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Inaugural Lecture: Professor Patrick Bond

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Patrick Bond, Distinguished Professor of Political Economy delivered his Inaugural Lecture.

South Africa’s economic commentators warn on a nearly daily basis of calamitous times ahead, as the fundamentals of the local capitalist system appear to be threatened by fiscal over-reach and a shrinking tax base, by the debts of State-Owned Enterprises in part thanks to malgovernance and procurement fraud, by rising foreign financial liabilities and the spectre of International Monetary Fund intervention, by extremely militant workers whose productivity is allegedly plummeting, and by deteriorating government relations with local business. Demands for "reform" are made by the three all-mighty brothers from Manhattan (Standard&Poors, Fitch and Moody’s) who join the three Saxonwold brothers (the Guptas) engaged in ‘state capture’ – the first set having influenced the Treasury and Reserve Bank on fiscal and monetary policies against the interests of the vast majority; and the second set having seemingly infiltrated nearly everywhere else in the state.

But such surface-level observations mainly lead to banal policy recommendations: namely, ending the neo-patrimonial control of the state by a tiny conspiracy of corrupt (black) elites, while simultaneously raising the already extreme level of top-down class war by capital and the state against the 60% or more of the society characterised as poor (Budlender et al 2015). The latter is a reflection of crisis-level desperation in the world’s most unequal country (with a Gini Coefficient of 0.77 prior to state spending) (World Bank 2014), combining the angriest working class (World Economic Forum 2016) and most corrupt capitalist class (PricewaterhouseCoopers 2016). To exit this cul de sac requires theorization that transcends, as Thandike Mkandawire (2015: 567) points out, a labeling of South African "neo-patrimonialism [that] can be interpreted as building on methodological communalism where the community serves as the foundational unit of analysis and from whence macro-level phenomena are derived" (i.e. Jacob Zuma’s personal network).

In contrast (though Mkandawire 2015 would not approve), classical 19th century analyses of capital’s laws of motion can be fruitfully applied to the 21st century, and a half-dozen major thinkers have provided conceptual tools to move this project forward, especially in a South Africa that is perhaps the most complex of societies for integrating class, race, gender and environmental power relations in social science. The core explanations of economic crises originally offered by Karl Marx are particularly relevant, holding up well over time in general and also in South Africa. The third volume of Marx’s Capital offers exceptional insights into capitalist contradictions and full-blown economic crises, and deserves much more attention today, exactly 150 years after the first volume of his critique of bourgeois political economy was initially published. Economic crises are now commonplace, and since the 1970s they have been amplifying in the intensity of their fluctuations, in their geographical reach, in the tempo of their contagion, and in the metabolic urgency through which exploitative market-state-society-nature relations unfold.

Analyses of crisis tendencies by Marx (1818-83), Rosa Luxemburg (1871-1919) and David Harvey (b.1935) form an arc linking core processes of accumulation, class struggle, the articulation between capitalism and non-capitalist spheres, and other spatio-temporal processes that entail crisis management: displacement rather than resolution. Capital Volume Three, published posthumously in 1894, provided both unparalleled insights into crisis formation, but also glaring gaps. South Africa is a setting in which not only are crisis conditions playing out, but in which Marx’s analysis can be augmented through work by Luxemburg and Harvey, accompanied by local analysts.

To illustrate, just over a century ago, some gaps in Capital Volume 3 were filled by Luxemburg’s (1913) Accumulation of Capital, in no small part because capitalist/non-capitalist relations were explored as a core process in one of her main case study sites, South Africa (Bond, Chitonge and Hopfmann 2007, Bond 2017). A half-century, in the tumult of South African political economic debate that emerged from the 1960s, research by Harold Wolpe (1980) on "the articulations of modes of production" followed directly in Luxemburg’s spirit. Taken to the global scale, Samir Amin’s (1974) theory of value transfers in North-South trade relations added to our understandings of how capital "cheats in exchange," especially from those sites on the African continent characterised by export of raw materials. Dani Nabudere’s (1990) masterwork in rewriting the laws of motion of capital emphasised its turn to money, financialized sources of profits and extreme vulnerability. And in the late 1990s, Guy Mhone (2000) – former Wits School of Governance director – had firmly theorized why an "enclave" economy was the most appropriate way to describe the Southern African region based on his analysis of worsening uneven development. These are some of the major contributions to classical political economic theory from Africa, too often ignored, although South Africa’s tendencies to "financialisation" and "uneven and combined development" are being fruitfully explored by the best-known Marxist economist active in South Africa, Ben Fine, along with colleagues Samantha Ashman and Susan Newman (Ashman et al 2011).

The 1980s-2000s witnessed other innovations from outside Africa that should now be applied where appropriate. Since 1982, Harvey has revisited Capital and in the process – especially in Limits to Capital and The Enigma of Capital – provided new conceptual framings about space, time and "accumulation by dispossession," amidst his explanation of the capitalist system’s "seventeen contradictions". South Africa, the world’s most unequal and class-antagonistic society, with a corporate class most prone to accumulation by dispossession – or what is termed by PricewaterhouseCoopers (2016), "economic crime" – assists us in providing a concrete case for Capital Volume 3’s contributions to crisis theory.

Capitalist crisis tendencies should, in the spirit of Capital, be more explicitly considered in critical political economic research. After all, over the past half-century, systemic "over-accumulation" tendencies became increasingly evident in the core capitalist countries, alongside a brief heightening of class, gender, race and South-North anti-imperial struggles, and a downturn in the rate of corporate profitability (in value-producing sectors). To address these tendencies, managers of global capitalism have turned to several techniques to displace but not resolve periodic crises. In addition to the standard responses to falling profitability that Marx identified – the intensification of production though a higher capital-labour ratio (the ‘rising organic composition of capital’ that follows ‘relative’ surplus value extraction) together with worker speed-up and casualisation (‘absolute’ surplus value extraction) – these have entailed three techniques especially evident in South Africa:

  • the shifting of capital to sites more amenable, and
  • the stalling of problems by throwing money at them, especially in the form of credit,
  • capital’s tendency towards stealing resources in lieu of generating profits that in ordinary times would emanate from the standard circulation of capital.

These techniques of crisis displacement help us understand capitalist contradictions that feature in Capital Volume Three. This is especially true in the South African context, in what is probably the world’s most acute case of uneven and combined capitalist development.

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