Neoliberalism and the political economy of the 'new' South Africa

South Africa's relatively smooth transition from the institutionalised racism of apartheid to a universally franchised democracy was, from any perspective, remarkable. Even the most astute political pundits would have struggled to predict the process which would see Nelson Mandela and the African National Congress (ANC) dominate a Government of National Unity (GNU) less than a decade after the traumas of the states of emergency of the 1980s. In this sense, much has changed in the 'new' South Africa. However, this article is more concerned with what has stayed the same and why. The shift in the ANC's macroeconomic policy clearly demonstrates that debates about economics can never be separated from politics. 'Economics' is not an inherently rational, technical process: it is a social activity in which various interests compete to determine who gets what, when and how on a global scale. In our opinion, such attempts to remove the 'politics' from political economy should be viewed with profound distrust. Backed by a daunting array of material and financial interests both inside and outside South Africa, successive groups of intellectuals (some of whom held ANC membership) successfully persuaded the ANC elite of neoliberalism's merits. In particular, neoliberalism was portrayed as 'the only game in town', discrediting alternatives before they even reached the negotiating table. The result has been a dramatic about-face in the ANC's economic thinking, whereby the redistribution of apartheid's considerable inequities is no longer the primary goal. Instead, 'good' economic policy fetishises transnational capital in an effort to make South Africa 'competitive' in the global market-place. In practice, this has meant competing with other destitute regions to provide the cheapest and most 'flexible' labour-force.