

This all comes at a time when the wage and welfare gap between working people and their bosses has grown into a chasm. In 1980, in the United States, for example, the average chief executive was paid 42 times the wage of the average worker. In the wake of the 2008 economic crisis, that soared to 361 times the average worker’s wage.

Given this background it is scarcely surprising that several unions have taken these figures to heart and are demanding that some clear policies be put in place to deal with what could be a catastrophe. Unfortunately, the populist cry of nationalisation seems to be coming to the fore as an alternative, not only in terms of land but also with regard to “banks and monopoly industry”.

Yet, as economists such as Richard Wolff point out, this is no alternative and no solution to a problem caused by a system based on competition and the pursuit of profit. Especially since it comes at the same time as the latest — again, well founded — estimates about the rising cost of living for working people, at even the most basic level.

Suggestions along the lines of nationalisation are presented by supporters as an alternative, generally referred to as socialism; by detractors as “communism”. It is neither. It is, in fact, merely exchanging one boss for another within the same system.

As Wolff has pointed out, socialism means “abolishing the distinction between bosses and employees”. In other words, a society of equals where democracy is maximised. This was clearly not the case in what the South African Communist Party referred to as “really existing socialism” in the former Soviet Union, a system Wolff and many others correctly label state capitalism.

It is one of the great — and enduring — myths about economic systems and the social consequences that flow from them that the former Soviet Union, Eastern Europe, China, North Korea and such countries practiced, and practice, an alternative system to capitalism. Cuba also fits this model along with more modern variants such as Venezuela. Even Sweden still occasionally gets mentioned as “socialist”.

This is because many people still equate state ownership with socialism. Social welfare programmes, such as public health care and pensions are also widely labelled in this way.

But the idea of providing a little bit of “socialism” — help to the exploited and poor — in a capitalist context, probably owes more to the decidedly capitalist Count Otto von Bismarck than to Karl Marx. More than a century ago, Bismarck encouraged the idea that such measures constituted a form of socialism when he introduced them as “state socialism”. This was something that was taken up 50 years later by the National Socialist (Nazi) Party of Germany under Adolph Hitler.

But there are examples of the democratic exercise of “socialism” in an industrial context. They exist in the “recovered factories movement” of Latin America and, in particular, in Argentina. There workers seized democratic control of workplaces, succeeded in managing them and, in the process, started democratising bureaucratic trade union structures.

So when alternatives are debated, this is perhaps where examples should be sought. And they may be bolstered by researching what happened in Paris in 1871 where the concept of a true “people’s democracy” briefly flowered.