Reserve bank nationalisation: ANC window dressing

Nationalise ALL banks and finance institutions as the foundation for a socialist economy

by Shaun Arendse

On 7 March President Ramaphosa announced in parliament that the ANC government will nationalise the Reserve Bank. He explained that the ANC had taken a “clear resolution that the Bank should be owned by the people of SA”. This was adopted as policy at the ANC’s 2017 conference under the pressure of their factional struggle. However, coming from the billionaire Ramaphosa, this latest announcement is not aimed at genuinely transforming the lives of working class and poor people.

Political manoeuvres

Rather, Ramaphosa is trying to out-manoeuvre the Zuma-linked ‘radical economic transformation’ faction within the ANC who have been championing the policy. They would portray any delays in implementing the ANC resolution as proof that Ramaphosa is the puppet of ‘white monopoly capital’. Also, as the election approaches the EFF would use the issue in the same way.

Out-manoeuvring his political opponents by implementing ‘their’ policies is the same tactic that Ramaphosa used over the issue of land expropriation without compensation. It is not too difficult for this tactic to succeed. This is because none of the ANC factions or any of the parties in parliament stands for anything other than the defence of the capitalist profit system.

The rhetoric of ‘radical economic transformation’ is in reality the programme of a section of the aspirant black capitalist class. They are not rich enough for their liking and want to use the capitalist state to accumulate wealth. This was the class interest underlying Zuma’s crude ‘state-capture’ policy. Historically, it was how the aspirant Afrkaner capitalist class used the apartheid state. Up to a point, Ramaphosa can balance the interests of the aspirant black capitalists with those of the established capitalist class (who at least were willing to give him a seat at their dinner table!) who above all else demand a ‘stable’ economic environment to guarantee their property and profits. There is no fundamental contradiction.

Letting the ‘cat out of the bag’ in January, the bosses’ newspaper Business Day published an editorial explaining that: “Ownership is not key to the operation of central banks, so in most cases it is irrelevant whether they are owned by the state or private shareholders.” They went so far as to call the debate a “red herring”.

Across the world-capitalist economy it is unusual for a reserve (or central) bank to have private shareholders. Only six other countries are in the same boat as South Africa. The imperialist countries that dominate the South African economy, for example the UK and USA, have wholly government-owned central banks. This is to say nothing of the government-owned and -controlled People’s Bank of China under the Chinese state-capitalist regime.

Bosses’ economic dictatorship

The real issue for the capitalist class, both in South Africa and internationally, is the so-called “political independence” of reserve and central banks. In the media the need for this is put forward as common sense.

But this ‘common sense’ is new. It only emerged as part of the worldwide neo-liberal capitalist counter-revolution of the late 1970s. After a period of economic crisis and sharp class conflict the bosses and capitalist politicians decided they needed to put the most basic levers of the capitalist economy beyond the democratic reach of the working class and poor majority – in case they elected left-wing or socialist governments. Control of central and reserve banks was therefore handed-over to unelected bureaucrats and ‘specialists’. This undemocratic regime developed its international mirror. Equally unelected and unaccountable credit ratings agencies became the capitalist class’s global police force. Doing whatever they demand is also now presented as ‘common sense’.

In keeping with capitalist ‘best practise’, the SA Reserve Bank’s “political independence” is guaranteed by the same constitution which defends capitalist property rights. The Reserve Bank is mandated by the constitution to control interest rates in order to control inflation (price rises). This encourages restraint in government spending on health, education, housing and services. It rewards austerity of the sort that Ramaphosa and Mboweni delivered in their February budget. It promotes tax cuts for the rich, privatisation and outsourcing, as well as unemployment and the holding down of wages across the economy.

 The debate around the nationalisation of the Reserve Bank could shine a light on the real class interests of the bosses that a so-called “independent” Reserve Bank serves. This is what is really making some SA capitalists nervous.

A socialist policy

Should the Reserve Bank be nationalised? We say YES! Kick-out the 650 private shareholders. But why stop there? The ‘big four’ SA banks – Standard Bank, ABSA, FNB and Nedbank – made profits of R40.1 billion in the first six months of 2018. This is where the wealth is sitting for socialist economic transformation in the interests of the working class and poor. The entire financial system, including the ‘big four’ banks and major insurance companies, should be nationalised. This would lay the foundation for a democratically planned economy run in the interests of the working class and poor.

But we do not want a nationalised banking sector run by unelected pro-capitalist bureaucrats anymore than we want a Reserve Bank run by them. The economy must be under the democratic control and management of the working class.

Our answer to the propaganda that Reserve Bank “independence” is necessary to control inflation is simple – price controls democratically supervised and enforced by workers and communities. If bosses ignore these controls and try, for example, to off-set wage-rises by increasing prices their companies should be occupied by workers and nationalised too. If the bosses try and sabotage a socialist economy with ‘capital flight’ (i.e. taking their money overseas) a workers’ government would put in place capital controls to keep the money here. Appeals would have to be made to workers in other countries for class solidarity and to lay the foundations for a worldwide socialist plan of production.

On this socialist basis the working class can enjoy full employment, permanent jobs, a living wage, high quality and affordable housing, health, education and other services. Workers must organise to demand that their trade unions take-up this programme as the only answer to the fake radicalism in the ‘debates’ of the capitalist politicians around the nationalisation of the Reserve Bank. We must expose their rhetoric and their propaganda and demand a society genuinely run in the interests of the majority.

In the mass class struggles that will develop under the weight of capitalism’s economic crisis this programme must be adopted as part of the working class’s war plan for conquering the commanding heights of the economy. Workers need to campaign for a socialist programme in their trade unions and a leadership willing to fight for it. This must include the trade unions taking the lead in the creation of a mass workers party capable uniting the working class in mass struggle guided by a socialist programme.

  • Reject the window-dressing of capitalist politicians! Nationalise the Reserve Bank as part of the socialist transformation of the finance system. Kick-out the capitalist bureaucrats and ‘specialists’. For a socialist economic policy in the interests of the working class and poor majority.
  • Place society’s wealth in the hands of the working class! Nationalise under democratic working class control Standard Bank, ABSA, FNB and Nedbank along with the entire financial sector. Guarantee the savings of all working and middle class people and small businesses. Bond and debt relief for struggling home-owners and small businesses. Abolish garnishee orders!
  • Combat the sabotage of the bosses! For a state monopoly of foreign trade alongside capital and price controls enforced by democratically elected committees of workers and poor communities. Lock-out the bosses in non-complying industries through workplace occupations. Demand nationalisation under workers control. Build solidarity and international links with the workers of the world – lay the basis for a worldwide socialist plan of production.
  • Conquer the commanding heights of the economy for the working class and poor majority! Nationalise under democratic working class and community control the banks, the mines, the commercial farms, the big factories and big businesses and retailers. A publicly owned and democratically planned socialist economy to meet the needs of all and not the profits of the capitalists.
  • Forge the fighting unity of the working class in a party of mass struggle! Build a socialist mass workers party to unite the struggles of the workplaces, the communities and the youth as a vital step toward the creation of a mass revolutionary party to lead the socialist transformation of society!
  • For a socialist South Africa, a socialist Africa and a socialist world!