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Abstract
This article focuses on the establishment and disowning of the Macro-Economic Research Group (MERG) by the African National Congress in the lead-up to the formation of the democratic dispensation of 1994 and the first elections, overwhelmingly won by the African National Congress (ANC), which still forms the national government of South Africa. Considerable emphasis is placed on the politics of the ANC and to a lesser extent the general situation of the South African economy rather than by dissecting economic debates alone. MERG was a relatively lone substantial voice calling for real structural and institutional changes in the economy, ultimately rejected by the ANC at the behest of business. Two decades after the end of apartheid, it has become a hallmark of liberal criticism of the government to denounce it as following the worked-out agenda of a radical agenda underlying the anti-apartheid rhetoric while the African National Congress clothes itself in the liberation language of the Freedom Charter and sometimes even the supposed first-stage National Democratic Revolution that will precede socialism reflecting the discourse of the South African Communist Party. The following discussion aims to clarify what actually happened in terms of macro-economic policy debates in the transitional years 1990–94 and the consequences.
[Nager à contre-courant: le Groupe de recherche en macroéconomie dans la transition sud-africaine 1991–94.] Cet article analyse l'établissement et le désaveu du Groupe de recherche en macroéconomie (MERG) par le Congrès national africain (ANC) à l'approche de la formation du nouvel ordre démocratique de 1994 et les premières élections, largement gagnées par l'ANC, qui est toujours à la tête du gouvernement sud-africain. L'accent est mis sur la politique de l'ANC et dans une moindre mesure sur la situation générale de l'économie sud-africaine, plus que sur l'analyse minutieuse des seuls débats économiques. Le MERG était une voix relativement isolée plaidant pour de réels changements structurels et institutionnels de l'économie, rejetée finalement par l'ANC à la demande du monde des affaires. Deux décennies après la fin de l'apartheid, il est courant d'entendre les critiques libéraux du gouvernement le dénoncer pour son adhésion à l'agenda radical élimé de la rhétorique anti-apartheid, tandis que l'ANC continue à se draper dans la rhétorique de la Charte de la liberté, voire de la première étape de la soi-disant révolution démocratique nationale qui va précéder le socialisme, reflétant le discours du Parti communiste sud-africain. La discussion qui suit vise à clarifier ce qui s'est passé réellement en termes de débat politique en terme macroéconomique des années de transition 1990–94 et ses conséquences.
Acknowledgements
For the gift of his doctoral thesis, I am grateful to Adam Habib, and to Fumani Mthembi for her interview material. In addition, I want to thank my generous friends Justin Barnes, Patrick Bond, Rod Crompton, Alec Erwin, Ben Fine, Stephen Gelb, Laurence Harris, Gill Hart, Rasigan Maharajh, Vishnu Padayachee, Zav Rustomjee and John Sender for their time and help in various ways with this paper. They may of course disagree with some of the views expressed, which are my own.
Note on contributor
Bill Freund is Professor Emeritus at the University of KwaZulu-Natal and Visiting Senior Fellow at the University of the Witwatersrand. He is the author of The Making of Contemporary Africa and co-editor of Development Dilemmas in Post-Apartheid South Africa amongst other books and articles.
Notes
1. For a sympathetic study of the connection, see Shubin Citation1999.
2. According to Esterhuyse, former Russian leader Mikhail Gorbachev called for an end to the armed struggle (Esterhuyse Citation2012, 46).
3. For instance, the Green Paper of 1979 where Mbeki fought to tone down radical language (Turok Citation2008, 27) or various NEC statements as well as the Constitutional Guidelines of 1988.
4. There are two excellent biographies of Mbeki by Gumede Citation2008 and Gevisser 2007.
5. This was not at this stage because of the influence of conservative teachers. For instance, a Marxist member of the Erosa group to be discussed below, Laurence Harris, had a preliminary major influence on those who attended the School of Oriental and African Studies, London.
6. For the union movement, see amongst many authors inspired by South African workers, Friedman Citation1987, Baskin Citation1991 and Seidman 1994. For the UDF, see also, amongst many others, Seekings Citation2000 and van Kessel, Citation1995.
7. I thank Steve Gelb for this insight but see also Gumede Citation2008, 68.
8. See O'Malley 2002. Here concern is mostly with his relationship to Mac Maharaj which cooled but did not disappear after the split. Naidoo Citation2012, 712, 734.
9. Fumani Mthembi interview (2012) with Fine; Harris to Freund, e-mail letter, 3 January 2013.
10. Harris would however make a big swing away from the left in his views later.
11. Compare his views at an earlier date in Kaplinsky Citation1990.
12. Alec Erwin to Vishnu Padayachee, 30 December 2011. For the NEF as a forum dedicated to putting capital, labour and the state together see Giliomee 351 2012.
13. Messages to the author from Alec Erwin and Rod Crompton.
14. Erwin does point out the significance of a Motor Industry Task Group, initially convened by the government, which eventually developed into the NEF. It is noteworthy that by contrast to other industries which have been devastated by the opening of the economy, the motor car industry has flourished within certain limits and become a significant export factor based on close cooperation with foreign car manufacturers but also continued critical state support of the sort that disappeared, including agriculture. However, there has been an historic shift from a strategy aimed at maximising car production in South Africa to fitting manufacture into global value chains very much on the terms desired by the big foreign companies such as Mercedes and Volkswagen. The manufacture of catalytic converters in South Africa complements the presence of the platinum mines, currently the country's largest exporter.
15. The actual South African-based authors of the speech, all eventually to become wealthy businessmen, were Murphy Morobe, Cyril Ramaphosa and Valli Moosa, Sparks Citation2003, 338–39.
16. Alan Hirsch is not wrong in providing this lineage for the older ANC generation, Hirsch 2005, 31.
17. This is lovingly traced by Sparks Citation2003, who in fact promoted the process personally.
18. See also Sparks Citation2003.
19. Obviously there must have been other progressive interventions from overseas but they are not critical to the literature or the argument in this essay.
20. Indeed Patrick Bond thinks the IMF was crucial in promoting Keys' retention as Minister as well as the continued governorship of Chris Stals at the Reserve Bank. (Sparks Citation2003, 382)
21. ‘Anglo American, who owned the nearby wine estate Vergelegen, offered it to the ANC for its first legal meeting on South African soil.’ Sparks Citation2003, 328
22. This is clear from the unpublished comments of Alec Erwin to me, September 2012.
23. Gumede Citation2008, 74. While he was not unique in this change of heart, the thrust of COSATU was very hostile to this drift. Thus Erwin was a prize catch for Mbeki. But the compliance of the NEC as a whole must have been very significant as well.
24. For Mboweni, see Hirsch 2005, 30. Mboweni was the most equivocal of the three. To his credit, he was for an important phase Minister of Labour who shepherded progressive labour legislation through Parliament very much against the international grain.
25. Sparks Citation2003 is a good source on the extreme hostility of business to MERG. He shared the conventional media and corporate view that instituting a minimum wage doubling the poorest workers' incomes was ‘pure macro-economic populism’.
26. According to Vella Pillay, Walter Sisulu asked him to ‘go slowly’, Fine considered this to be ‘absolutely and completely’ a rejection, tied to MERG being scapegoated as an anti-business tool of the left, and he and Sender were not used again as consultants.
27. Manuel considered Keys a mentor with a friendship first formed while watching a rugby match, Sparks Citation2003,188. Keys also famously expressed a paternal view of ‘this young man’, Erwin. According to Patrick Bond, after a few months as minister for the new GNU, Keys resigned to run the giant mining corporation, Billiton, which he had previously authorised Gencor, a major South African mining house, to purchase from Shell, thus allowing it handily to move its headquarters out of South Africa, Bond Citation2000, 25.
28. For Stals' orthodox views on how a Reserve Bank must function, see Stals Citation1993. He specifically condemns targeting.