Special Hearings — Business Hearings — 1997-11-11

DR BORAINE: Professor Terblanche, you may begin.
 Thank you Dr Boraine, in the time at my disposal I will try to give a description of the economic, political and ideological framework in which the South African business sector has conducted it's business for the greater part of the 20th Century.  I hope the Commission will allow me to give a short historic overview of how the systemic framework was institutionalised and maintained.
 On the day that President Nelson Mandela was released from custody in February 1990, he said:
"The white monopoly of political power must be ended and we a need a fundamental restructuring of our political and economic systems to address the inequalities of apartheid and create a genuine democratic South Africa".
In a systemic analysis of South Africa's recent history, it is appropriate to ask when and under which circumstances the political and economic systems to which Dr Mandela referred was created, systems whose mental restructuring was, according to him, already long overdue in 1990.  I want to put forward the argument that both the system of white political dominance and the economic system of racial capitalism and the legal structure and ideological justification in which they were embedded, were constructed and institutionalised during the last decade of the 19th Century and during the first quarter of the 20th Century.  From 1924 until 1974 the systems of white supremacy and racial capitalism were maintained intact and if anything, strengthened.  They became even more exploitative, discriminating and unjust.  In the 20 years from 1974 to 1994, South Africa's racist political and economic systems experienced a serious survival and legitmation crises to which I will come.  
 From say 1890 to 1924, three important things happened in South Africa.  Firstly the political system of white political dominance was institutionalised mainly by the act of Westminister of 1909.  Secondly a series of legislation was enacted by the Cape and Union parliaments to create and exploitate the African Labour repressive as the legal foundation of the system of racial capitalism.  Thirdly close symbiosis or partnership has been forged between the white politicians operating in the political system of white supremacy and the white business people operating the economic system of racial capitalism.  Without this symbiotic relationship both systems could not have lasted for more than a century.  White politicians and business people were most of the time, from say 1910 to 1994 hand in glove with each other to protect their mutual interests in the maintenance of the structures of white power, privilege and wealth on the one hand and the structures of black and mainly African deprivation, discrimination, exploitation and poverty on the other hand.
 If you would ask me whether the multitude of discriminative and derivative legislation which was enacted to create and maintain the oppressive racist system was motivated by political or economic considerations, it would be difficult to answer.  The political economic social and ideological considerations behind these legislation were closely intertwined but I would have to make a choice I would say that most of the racist legislation was enacted and maintained mainly on behalf of white economic considerations. White farmers, white business people, white employees, all of them were instrumental in the creating the racist system.  
 At the end of the 19th Century the goldmining industry was confronted by an African Peasant Society which was reluctant to deliver the required number of workers to wage labour.  The Africans were satisfied to meet their economic needs by traditional farming and by rather profitive small-scale maize farmers.  It is estimated that the small African maize farmers produced more maize in the decades before the Anglo Boer War than white maize farmers.  To solve the labour problems of the mines a tendency developed from the 1890's onwards to deliberately create a labour repressive system or more correctly to extend the labour repressive system from agriculture to mining.  The repressive labour systems a passive role in the early phases of industrial legislation in several countries.  In the case of Britain, the enclosure movement destroyed the whole structure of peasant society and created a wandering poor as a reservoir of cheap labour.  This reservoir of unskilled labour played a decisive role in the launching of the Industrial Revolution at a relatively early date in Britain.  
 Important differences exist however between the labour repressive system that was introduced in South Africa from 1840 onwards and the systems of other countries. In the case of other capitalistic countries the social dislocation and proletarisation caused by labour repressive systems lasted only 30 or 40 years before a section of the working population was able to command higher wages and was shortly incorporated into the social and political institutions.  
 The labour repressive system in South Africa had several unique characteristics.  Apart from it's conspicuous racial character, the repressive measures were very hard and were applied relentlessly. These characteristics as well as the longevity of labour repression in South Africa can only be explained within the context of the political and economic power structures that were in place when the successive mining, agricultural and industrial revolutions take place in  South Africa.
 After the Anglo Boer War, Milner appointed on behalf of the gold mining industry the South African Native Affairs Commission Sanac to seek solutions for the severe shortage of African Mine workers. Sanac recommended that Africans access to land and farming should be curtailed drastically to deliberately proletarise Africans to induce adequate numbers to enter into wage labour at very low wages.  The philosophy of Sanac was accepted when the Land Act was promulgated in 1913.  The Land Act was more successful than any other measure in prolateriatanising  a very large percentage of the African population and in creating a very exploitative and unjust system of labour repression.  The relation of structural dominance of whites over blacks was created by the Land Act and the racist legislation from 1910 onwards comes apparent when we note that the real African workers in two major sectors, mining and agriculture did not increase between 1910 and 1970.  The real wages of migrant labourers in mining were in 1972 lower than the level of 1911.  
 During the same period the real wages of white miners approximately doubled.  The Land Act was truly the rock on which the whole system of racial capitalism was built and maintained for six decades.  The colour bar of 1980 only to mention a few, the Industrial Reconciliation Act enacted by Smuts in 1924 and the discriminatory legislation of the packed government degraded African workers to a position of economic powerlessness.  They became ultra-exploitable. 
 Although the application of racial legislation was relaxed by Smuts during the war years in the 1940's, none of the discriminatory measures were removed from the law books by the Smuts government.  When the political power shifted from the English orientated United Party to the Afrikaner - Orientated National Party 1948, systems of White supremacy and racial capitalism were still very thoroughly entrenched in the legal and constitutional structures of South Africa.  Perhaps we should grant the argument that a form, not necessarily a racist form of labour repression was unavoidable precondition during the take-off phase of the mining and agricultural revolutions until say 1932 when the price of gold increased by 45%.  The increase in the price of gold laid from 1934 the basis for an unprecedented growth period. From 1934 till 1973 the annual growth rate of the economy was 4,5% but if we take the political, economic and ideological power struggles into account, these forty years was par excellence a period in which whites were undeservedly enriched while blacks and especially Africans were undeservedly impoverished.  The exploitation that took place during these four decades was so cruel that even the staunchest propagandist of liberal capitalism should not try to justify the deprivation, discrimination and exploitation.  
 The power relations within the structure within the structure of white supremacy and racial capitalism changed drastically to the detriment of all groups other than white when the National Party became the government in 1948.  By implementing its so-called apartheid policy to solve the native problem and to allay the fears of the Africans for the Black Peril, the National Party built a mammoth organisational structure in order to control not only the movement of Africans but also their living and working pattern in a very strict manner. 
 A plethora of additional segregational legislation was put on the law book, the existing arsenal of discriminatory measures was extended quite considerably and made stricter and also made applicable to the coloureds and Indians. A very high rate of economic growth was maintained in the 1950's and 60's, whilst the per capita income of whites was 10, 6 times higher than African per capita income in 1946, white income was 15 times higher in 1975.  If ever there was a period of upward redistribution of income, mainly from Africans to Afrikaners then it was the period of high growth in the 1950's and '60's.  Given the power structures of white supremacy and racial capitalism it was a period of high growth with a trickle up effect. 
 An important and always recognised part of National Party policy in mainly the third quarter of the century was Afrikaner favouritism.  The National Pary used it's fiscal powers to tax the welfare English speakers and to increase social spending on the alleged poor-white Afrikaners quite considerably.   The National Party policy of Afrikaner favouritism was however even more advantageous for the upper section of the Afrikaners.  It enriched the richer Afrikaner in a spectacular manner.  
 In an acquired twist of destiny, the emphasis of the National Party shifted from the ideological aim of uplifting the poorest Afrikaners towards assisting richer farmers and the emerging Afrikaner entrepreneurs.  By extraordinary generous types of favouritism and Afrikaner haute bourgeois was created.  They quickly became the champions of a system of unbridled Afrikaner capitalism. Examples of Afrikaner favouritism were the allocation of fishing quotas, mining and liquor concessions, government contracts and all kinds of inside information, several Afrikaner corporations like Rembrands, SANLAM, Volkskas Bank etc, grew spectacularly due to lucrative favours and inside information received from the NP government.  
 If I were to identify and Afrikaner corporation that has benefited the most from NP favouritism then it would be Naspers from 1948 onwards a very close political, ideological and personal symbiosis between Naspers and the NP government.  
 The Afrikaner Broederbond played a key roll in operating and propagating a philosophy that loyal Afrikaners should only support Afrikaner business and Afrikaner institutions.  It was however not fully Afrikaner business that profited in the 19750's and '60's.  Apartheid proved to be good for every white business, also the English speakers, Dan Omeira a well known author made in his 1996 book the important point that although English speakers have had moral and theoretical qualms with the NP's racial policy, he knows of no Anglophone liberal businessman who declined to profit from National Party interference in the free market and raise their workers wages.  A good example in this regard was the gold mines of Anglo American and other gold mining corporations in the English establishment.  
 During the 1960's and early 1970's these mines continues with migrant labour, the compound system and extraordinary low wages.  If we take these low wages and poor health and safety situation in the compounds and mines into account, the question arises whether the human rights of the migrant workers were not grossly violated during the 1960' and the early 1970's.   
 Although the Progressive Party raised very important criticisms against apartheid during this period I am not aware of similar criticism in Parliament by the Progressive Party against the way Anglo American and other gold mines exploited migrant labourers.  During a speech made in Stellenbosch in May 1972, Mr Harry Oppenheimer defended the low wages of migrant workers in his mines with the feeble argument that although we can pay higher wages, such higher wages would put the Afrikaner gold mining companies out of business.  
 A comprehensive policy of social engineering was implemented by Dr Verwoerd and his successors to increase the capital intensity of the economy in an attempt to make it less dependant on African labour. Due to these policies the capital labour ratio increased dramatically over the last 30 - 40 years and the South African economy became seriously distorted.  
 The present tendency towards jobless growth can to a extent be blamed on Verwoerdianism.  What should be emphasised however is that many business, both Afrikaner and English operated enthusiastically within the separate development of Verwoerd and made huge profits, for example in border industry operation. 
 The power relations within the structure of white political supremacy and racial capitalism change yet another time as also happened in 1948 during the middle of the 1970's.   This paradigm shift brought about a close and rather abnormal collaboration between this securiatic state of P W Botha and private business in a joined attempt to perpetuate white supremacy.  the business sector, both English and Afrikaans business supported the Botha Government rather enthusiastically in three of his policy projects.  Firstly in his relentless attempts until 1986 to make a success of the Verwoerdian separate development projects.  
 Secondly, in Botha's ambitious total strategy project to counteract the alleged total onslaught and to perpetuate white supremacy and racial capitalism.  
 Thirdly in implementing Botha's new apartheid strategy that was in fact launched on request of the business community in an attempt to break out of the stranglehold of stagflation.  
 Due to the close collaboration and overlapping interests of main partners in PW Botha's policy agenda, rather artificial integration of state and capital took place.  In 1979 and '81 the Carlton and Goodhope conferences took place to enhance agreement on policy issues and to institutionalise the role for private sector capitalist in the growing beurocratic state.  The different kinds of intertwinement between the government and business raised the question about who was coopting whom and at what price. This is a rather difficult question to answer. Perhaps the best answer is that everyone of the main players in the comprehensive total strategy compact of power was of the opinion that we was coopting the other through the close collaboration between this securocratic government and private business with Armscor as the pivot on which everything hinged. A military industrial complex was created.  
 This complex was from a financial point of view extraordinary advantageous in a declining economy to those businesses that were part and parcel of the structural pairing.
 It was not surprising that an overt and covert agreements between private and public sector institutions and lucrative transactions between Armscor and its multitude of subcontractors set a scene for all kinds of corrupt wanglings that in due time, especially when Botha's reform generated after the rubicon into a policy of cooptive dominance that became institutionalised as a system of structure corruption. 
 As part of the total strategy P W Botha replaced the policy of Afrikaner favouritism with a policy of patronage towards those business co-operation with him in the military industrial complex and in sanction busting.  Botha granted the business the so-called new apartheid strategy in the Wiehan and Rickert reforms.  Although these measures went a long way towards of meeting business demands for a more flexible labour market we should not forget that the main purpose of these measures was to entrench and to perpetuate overall white control.  The business sector, both English and Afrikaans that requested the new apartheid strategy, now claims that it has been instrumental in the abolishment of apartheid.  This is a rather opportunist and perhaps even a hypocritical claim.
 It should be remembered that the new apartheid strategy was only a modern version of apartheid and definitely not an antiapartheid policy.  Although it improves the wages and living conditions of the black insiders in urban areas, it caused directly and indirectly a considerable deterioration in conditions of the black outsider in rural areas.  We should also remember that the main purpose of these measures from Botha's point of view was to entrench and to perpetuate white control.  Botha succeeded temporarily in this purpose.  We can put forward the argument that the new apartheid measures in conjunction with the rather successful total strategy propaganda, attained a pseudo or sham legitimacy of the Botha government in the eyes of the Reagan and Thatcher governments.  The close collaboration between business and the Botha government and especially the business partaking in the industrial military complex was undoubtedly and intrinsic part of the white resistance against the struggle of the liberation organisation.  Business therefore not only abolished but perpetuated the life of the Botha government and with it apartheid. 
 Business organisations like the Afrikaners Handelsinstituut and SAPO also claimed that the policy of apartheid has made South Africa poorer than the country and it's people would have been. Whether the system of racial oppression in all its ramifications was dysfunctional for capitalism during say the 100 years from 1870 until  1970 is a very controversial matter. The racist system was until 1970 in all probability conducive for economic growth but nonetheless a  morally despicable system.  It is of course of little avail to split hairs whether racial capitalism was conducive for economic growth form say 1870 to 1970.  When racial capitalism is evaluated from today's point of view the really important questions are firstly whether it was a moral system and secondly what has been its distributive effect?  The racist system, immoral and inhuman character stands above dispute.  It is really a pity that the submissions made by business did not emphasise this point explicitly.  Most of the business submissions .. (tape end) ...physically and without reservation that the power structures underpinning white political supremacy and racial capitalism for 100 years were of such a nature that whites have been undeservedly enriched and people other than whites undeservedly impoverished.  
 I do have  Mr Chairman about four pages, seven points and which I explain and how whites were enriched and the blacks impoverished.  If you can ask me a question I will give a summary of my summary.
 If one understands the structural nature of South Africa's political and economical system correctly then it is clear that the one side of the South African structural coin impoverished the Africans while the other side of the same structural coin enriched the whites, especially during the first 70 years of this century.  In his review of Kadar Asmahal's Book Mamut Mamdali, make an important difference between perpetrators and victims on one hand and beneficiaries and victims on the other hand.
"In the South African context perpetrators are a small group as are those victimised by perpetrators.  In contrast beneficiaries are a large group and victims defined in relation to beneficiaries are the vast majority of society".
I am very much in agreement with Mamdali that social justice demands that those who have been the beneficiaries of the power structures of white political supremacy and racial capitalism have responsibility to make quite a substantial sacrifice towards those who have been the victims of these power structures.  Although white political supremacy has mended, a large part of the structures of  racial capitalism is still very  much in place and with it the concentration of huge economic power and privileges in very few white hands, namely the hands of white business and white corporations.