*Solution*? No comrade, no one wants to stop there, be sure! The futility of *solving* capitalism's local and global overaccumulation crisis at the scale of the nation-state is where we in the marxian camp logically depart from the Keynesians. It's just that the nation-state is the most logical line of defense under current circumstances (given how badly arrayed the balance of forces are at the global scale). The nation-state is where most Transitional Demands are made. Isn't capital controls just such a demand? Likewise, isn't delinking from WTO rules a necessary if insufficient basis for setting up a more radical developmental project? Or alternatively do you want rich white South Africans to continue taking their apartheid wealth out of here? And international traders to undermine any attempt at economic planning?
> Autonomy from the demands of capital, which
> sucks up ever more living labour to add to its dead hoard, has no place in
> this Keynesian vision.
Right, so the next (and crucial) step in the argument is the decommodification strategy, which is moving along quite nicely in SA. For those not on our e-debate listserve, I'll just attach the piece I wrote on the topic for yesterday's weekly paper, the Mail and Guardian. I think the phasing of the international movement's unifying strategy/ideology is, quite logically, to demand a restoration of democratic rights and national economic autonomy (getting out from under the boot of the IMF/WB and global financial speculators); but simultaneously taking the organic social struggles for "autonomy from the demands of capital" as you put it -- specifically, decommodification/destratification/degendered access to basic goods in the first instance -- while over the medium term constructing a bottom-up approach to regionalism, as a more coherent site... but I'll argue this in a moment, when replying to Sam's post...
Mail and Guardian, 13 October 2000
More government confusion on privatisation?
by Patrick Bond
Is privatisation bogged down again? In the wake of the state asset restructuring policy issued by state enterprises minister Jeff Radebe in August, the recent Stats SA announcement of worsening income inequality, and last week's Black Economic Empowerment Commission report, social development priorities may be on the front burner again.
Both the Constitutional Court's Grootboom decision on municipal shelter/services responsibilities and the ANC Local Government Election Manifesto can be read as promoting a "rights-based" municipal services strategy, instead of the existing approach: cost-recovery pricing augmented by an ineffectual "indigence" grant.
But how will big business react, once the adverse implications for municipal privatisation become clear?
So far, perhaps in view of the country's unconscionable inequalities, opposition has been muted, even though Business South Africa fought extremely hard in the National Economic Development and Labour Council during 1996-97 against precisely such cross-subsidisation on municipal services.
Business SA promoted the 1994 World Bank strategy--which became the Department of Provincial and Local Government's "Municipal Infrastructure Investment Framework"--through which an inadequate "equitable share" grant was made available so that municipalities could provide relief to those who qualify as "poor." But a tiny proportion received such benefits.
The new, wider-ranging approach appears to be based on universal rights, redistribution and cross- subsidisation.
"ANC-led local government," the Manifesto promises, "will provide all residents with a free basic amount of water, electricity and other municipal services, so as to help the poor. Those who use more than the basic amounts will pay for the extra they use."
The Manifesto reaffirms an oft-forgotten 1998 promise to the municipal workers union: "The public sector is the preferred option to provide services." Although the Manifesto concedes that "strictly regulated" partnerships with the private sector are still feasible, the question now is whether they are desirable.
Who would want to invest in a South African city's water supply, where a large proportion of people cannot afford to pay, yet will potentially demand their legitimate constitutional right to consume, in the wake of Grootboom?
When World Bank economist John Roome advised then-water minister Kader Asmal in 1995 against cross- subsidisation, he argued that it "may limit options with respect to tertiary providers--in particular private concessions [will be] much harder to establish."
Correctly, Roome reasoned, attempting to compel a private company to charge smaller numbers of high-volume bulk users more for each unit of water notwithstanding economies of scale that make it cheaper to supply, and providing numerous small users with free water for their basic consumption, cuts squarely against the grain of the profit motive.
Roome later claimed, in the 1999 Bank Country Assistance Strategy, that his advice was "instrumental in facilitating a radical revision in South Africa's approach to bulk water management."
Until now, orthodoxy reigned. The policy definition of a "lifeline" water price, drawn up by national bureaucrats in 1994, required payment for "operating and maintenance costs," i.e., full marginal cost-recovery.
Such views still prevail in a March 2000 World Bank document (Sourcebook on Community Driven Development in the Africa Region): "Work is still needed with political leaders in some national governments [in Africa] to move away from the concept of free water for all." As for communities, the Bank's objective is to "ensure 100% recovery of operation and maintenance costs."
But when major delivery NGOs like Mvula Trust and the Independent Development Trust tried this several years ago, they discovered that it led to systematic project breakdown. National government's water projects only achieved around 1% cost-recovery, and most of the taps Asmal unveiled from 1995-99 ran dry.
The same problem awaits any water privatiser. A year ago, finance minister Trevor Manuel told the US-South Africa Business and Finance Forum, "Foreign investment in state-owned enterprises allows for access to cutting- edge technologies and increases the effectiveness with which these entities can deliver on the rollout of essential services."
But without enforcement of full cost-recovery, the incentive under privatisation is for a company to "cherry-pick" the good customers, and avoid serving the impoverished masses.
And if long-delayed constitutional socio-economic rights really do come into effect, the cherry-picking practice- -as exhibited in Eastern Cape water privatisation pilot projects since the mid-1990s--may be challenged, not by state regulation but by people's power and in the courts.
Thus, even if it sets back privatisation, the conventional approach is being reversed, and just in the nick of time for the poor.
Ironically, tragedies like the 1 600 new cholera cases in KwaZulu-Natal--of which nearly two dozen have been fatal--and an ongoing diarrhoea epidemic in Springs have also brought to the public's attention the need for policy change.
Although water minister Ronnie Kasrils claims the diseases result from poverty, that's not necessarily true: they are occurring in areas already poverty- stricken but not plague-ridden, for a simpler reason: civil servants cut off water supplies to thousands of poor people because of renewed cost-recovery enforcement, even in the run-up to municipal elections for which other town councils are desperately reconnecting services.
"There is a very serious contradiction between politician promises and the behaviour of bureaucrats, as witnessed by the cholera and privatisation," says Abie Ditlhake, secretary of the SA Non-Governmental Organisation.
Moreover, president Thabo Mbeki's commitment to Cosatu's congress that 6 000 litres of water per month will be given free is just half the amount demanded by advocacy groups like the SA Municipal Workers Union and Rural Development Services Network.
Privatisation plans are still being steamrollered, say critics in most of South Africa's big cities, and national-local funding transfers may not be sufficient to pay for the ANC Manifesto's services offer in most towns that lack a wealthy population from which to redistribute.
But it seems evident that recent events add pressure on municipalities not to privatise, and instead intensify redistribution so as to provide all residents with services.
***
Patrick Bond is co-director of the Municipal Services Project based at Wits (http://www.queensu.ca/msp).
Patrick Bond (pbond at wn.apc.org) home: 51 Somerset Road, Kensington 2094 South Africa phone: (2711) 614-8088 work: University of the Witwatersrand Graduate School of Public and Development Management PO Box 601, Wits 2050, South Africa work email: bond.p at pdm.wits.ac.za work phone: (2711) 717-3917 work fax: (2711) 484-2729 cellphone: (27) 83-633-5548