The Globalization of Apartheid: South Africa, Europe, World

By | August 28, 2014

South Africa recently celebrated twenty years of “democracy” since a Black majority government was formed by the African National Congress (ANC) and its allies in 1994. South Africa has been a central, not a peripheral player in world society for 150 years.  Its inhabitants have long been engaged in the struggle for democracy and equality.  This is why its leading political figures include world famous individuals like Mohandas K. Gandhi and Nelson Mandela.

South Africa’s gold underpinned booming world trade in the decades leading up to the First World War.  It was then another jewel in the British Empire alongside India, and it received the lion’s share of British foreign investment. South Africa’s mining industry played a crucial role in establishing the racial divisions which organized world society in the 20th century.  That racial order, based on the assumption of categorical inequality among human beings, eventually gave rise to its antithesis within South Africa and subsequently to the worldwide anti-apartheid movement. The demise of apartheid in South Africa twenty years ago was a turning point in Black emancipation on a par with the abolition of slavery and the collapse of colonial empire.  It may well be seen as a moment when race — and other ascribed characteristics such as gender — began to lose their political significance in human affairs.

South Africa still merits the world’s attention today. Its political revolution in the shape of formal democracy, however, is marred by the fact that it remains a world leader with respect to inequality in the distribution of wealth and income. Many of the rights conferred on all South African citizens by its widely-celebrated constitution have yet to be realised in practice; and it is by no means clear how this could be done.  In the past twenty years South Africa’s situation has become a great deal more confused than in the heyday of apartheid, when things appeared to be written, literally, in black and white.  Numerous accounts try to make sense of the present confusion.[1]  White reactionaries argue that the country is heading downhill rapidly now that they are no longer in charge. ANC boosters insist that the party in government knows what it is doing and that GDP will soon begin to grow, bringing more jobs and less poverty and inequality. Other commentators point to the challenges the government faces, highlighting the effects of the capital flight that has followed the ‘neo-liberalisation’ of the post-apartheid South African economy. This was dominated in the late twentieth century by the “Minerals and Energy Complex”; and corporations in these sectors have taken advantage of the ANC’s business-friendly policies to ship their profits offshore.  There is much debate over whether the ANC government had any choice in adopting such policies.  Was it forced to take these steps against its will and judgement?  Or is it now home to African nationalists for whom the first, and possibly the only, goal is to create a black bourgeoisie to join hands with, and maybe in due course replace, the old white one?

There are no clear answers to these questions yet; nor do these various narratives offer a clear ideological direction or political recipe.  But perhaps this is not a bad thing.  Rather than bemoan the absence of definite formulas, the present confusion may help us to escape from the un-dialectical extremism of Cold War thinking and make a more realistic appraisal of the possibilities.  Clinging to capitalism or socialism as the answer will not help at this time.  Neither furthered democracy and equality in the previous century; and, now that the economy has gone global, leaving politics to languish within national borders, the world cries out for new ways forward.  In view of its history, South Africa is a good vantage point from which to think along these lines.  Any durable resolution cannot be for South Africa alone, but for the region and indeed the world at large.  South Africa was never just a nation-state standing alone. The human struggle for greater democracy and equality requires us to place the country and region within world development once more.

Building a human economy from below

With this in mind four years ago, John Sharp and I launched a programme at the University of Pretoria dedicated to fundamental research on how to build a “human economy”.  Southern Africa faces a significant moment.[2] For more than a century the regional economy was dominated by a migrant labour system supplying South Africa’s gold and diamond mines, the Zambian Copperbelt and Katanga in the Congo (DRC).  Mining once generated millions of jobs. The wages and welfare provision provided by the mines had effects well beyond the industry itself.  Today this is largely a thing of the past.

For a long time rural areas across the region acted as labour reserves for the mines. Migrant workers, sustaining and sustained by tight-knit family networks, moved back and forth between town and countryside.  They invested cash and other urban resources in agriculture and informal enterprises based on their rural homesteads.  If development in the global North has often been seen as the linear replacement of rural informality with urban and state bureaucracy, the two systems developed side by side in southern Africa. The colonial settlers exploited and discriminated against African workers, and a softer version of segregation in the form of limited class mobility has continued since independence.  Yet the migrant workers and their families worked round the political restrictions placed on them, producing and distributing wealth in alternative economies of their own making that afforded them a measure of autonomy from the structures of settler colonialism.  From the perspective of individual workers, these alternative economies were aimed at ‘building the house’ – not just keeping household members in rural areas alive, but involving them in economic activities that enabled the worker and his dependents to build meaningful lives and secure the social reproduction of families over time.

Mining is very different today.  The large corporations have casualized and much reduced their labour forces.  They have outsourced production, cut down drastically on welfare provision, and move their profits offshore without hindrance.  Deprived of tax revenues, the region’s governments are less committed than before to providing quality services and concentrate instead on attracting foreign private investment which can usually expect freedom from regulation.  Governments delegate macro-economic management to technocrats operating under instructions from the international financial institutions, so that politicians who have little say about economic development are left to mouth meaningless platitudes about GDP growth and employment creation.

This makes seeking a livelihood in southern Africa all the more challenging.  The global crisis has hit the region hard and major structural changes have overtaken the regional economy.  These changes are often summarised as the rise of an economic regime known as “flexible capitalism”.  This system has been held responsible for escalating inequality and impoverishment in recent decades.  But workers in the settler mining economy were able to take advantage of opportunities for self-organized development, and now southern Africans are exploring how to build a future through and around flexible capitalism.

Local alternative traditions are as flexible in their own way as capitalism.  They may even be expanding in the twilight of the mines.  Flexible capitalism obliges people to be more flexible themselves.  They move continuously between formal and informal structures, and forge proliferating social ties linking them to all varieties and scales of organisation.  They draw on local and ethnic identities, church membership, educational institutions, and large firms in new sectors, while networked technologies allow them to move easily between their work situations, rural homes and street markets, while transferring money across the region and the world.  The system of mobile phone banking, M-Pesa, is one such technology; it works better in Kenya, where the banks are not so strong, than in South Africa, where they are hegemonic.  Ordinary Kenyans can adapt the technology to their own purposes rather than simply adapt to the imperatives of the telecommunications monopoly that developed M-Pesa.

Southern Africans from all walks of life transgress the boundaries imposed by their increasingly remote rulers, while developing their own economic institutions around extended families, savings clubs, street commerce and much else besides.  This could be a significant counterweight to the decline of the big mining companies and to the current ravages of casualization.  We must approach people’s livelihood strategies and plans for economic improvement not in isolation from states and markets, but as an integral, semi-autonomous dimension of how these institutions function.  Interactions with large bureaucratic structures, whether public or private, are indispensable to economic life today, as are activities that extend beyond their reach.  Southern Africans are already building their own economic futures, and it is time that development policy took more serious account of them.

The failure of orthodox economics to address the challenges faced by the real economy is widely acknowledged.  We need to find out what people are doing and thinking where they live and make recommendations for economic improvement that engage practically with their circumstances.  This means that awareness of people’s multiple economic practices must replace abstract ideas held in ignorance of them. This, in part, is what we mean by a “human economy” approach.

Europe in the current world crisis[3]

European imperialism made world society in the nineteenth century and the peoples they coerced into their empires spent much of the twentieth making their own independent relationship to the world through an anti-colonial revolution. Things are now very different as a result. Europe is likely to be the main and permanent loser in the current world crisis. Western Europe has been an island of complacency in the seismic upheavals on its Eastern and Southern periphery over the last 25 years. The Europeans themselves treat immigrants from neighbouring territories largely as a threat to their own cohesion and sovereignty. Yet the prolonged crisis of their single currency threatens to exacerbate internal conflicts. Europe and the regions on its borders are once more a threat to world peace. It would not be beyond the Europeans to unleash another world war or at least a collapse of global equity markets. If civil war returns to Europe, the world will feel the consequences.

Europeans still approach their common affairs from a national rather than regional point of view. They cling to their fragmented sovereignties and provide support to populist parties of the right who resist the erosion of imagined national community. After half a millennium of receiving unearned income from the rest of the world, that source is now almost dry. At some level they know that the game is up; but they can’t admit it to themselves. Europe’s ageing population has collapsed, with births often now only half the number of deaths. Immigrants from Africa, Asia and Eastern Europe who work for Western Europeans’ pensions are routinely disparaged and socially excluded. Following the 2007-8 financial crisis, divisions have opened up between North and South Europe that were unthinkable only recently. While the United States and Russia square up over Ukraine, the Europeans say and do nothing.

In 1900 Europe had a population of 400 million, a quarter of the world total and three times Africa’s. People of European descent then controlled 90% of the planet’s inhabited land. By 2100 Asia is projected to have 43% of the world’s population (down from 60% today), Africa 39% and the New World, Europe, Russia and Oceania altogether only 18%. Europe’s share will have shrunk from 25% to 6% in 200 years. The Asian manufacturers, especially China, have recognized Africa’s centrality to the growth of world demand in the coming century, but the Europeans still cling to a model of world society in which their own dominance is taken for granted.

Europeans now find themselves at centre stage of the world economy, for the first time since the 1930s, with financial markets hanging on each negotiation and election. The central problem, however, is a deep-seated shift in the world economy, with national and international political institutions now unable to influence a money circuit that has gone global. Money has acquired its pre-eminence because the economy has been extended rapidly from a national to a global level without any of the social regulation that existed before. The current crisis is thus not merely financial, a moment in the historical cycle of credit and debt. The removal of political controls over money in recent decades has led to a situation where politics is still mainly national, but the money circuit is global and lawless. As the need for international cooperation intensifies, the disconnection between the economy and political institutions makes practical solutions unthinkable and world war increasingly likely as a result.

The euro crisis is pushing Europe’s rulers inexorably along a path of social polarization, between the demands of corporate bureaucracy and a population rapidly being stripped of the political, legal and economic powers they won after 1945. The whole story is a Greek tragedy in both the ancient and contemporary senses, where even the best intentions can no longer remedy the consequences of past mistakes. The tragedy is that, by granting undemocratic powers to the European Central Bank and indirectly to the Germans, the EU has ensured that the euro’s stability will be achieved only at the cost of general economic hardship. Mass political resistance will be the inevitable result, thereby further undermining the currency and the Union itself.

Money in the making of world society[4]

We are all subject to larger historical developments whose causes are less obvious to us than our own everyday lives.  Ultimately this involves humanity’s shared predicament, the common need for seven billion of us to discover ways of living together on this planet.  One task of a human economy approach is to help people link their intimate circumstances to more inclusive levels of social interdependence.  Starting from what people do in their home region, they must extend their reach towards forming an operational vision of the world economy that sustains us all.

The last three decades of globalization have seen a rapid extension of society to a more inclusive level than the previous national norm.  This has been closely linked to money, markets and telecommunications.  Money is the ocean in which we all swim.  It is central to any hope for a more human economy.  Money is not just a means of exploitation, but rather has redemptive qualities, particularly as a mediator between persons and society.  The mine workers of southern Africa understood this dual character of money from the start.  To earn it they had to submit to an oppressive system of migrant labour.  But it was also vital to the construction of a socially meaningful life beyond the confines of that system.

The distinctive feature of our era is the development of communications linking all humanity. This has two striking features.  First, it is a highly unequal market of buyers and sellers fuelled by a money circuit that has become detached from production and politics.  Second, it is driven by the internet, the network of networks.  How are money and exchange changing in the context of this communications revolution?  Unbridled accumulation has been made possible by deregulation in a period of globalisation.  We must now address how world markets might be organised in the general interest.

The extension of society to a more inclusive level has positive features.  Money and markets could serve institutional ends that benefit us all.  Clearly the main political question facing humanity concerns distributive justice.  The current crisis is a moment in the history of money, occasioned by the collapse of the economic system that the world lived by in the last century.  What is ending now is “national capitalism”, the synthesis of nation-states and industrial capitalism.  Its main symbol has been national monopoly currency – legal tender policed by a central bank.

Economics says more about what money does than what it is.  Its main functions are held to be as a medium of exchange, means of payment, standard of value (unit of account) and store of wealth.  Only modern money combines these four functions in a few all-purpose symbols, national currency.  Our challenge is to conceive of society as something plural rather than singular, as a federated network rather than a centralised hierarchy, the nation-state.  The separation of functions between different types of monetary instruments was crucial to money’s great escape from the rules of the post-war consensus.  Central bank control has been eroded by a shift to money being issued in multiple forms by a globally distributed network of corporations, not just governments and banks.  Radical cheapening of the cost of transferring information has introduced new conditions for engagement with the economy. The replacement of single currencies by many types of specialised monetary instruments is one result.

We need to extend systems of social rights to the global level before the contradictions of the market system plunge us into another world war.  But most politicians resist such a move.  Where are the levers of democratic power to be located, now that globalisation has exposed the limitations of national economic management? By studying monetary relations on different scales, from intimate encounters to foreign exchange markets, we can help create new meanings and linkages between everyday life and the human predicament as a whole.

The world now has universal media for the expression of universal ideas.  Money is essential to their dissemination.  It is a constitutive part of our multi-layered identities.  We learn about politics and belong to larger groups through participation in monetary networks that exclude and entrap us even as they extend our horizons.  The notion of society itself is reshaped by this multifarious expansion.  If we hope for a more peaceful and integrated world society, money will certainly play an important role in its formation.  We need to build an infrastructure of money adequate to humanity’s common needs, even if this seems impossibly remote at present.  One move in this direction goes by the name of “alter-globalisation”, a body of ideas that has emerged principally from Latin America.  The idea of a human economy offers a bridge to this alter-globalisation movement.[5]

A human economy must be informed by an economic vision capable of bridging the gap between everyday life – the efforts of people everywhere to insert themselves into an unequal society – and our common human predicament, which is inevitably impersonal and lies beyond the actor’s point of view.  Small may be beautiful, and a preference for initiatives grounded in local social realities is hard to dismiss.  But large-scale bureaucracies – national governments, cities, business corporations or regional federations — are essential if our hopes for economic democracy are to be realised.

Money is personal and impersonal, subjective and objective, analytical and synthetic because it mediates the extremes of infinite possibility and finite conclusion.  Money links individual and society; past, present and future; science and story; local and global.  We need to think dialectically through these categories and to work out practical ways of combining them socially.  The two great memory banks are language and money.[6]  Exchange of meanings through language and exchange of objects through money are now converging in a single form of communication, the internet. We must use this digital revolution to advance the human conversation about a better world.  The task is, ultimately, to make a world society fit for all humanity.  Money is one way we can learn to be truly human.

The globalisation of apartheid[7]

In the Great Depression, Maynard Keynes offered a solution to national elites concerned that their governments would be overwhelmed by the poverty and unemployment generated by the economic collapse. It was to increase the purchasing power of the masses. Now the rich countries are similarly cast adrift in a sea of human misery. The main fetter on human development today is the administration of the world economy by nation-states which prevent the emergence of new forms of economic life more appropriate to conditions of global integration. This also prevents the implementation of a Keynesian programme to alleviate world poverty by transnational redistribution of purchasing power.

We might well ask how people live with economic inequality. The short answer is that they don’t, if they can help it. Most human beings like to think of themselves as good. This involves being compassionate in the face of others’ suffering. The worst thing would be to be held responsible for that suffering in some way. Better to explain it away as having some other cause: perhaps the people deserve to suffer or are just pretending to be poor. Better still not to have to think about it in the first place. In the last resort we can ignore the problem by defining them as less human (not like us). Distance in every sense — physical, social, intellectual, emotional – is the answer to the unwelcome conflict between inequality and human compassion. And, while each of us engages in thousands of voluntary acts distancing ourselves from the suffering of others, the task is performed more reliably, at the communal level, by institutions.

An institution is an established practice in the life of a community or it is the organization that carries it out. It is a place to stay, in opposition to the movement, flux and process of life itself. Institutions and agriculture go together. The conflict between fixing society in the ground and reinventing it on the move underlies our contemporary global crisis. The maintenance of inequality depends on controlling the movement of people. This is why freedom of movement was central to the early liberal revolutions. If the poor are to be kept at a proper distance, it would not do to have them invade the protected zones of privilege established by the rich. Better by far that they should know their place and stay there.

The two principal institutions for upholding inequality, therefore, are formal political organization (law enforcement by states) and informal customary practices shared by members of a community (culture). Their task is to separate and divide people in the interest of maintaining rule by the privileged few. One of the ways modern ruling elites everywhere have come to terms with the anonymous masses they govern is to pigeon-hole them through systems of classification.

To the extent that society has become a depersonalized interaction between strangers, an important class of categories rests on overt signs that can be recognized without prior knowledge of the persons involved. These are usually visual — physical and cultural characteristics like skin colour or dress; speech styles may also sometimes be taken as revealing social identity. Modern states are, of course, addicted to identity cards. By a standard symbolic logic, these sign systems are often taken to reveal personal character — trustworthiness, ability and much besides. On this arbitrary basis, personal destinies are decided, people are routinely included and excluded from society’s benefits, inequality is made legitimate and policed, the world is divided into an endless series of ‘us’ and ‘them’ and monstrous crimes against humanity are carried out.

After the Second World War, South Africa’s ruling National Party set out to institute what they called “apartheid”. Despite the close integration of people of European and African origin in the country’s economic system, they decided to separate the ‘races’, by allocating to ‘Blacks’ a series of homelands (themselves fragmented according to ‘tribal’ origin) and denying them the right to reside in the cities, except with a pass (work permit). Within the cities, black and white areas were kept apart and were unequally endowed with resources. Keeping up such a system required the systematic use of force. Internal resistance built up gradually and the rest of the world expressed varying degrees of outrage, eventually translated into a boycott. It is always easier to condemn something elsewhere than to confront it closer to home. The release of Nelson Mandela in 1990 signalled a retreat from this policy which culminated quite soon in African majority rule. But apartheid can’t be abolished by the stroke of a pen. After the official demise of apartheid in South Africa, something similar is how the inequalities of world society are managed everywhere today.

Inequality is intrinsic to the functioning of the modern economy at all levels from the global to the local. The rich and poor are separated physically, kept apart in areas that differ greatly in their standards of living. It is impossible to prevent movement between the two areas in any absolute sense, if only because the rich need the poor to perform certain tasks on the spot (especially personal services and dirty work of all kinds). But movement of this sort is severely restricted, by the use of formal administrative procedures (state law) or by a variety of informal institutions based on cultural prejudice. This rests on systems of classification of which racism is the prototype and still an essential means of inclusion and exclusion in our world. Europe, having lost the world it made, now retreats into the laager of its isolation.[8]

There is a great lie at the heart of modern politics. We live in self-proclaimed democracies where all are equally free; and we are committed to these principles on a universal basis. Yet we must justify granting some people inferior rights; otherwise functional economic inequalities would be threatened. This double-think is enshrined at the heart of the modern nation-state. So-called nations, themselves often the outcome of centuries of unequal struggle, link cultural difference to birth and define citizens’ rights in opposition to all-comers. The resulting national consciousness, or in Europe’s case a tentative regional identity, built on territorial segmentation and regulation of movement across borders, justifies the unfair treatment of non-citizens and makes people blind to the common interests of humanity.

Race, nationality, ethnicity, religion, region and class may be signalled in many ways. The pervasive dualism of modern economies derives from the need to keep apart people whose life-chances are profoundly unequal. The apartheid principle is now to be found everywhere in local systems of discrimination, more or less blatant.

The historical relationship between the peoples of rich and poor countries is one of movement in both directions. In whose interest is it to control this movement systematically? Concern with ‘immigration’ to countries in Europe, North America and elsewhere is intrinsically tied to the ‘development’ of poor areas by the economic inequality on which contemporary world economy rests.  Western workers are facing increased competition both at home and abroad, just as capital has become truly global for the first time by diffusing to new zones of production and accumulation, notably in Asia.

Neoliberalism aims to dismantle the social democratic institutions that arose in the mid-twentieth century to protect national workers and their families. This is accompanied by consistent downward pressure on wages through the threat of exporting capital to cheaper countries or importing cheap labour. The result in the rich countries (and in South Africa!) is racist xenophobia exacerbated by job insecurity and rising levels of poverty at home. This is how apartheid is globalized as a social principle. More than two centuries ago, Immanuel Kant argued for the ‘cosmopolitan right’ of free movement everywhere. How far away this is from our mean world! But, sooner or later, economic and political crisis will force a reconsideration. A human economy approach must not just show how people organize themselves today in the face of global inequality, but how society might be made more just.

The world has never been more connected and unequal than now. The reason for both is the freedom enjoyed by global capital. Inequality is administered by territorial states which restrict the movement of people, especially from the poor areas to the rich. This division of the world into zones of high-paid and low-paid labour has its origins in the decades of imperialism before the First World War. It persists in the organization of the world economy as an apartheid system where inequality is informed by the semiotics of race. Resistance to globalization encourages some to seek to reinforce national boundaries against the predations of capital. But more often it plays into the hands of racists and fascists by encouraging xenophobia.

The world needs a new free trade movement that would dismantle the institutions of national privilege and insist on movement as a human right. Only then will the better off be forced to engage with the world outside their fortified enclaves.  The world belongs to all humanity and each of us has a right to move in it as we wish. The most difficult task for humanity is to construct a universal system of justice. A modified Keynesian programme for the world economy, redistributing purchasing power to the impoverished masses, is one step in that direction. As long as popular forces cannot mobilize freely, however, global capital will remain unchecked. An end to global apartheid requires dismantling state controls over the international movement of people. Only then might a human economy emerge.

I am indebted to my colleague in the University of Pretoria Human Economy Programme, John Sharp, for the form and some of the content of this essay; and to Vito Laterza for suggesting that I write it and for his part in our conversation.

[1]For example, K. Hart and V. Padayachee A history of South African capitalism in national and global perspective, Transformation 81/82 (2013): 55-85.

[2]This section draws on a research theme developed by Vito Laterza and John Sharp through a workshop, “Land, money and human relations in southern and central Africa”, held at the University of Pretoria, 5-6 September 2014.

[3] See K. Hart The rise and fall of Europe, Economic and Political Weekly 49.34 (August 23, 2014): 27-30.

[4]This is a second research theme of the Human Economy Programme led by the author which was launched at a conference in Pretoria, 19-21 August 2014.

[5]See K. Hart, J-L. Laville and A.D. Cattani editors The Human Economy:  A Citizen’s Guide (Polity, 2010); K. Hart and J. Sharp editors People Money and Power in the Economic Crisis: Perspectives from the Global South (Berghahn, Human Economy Series No. 1, 2014).

[6] http://thememorybank.co.uk/book/ K. Hart Money in an unequal world (Texere, New York, 2001).

[7]See K. Hart http://thememorybank.co.uk/2008/09/02/the-globalization-of-apartheid/

[8] R. Andersson. Abolish the ‘illegality industry’ at Europe’s borders, Financial Times, 26 August 2014. www.ft.com/intl/cms/s/0/44fc40ac-24a9-11e4-ae78-00144feabdc0.html.

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