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Africa

Is South Africa heading for Apocalypse? Waves of retrenchments and social crisis.

24 September 2021, In Defence of Marxism
Is South Africa heading for Apocalypse? Waves of retrenchments and social crisis.

The ANC government tried to get out of the crisis by expanding credit. Marx explained that credit can temporarily expand the market beyond its natural limits. But eventually, credit has to be paid back with interest. The capitalist policies of the government inflated demand by deregulating the financial markets, which encouraged unsecured lending. But since the crisis hit 10 years ago, this has led to a massive increase in debt. Consumer debt now stands at a staggering 19 trillion rand, with 72 percent of household income spent on servicing debt. More than 10 million people are in arrears on their debt.

It is clear from all of this that what we are witnessing is a deep crisis, which cannot be solved on a capitalist basis without launching a massive assault on the living standards of working-class people. This is precisely what we are seeing now. This is the only option for the ruling class. In order to pay for the crisis, the bourgeoisie is putting the burden on the shoulders of the working class.

This is the reason for the current waves of retrenchments, which have been announced across the major sectors of the economy over the last four months. Standard Bank is retrenching 1,200 workers. Group Five, the construction giant, is planning to retrench thousands. The telecommunications company, Telkom is cutting 3,000 jobs. ABSA Bank is cutting nearly 1,000 jobs. There are major job cuts in the manufacturing industry, with PPC Cement announcing major plans for retrenchments. Tongaat-Hulett is cutting 5,000 jobs. Massmart is cutting 30 percent of its retail workers. Sibanye-Stillwater is cutting 5,000 jobs in at the platinum mine in Marikana. Alexkor, the diamond company, is cutting jobs. And media companies like Multichoice are cutting 2,000 jobs. There are many, many others. Hundreds of thousands of jobs have been lost over the last few years and many others have had their conditions of employment worsened.

The crisis in the economy is having a devastating impact on living standards. Working-class people are now worse off than they were 10 years ago. Per-capita income in 2018 was the same as in 2014. Real unemployment stands at 10.2 million people. Youth unemployment is the highest in the world. The official unemployment rate has not been below 20 percent for the last 20 years. A whole generation has now grown up with this reality.

No country in the world can sustain such a large number of unemployed people relative to its population without going through a severe social crisis. It is putting enormous strain on workers. Job losses do not only affect workers but have a direct impact on entire towns and regions. For instance, the closure of the steel plant in Saldanha Bay in the Western Cape does not only affect the town, but the whole West Coast region. In addition, it also affects the area around the Sischen mine, 800 kilometres away.

This is having major social consequences. The social impact of the crisis cuts deep. It is enough to mention the scourge of violence against women to understand how deep the crisis goes. Violence against women is a true social sickness. According to statistics, the number of women killed by their partners or spouses is five-times higher than the world average. If the health of any society is measured by how it treats women, children and old people, then South African society is in an extraordinarily bad situation. Again, the root cause of this social crisis is the capitalist system. It is not enough to recount a list of all the social horrors facing society, but to explain the processes which give rise to them.

Capitalism arrived very late to South Africa — after the major imperialist powers had already divided the world amongst them. The introduction of capitalism, and the violent upheaval after the discovery of some of the world’s biggest mineral reserves, has left a festering wound on society. Processes that developed over hundreds of years in Europe were condensed over a very short period of time. With its brutal introduction, the need to sustain capitalist relations tore the social fabric of the native societies to pieces. Centuries-old social traditions and norms were brutally uprooted almost overnight. In order to create free proletarians to work in the mines, millions of peasants were uprooted and flung into the cauldron of capitalist production.

The clearest example of the social impact this has had on society is the migrant labour system. Dispossessed and poverty-stricken peasants from the Eastern Cape are taken to the mines in the Platinum Belt and the Great Gold Reef on the other side of the country. For instance, some of the world’s best rock drillers come from Pondoland in the Eastern Cape and are taken to the North-West Province to work the platinum mines. In the meantime, the areas from which these rock drillers are sourced are deliberately kept underdeveloped to keep down labour costs. This migrant system has, over decades, created the phenomenon whereby workers have two families – one where they work and live, and another where they originate from in the Eastern Cape. So it is clear that, when workers are retrenched, the effect is not only felt in the mining communities, but it has devastating consequences thousands of kilometres away.

This has clear social consequences. The nuclear family in South Africa only really exists among the white population, where 76 percent of children have both parents involved in their upbringing. The family structure for black and coloured people looks very different. More than 55 percent of black children are raised by extended family – typically grandmothers, aunts, but also by cousins. More than 50 percent of these children rely on social grants to survive. The reason for this is the capitalist system, which has torn apart the social fabric of society, uprooted millions of people and disrupted social life. But the same process is also responsible for the explosiveness and volatility in society, and is ultimately responsible for the temperamental nature of the working class.
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