Manuel wins union support for taking on Wild West-style capitalism
February 13, 2009
 By Terry Bell
Only Khulile Nkushubana, the general secretary of the more recently formed Confederation of SA Workers' Unions, feels that Manuel "papered over the cracks" on Wednesday. Nkushubana has, in the past, called for "radical and dramatic steps to deal with a global economic collapse", and wants measures to close the vast wage and welfare gap. He promotes nationalisation rather than bailouts as the answer to ailing companies.
Cosatu general secretary Zwelinzima Vavi would disagree, but also thinks that Manuel should have gone further, especially in terms of social expenditure.
While he welcomes increases in such spending, he points out that the child support grant was not extended to 18 years, as was promised in the ANC manifesto.
Vavi takes issue with Manuel on state pensions.
He maintains that the increase to R1 010 does not compensate for inflation.
Like National Council of Trade Unions general secretary Manene Samela and Federation of Unions of SA general secretary Dennis George, Vavi is concerned about implementation of declared budget targets.
Says Samela: "The budget was generally fair in terms of its intentions, but experience has shown that government often lacks the capacity to ensure that beneficiaries receive what is promised." He points to a "classic recent example" in the non-payment of agreed subsidies to bus operators, which resulted in severe transport dislocation.
However, George and Samela both "broadly welcome" the budget.
George is "fairly confident" that many of the bottlenecks and other problems will be straightened out next week.
On Wednesday representatives of the government, business and labour will discuss government's response to the proposals for dealing with the economic crisis that were put forward through the Nedlac forum on January 29.
Says George: "Many of the points raised in the Nedlac document were reflected in President Kgalema Motlanthe's state of the nation address and were also evident in the budget speech."
He feels the government has shown the will to take on board the major concerns of the labour movement.
The fact that job retention and creation has been prioritised is a point that all the unions have welcomed.
However, Manie de Clerque, the deputy general manager of the PSA, is concerned about Manuel's mention of being able to save R19-billion through "cuts and efficiencies" in the public service.
"While we praise minister Manuel for making a priority of job creation and for committing to better social grants, we hope this is not at the cost of public service job losses or a reduction in the services provided to the public," he says.
But overall, the labour movement seems to feel that the government is committed to pursuing "pro-poor" policies, even if these policies do not go as far as individual unions or federations might like.
One reason for this confidence is Manuel's condemnation of the "laissez faire unregulated (or aggressively deregulated), Wild West model of free market capitalism without prudential regulation and supervision".
In some quarters, this was seen as a radical and new departure for a government minister.
However, apart from the reference to Wild West, Manuel's attack on unregulated capitalism could have come from debates in the English parliament 289 years ago or, including reference to the Wild West, from a number of parliaments 100 and more years ago.
In England in 1720, parliament effectively banned shareholder companies because of actions that created financial crises and great public suffering. In those days, companies required a charter from parliament to function. The managers - the directors - could, in effect, gamble with such funds, but with all parties involved sharing responsibility for the actions of the chartered company.
As a result of the first big share market scam, the so-called South Sea Bubble of 1710, shareholder companies, with some exceptions, were outlawed in England for 105 years from 1720.
When the "Bubble Act" was repealed in 1825, corporations again boomed - and so did various shady deals.
But even after 1844, when it became much easier to register a joint stock company or corporation in England, the law still insisted that all shareholders were jointly responsible for the company's actions.
So a shareholder's personal wealth could be forfeited to cover company losses in much the same way that a sole trader or partnership can be dealt with today.
Both in England and in the US, big business pressed hard for a limit to this liability, and in 1830, the US state of Massachusetts became the first government to introduce limited liability for business. England followed suit 26 years later.
But there were various safeguards written into this limiting of corporate liability.
Corporations were strictly regulated as to the amount of capital they could accumulate and the purposes for which they existed. Even the locations in which they operated were clearly defined by law.
This obviously curtailed laissez faire or wholly free trade, and increasingly powerful business lobbies ensured that all the safeguards had gone by the board by the end of the 19th century.
Mergers and acquisitions followed as the 20th century dawned.
Given this history, truly "pro-poor" policies may be possible in future only if the measures that formerly restricted Manuel's "particular model of capitalism" are revisited and perhaps applied.
This would probably amount to something close to the maximum reform of the system that is possible, or that the trade unions could demand.
As the Italian revolutionary thinker Antonio Gramsci noted: "Trade unionism is evidently nothing but a reflection of capitalist society, not a potential means for transcending capitalist society. It organises workers … as wage earners, that is, as creations of the capitalist system of private property, as sellers of their labour power."
Apparently confirming Gramsci's thesis, the basic trade union demand is for a bigger, growing and better market for that labour power.
But to achieve this limited aim, it seems that it will be necessary to regulate, at least, those aspects of the capitalist model that have evolved over little more than the past century.
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