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THE NEW LUNATIC EXPRESS: Lessons not learned from the East African Railway

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THE NEW LUNATIC EXPRESS: Lessons not learned from the East African Railway
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“The limits of tyrants are prescribed by the endurance of those whom they oppress.”
-Frederick Douglass

The building of standard gauge (SGR) railways in both Uganda and Kenya and the predictable sagas that have ensued are reminiscent of the controversies surrounding the building of the Uganda and Rhodesian Railways in the late 19th and early 20th centuries. Both present a framework within which it is possible finally to understand the limited achievements in development in all sectors (and frankly, underdevelopment in many) and regression in Uganda’s primary education, copper mining and agricultural sectors. Both SGR projects are tainted with suspicion of shady procurement which, if taken together with the track records of the implementers, points to corruption. It would be irresponsible to say otherwise.

The route, design, level of service and all other decisions of the Uganda Railway of 1990 were dictated by potential profits for foreign investors (both public and private) and their local agents, and not by notions of public service and the common good of those who would bear the ultimate cost. Return on investment is not a bad thing but the Imperial government also claimed to be acting in the interests of the indigenous populations.

The difference now is that there is no pretence about whether the railways are serving the interests of the general population. The different financial implications presented by the procurement process itself, the selection of routes and the relative cost of engineering in the different terrains, plus the cost of compensating displaced landowners, provide scope for long-running, energy-depleting corruption scandals. From the outset, there has been a lack of confidence that procurement processes for the necessary services would prioritise the interests of the public over the interests of the contractor and would actively exclude the personal interests of the public servants commissioning the works. This is what is triggering the anxiety surrounding the SGRs.

The different financial implications presented by the procurement process itself, the selection of routes and the relative cost of engineering in the different terrains, plus the cost of compensating displaced landowners, provide scope for long-running, energy-depleting corruption scandals.

Moreover, the choice over whether to upgrade the old railway or to start afresh was not adequately debated publicly. Ditto the options on financing. For the Kenyan SGR, the most costly of the potential routes were reportedly selectively chosen. Several cheaper routes on land allegedly already in possession of the government are said to have been rejected.

There are also questions surrounding passenger service. Do the railways only serve trade or are passengers entitled to this alternative to dangerous road transport? In areas where passengers and not commodities, who will be the primary user of the railway?

Uganda owns one half of the old East African Railway. Together with the Kenyan leg, it was put under a 25-year management contract. The new owners renamed their new toy Rift Valley Railways (RVR). In 2017, after only twelve years, the governments cancelled the contracts in a move the RVR called an illegal takeover. On the Ugandan end, there were allegations of asset-stripping by previous European concessionaires as well as unpaid concession fees and massive salary arrears caused by RVR. If RVR were to successfully sue the government for cancellation of the contract, their compensation would be the first budget overrun.

The government of Uganda then signed a Memorandum of Understanding in 2014 with the China Civil Engineering Construction Corporation (CCECC), which had submitted a study. It abandoned those negotiations in favour of a second Chinese entity, the China Harbour Engineering Company. In justifying its action, the government questioned the quality of the CCECC’s study, which it said was cut and pasted from pre-existing feasibility studies (something that could have been avoided by following proper procurement procedures). CCECC insists it was a pre-feasibility study requiring less detail than a full-blown feasibility study. Whatever the case, if CCECC had followed through with its suit for US$8 million in compensation, which would have been another massive blow to the budget at inception. Whatever compensation they have agreed to has not been made public but as matters stand, the budget for the eastern leg of the SGR has gone up from CCECC’s proposed US$4.2 billion to CHEC’s US$6.7 billion.

What stands out – apart from the incompetence, squabbling and eventual compensation claims that accompany nearly every major Ugandan development project – is that the President of the Republic is front and centre in the flouting of procurement procedures by issuing personal invitations to foreign firms and individuals to participate in projects. He has done the same with investors from the United Arab Emirates who have been promised land. The results are often disastrous: the country is in debt to the Kenya-based Bidco company after it fell short of 10,000 hectares of land it had promised the company for a vegetable oil project. As a result, Bidco received tax waivers worth US$3.1 million in 2016 alone, according to the Auditor General.

The last top-level contact with a foreign investor whose details are known resulted in the arrest in New York of Patrick Chi Ping Ho in late 2017 on charges of paying bribes to the Ugandan president and the foreign minister through an American bank. The Ho-Kutesa bribery case casts more shade on the procurement arrangements for the SGR. Without a satisfactory resolution of the matter and with the same people still in situ, citizens would be foolhardy to expect value for money from the SGR.

By the beginning of 2018, owing to cash flow difficulties, less than half of the land required for the 273-kilometre eastern section of the SGR had been acquired. Not surprisingly, as Uganda slithers into insolvency, the government has resorted to domestic and foreign borrowing to fund ordinary recurrent expenditure like payroll. Commodity prices are significantly lower and the shilling worth much less than when the SGR was first contemplated. So bad is the situation that the police force announced that police work in 2018 is to be carried out on a rotational basis among the regions as there are insufficient funds to enforce the law across the whole country at once.

The Uganda Railway, 1900

The Uganda Railway initially ran from Mombasa to the Kenyan side of Lake Victoria, where the journey was completed by steamer to Port Bell in Kampala. The main purpose of the railway was to make Uganda colonisable.

Under the hinterland principle introduced by the Treaty of Berlin of 1885, colonial powers had the first option on the ownership of the hinterland abutting on their coastal possessions. To claim possession of the hinterland, a power had to show that it had effectively occupied the coast.

Having secured the Kenyan coast, Britain was not required to effectively occupy the East African hinterland – Uganda – but was determined to do so, fronting the objective of stopping the slave trade under the Brussels Anti–Slavery Act of 1890, which also required it to “improve the moral and material conditions of existence of the native races”. The argument ran as follows: To stop the slave trade, the region had to be governed by Britain and to govern, soldiers, ammunition, civil servants and their supplies had to be transported to the region, for which a railway was essential.

Only after the annexation of Uganda did references to the slave trade fade out as the overriding objective and the need to grow cotton to feed Britain’s textile industry and reduce unemployment came in to sharper focus.

Having secured the Kenyan coast, Britain was not required to effectively occupy the East African hinterland – Uganda – but was determined to do so, fronting the objective of stopping the slave trade under the Brussels Anti–Slavery Act of 1890, which also required it to “improve the moral and material conditions of existence of the native races”.

There was competition for the hinterland from the western coast of Africa, whose Congolese hinterland Belgium owned. Belgium was interested in north-western Uganda. In the north, the French had had a military confrontation with the British in Fashoda over supremacy in the Sudan. Time was, therefore, of the essence and the proposal was tabled in Parliament without a thorough survey.

We have had a large sum of money voted, but I observe that in recent documents the survey has disappeared and it has become a ‘reconnaissance survey’. We want to know whether we are making an estimate of the cost of a railway upon a reconnaissance survey. Major Macdonald was at the head of that survey, and when he arrived at the mountains he did not survey any further but put upon his survey ‘mountains’, and so there was practically no survey” (Henry Labouchère, MP, Uganda Railway debate, April 1900)

 The expenditure necessary was minimised in presentations to Parliament,

The estimates of cost have been falsified from the very commencement. They began with an estimate of £1,700,000; then it jumped up to £3,000,000, and year after year when the vote for Uganda came on for discussion, we were told that that would not be exceeded. And now the right hon. Gentleman comes here and, pluming himself on having carried out his own estimates, asks us to vote almost two million additional; and he shows us in no sort of way that the last estimate of £5,000,000 is based on solid ground any more than the £3,000,000 estimate, or the £1,700,000 estimate […] We ought not to vote any more money until we have had a full practical businesslike survey. (Labouchère 1900)

Also distorted were facts about the purpose of the railway. The benefit to the British cotton industry, one of the country’s leading employers, was minimised while advantages to the inhabitants of British East Africa were magnified to overshadow any criticisms of the railway’s implementation. One argument was that Britain would eliminate the high cost of the squadron needed as a barrier to slave ships off the East African coast by transporting soldiers overland to quash the last remaining slave caravans.

Labouchère questioned the government in 1900 as to whether the partially complete railway had had any impact on the size of the British squadron. The answer was no, it hadn’t. In fact, as he noted “it has not prevented one single slave being carried away”. Apart from anything else, slavery was tolerated in Zanzibar and Zanzibari slaves were being used as porters by British officials even in 1900.

“Sir G. Portal’s expedition [sent to effectively occupy Buganda] was one which had numerous slaves in its ranks. The whole territory of the East Africa Company now was swarming with slaves. What hypocrisy would be charged against this country, if their real motive being financial greed and territorial aggrandisement, they put forward the sacred cause of slave emancipation, while at the same time their own territories were swarming with slaves, and were actually impressing these poor creatures in large numbers to carry Sir G. Portal himself on this expedition. (Robert Reid, Uganda debate, March 1893).

(This is the same G. Portal who was sent by the Crown to implement the treaty extracted from Kabaka Mwanga and who exceeded its boundaries by marching through Buganda, setting up a fort in the Kingdom of Toro from where the Kingdom of Bunyoro was annexed.)

In the interests of speed and economy, a non-standard gauge was used. This partially explains why in the 21st century Kenya and Uganda are embarking on their first SGRs rather than extending existing lines. Apologists for incompetence should take note: there will be railways but whether they are the most cost-effective, robust (extensible) option is another matter.

In their rush, the Foreign Office formed a Works Committee to build the railway, which wound up costing significantly more per mile than comparable railways in India. It was referred to as a light or small-gauge railway. The cost of two comparable light railways in India was £6,500 and £6,400 per mile, respectively. The Kenya-Uganda light railway was being built in 1900 at £8,500 per mile. (Ugandans may recall that the price tag for the new thirty-mile Kampala-Entebbe Highway was double that of a comparable highway in Ethiopia.)

Railway finance

Contrary to popular belief, railways were not a gift to the colonies; they were financed by loans paid from tax revenues collected by the local colonial administrations and, therefore, any waste and losses in the construction were borne by the taxpayers in the colonies. Even where the Imperial government made the initial expenditure, ultimately it was the citizens of the colonies who paid.

For example, Palestine was charged £1 million for a railway built to facilitate the movement of British troops during the First World War (Palestine and East Africa Loans Act 1926). The retroactive payment was engineered by guaranteeing a loan taken by Palestine the proceeds of which then went to the British treasury while Palestine (then under British administration) made the repayments. For an idea of the magnitude of a million pounds in those days, the exact same amount was provided three years later in total development grants for the entire empire, then numbering over 40 territories.

Contrary to popular belief, railways were not a gift to the colonies; they were financed by loans paid from tax revenues collected by the local colonial administrations and, therefore, any waste and losses in the construction were borne by the taxpayers in the colonies. Even where the Imperial government made the initial expenditure, ultimately it was the citizens of the colonies who paid.

The £1 million provided in 1929 would not have covered Uganda’s total budget for one year. Even without a full set of Protectorate accounts, it is still possible to see that Uganda’s budget balanced at approximately £2 million between 1931 and 1935. In those years there was an excess of assets over liabilities of between £700,000 and £1 million. The Uganda Protectorate was even able to maintain the reserve fund required by the Imperial government. It stood at over £400,000 in the 1930s.

“The Reserve Fund is really required for three purposes: (a) as a kind of insurance against a definite national emergency, such as a famine or locust invasion involving very exceptional expenditure; (b) to meet a possible deficit in case of an exceptional shortfall in revenue; and (c) to enable the normal programme of capital expenditure to be carried out from year to year unimpeded by fluctuations in revenue. It will thus be seen that a considerable sum should be kept available, and it is hoped that it will be possible to accumulate £l,000,000 in the course of time.” (A.E. Forrest, Acting Treasurer, Uganda Protectorate)

 The Imperial Loan, the earliest loan record available to this writer, was made in 1915. It was followed by development loans between 1921 and 1924 and then further loans in 1932 and 1933. Total unused balances on these loans ranged from between £3,300 and £95,727 in the years 1931 to 1935; £588 was paid towards the Kampala-Jinja Railway in 1933. Total loan servicing that year was £144,718 for the 1932 and 1933 loans. The only grant received during the same period was £841. (This is not a typo.)

Although the Imperial development grant budget was increased to £5 million in 1940 to cover an even larger number of colonies, the target could not be reached during the Second World War when funds were low. During the war, the colonies had to divert their resources to aid Britain’s war effort. Uganda and most other colonies each donated £100,000, the equivalent of Uganda’s entire development budget for 1939. Kenya raised approximately £17,000. Men from both countries volunteered to serve; there were 77,000 from Uganda and more from Kenya. (The British government finally sent pensions to Ugandan ex–servicemen in 2011 after a long, increasingly hoarse campaign. Over 2,000 British ex-servicemen and thousands of others were rewarded with land in Kenya and Rhodesia).

The people of Buganda gave an additional £10,000 and the Ankole gave £1,000 from taxes collected from their populations. Additionally, the Buganda Lukiiko and the Native Administrations of the Eastern and Western Provinces pledged to give £5,000, £7,000 and £5,000 a year, respectively, for the duration of the war and for one year after its end towards the expenditure of the Protectorate.

Gifts in kind included an airplane (from Mauritius), patrol boats (Singapore Harbour Authority), cocoa, coffee and foodstuffs of all kinds. Farmers’ savings in the cotton and coffee funds were diverted to feed and clothe Allied troops. Only the Oron tribe in Nigeria was spared – their gift of two hundred pounds was returned on the grounds of their financial standing.

Colonies also made interest-free loans to Britain: in 1940 the Kenya-Uganda Railway and Harbour Administration loaned His Majesty’s Government £100,000 for as long as the war lasted. In 1946, Uganda made an interest-free loan to His Majesty’s government of £650,000. Total loans from the colonies amounted to £1,156,983 (See: Accounts of the Uganda Protectorate, 1946 Statement of Balances, Statement XIV, at 31st December, 1946).

It is incredible that in spite of the evidence, Ugandans and other ex-colonials continue to believe that they are being “helped” first by Britain, then by the World Bank and the Chinese. It is this misreading of the facts that prevents any meaningful negotiations for better terms of development cooperation. It is the capacity to negotiate that today’s bribe-taking leaders sell for their thirty pieces of silver.

Secondly, railways transported cotton belonging to the British Cotton Growing Association (a voluntary body comprising Lancashire growers, mill owners, textile workers, shippers and workers in ancillary trades such as dyers) for free in Sierra Leone, Lagos, and Southern Nigeria in return for seeds and professional advice (Secretary of State for the Colonies, Cotton Supply debate, 1905.) Third, once built, railways were used to leverage further loans. The East African Railways and Harbours Authority, being a viable operation, was used to guarantee loans taken out by the East African High Commission (the colonial administration).

By 1961 Uganda’s indebtedness had soared. The public debt was £16,933,000 and was being reliably serviced. Guarantees of interest alone stood at £58 million and a further £3.5 million for interest on a loan from the World Bank (presumably for Nalubaale Hydro-electric Dam). (See: Statement of Contingent Liabilities of the Protectorate Government as at 30 June 1961, Statement 12)

Construction and labour management

Due to the need to build the railway as quickly as possible, “gigantic errors” were made. An attempt was made to cover up escalating costs by saying that the materials had to be upgraded from wood to steel until an examination of the original plans showed provision had been made for steel from the very beginning. Accounts were submitted late for audit.

We have to pay £2,000,000 extra as the result of putting the work into the hands of men who have no practical experience of the work they have undertaken. I, for one, decidedly protest against the reckless and careless way in which the management of the railway has been conducted up to the present time.” (Thomas Bayley, M.P., 1900)

The management of the labour makes it even clearer that the railway was not for the primary benefit of the inhabitants of the region. Much in the same way as Chinese contractors do in Uganda today, the British shipped in foreign manual labourers to carry out the work; 14,000 of the 16,000 labourers employed were expatriates from India. There was a famine in Kenya shortly after.

We ought in my opinion, instead of importing so many thousands of Indian[s], to have employed a good deal more African labour, because natives have been dying by thousands of starvation in the neighbourhood of this railway. It has been most distressing to see the natives dying in the ditches by the side of the railway, and when trains have gone up the line little starving and dying children have come and begged for food, for a little rice, or anything from those on the train. That is not the sort of thing that ought to occur where the British Government are building a railway, and they ought to have engaged labour to a much larger extent from the neighbourhood. (Robert Perks, M.P., Uganda Railway debate 1900)

Much in the same way as Chinese contractors do in Uganda today, the British shipped in foreign manual labourers to carry out the work; 14,000 of the 16,000 labourers employed were expatriates from India.

Those Africans that were employed were paid four pence a day while the Indian skilled labourers were paid 14 pence a day. (Indians had experience in building the Indian railways.)

“That seems to be pretty nearly the same thing as slave labour. I should like to know what would be said in this country if any man were induced by the Government to work for four pence a day. [Several HON. MEMBERS: Oh, oh!] Hon. Members say oh, oh! I know their views. Working men in England have votes, and working men in Africa have not.” (Labouchère, 1900).

But Labouchère himself gave the standard racist reason for the low wages, a sentiment he expressed in defence of his own arguments that investment in Uganda was a waste of time: “What about the Ugandese themselves? They are without exception the very laziest of that laziest race in the whole world, the African negro.”

John Dillon, the Irish nationalist, demonstrated an understanding of the difference between the then African way of life and the grubbing and jostling necessary in over-populated, capitalist European countries,

“[…] where African labourers were employed the earthworks cost 10d. per cubic yard, while with the Indian labourers at the higher wage they cost but 6d., so that by employing the Indian labourer at higher wages you reduced the cost of the work. […] Very often, particularly in railway work, it is much cheaper to employ a better class of men at higher wages than men who do not understand the work at lower wages.

“One argument is that the labourers being free men, with no rent to pay, and with gardens round their huts, are not compelled to labour for the [low] wages offered by contractors and mine-owners; they can ask their own terms. What settles the price of labour in this country is the fact that a man cannot retire to his garden and his house and wait until the employer must have him at his own price; he would starve; therefore he must make the best terms he can. But in Africa the labourer is comparatively a free man, unless you have forced labour, as is so often advocated. (John Dillon, 1900)

However, it was later revealed that in addition to racialist considerations, there was a profit to be made on importing labour. Greek contractors had been awarded contracts to import the Indian labour and their commissions inflated labour costs. The point was not exhaustively argued in Parliament but there were suggestions that Sir Clement Hill, a public servant, received between £10,000 and 70,000 in commissions on materials ordered.

It was argued in Parliament that the amount of money required for the Uganda Railway was sufficient to build a full network of the light railways required in Britain. If anything speaks to the necessity of transparency it is this. Less extravagant profits assured by the government to private investors, contractors and commission agents would have ensured more was available for the common good of ordinary people in both countries, and a measure of dignity for the workers.

In contrast, before building permanent churches, schools and clinics in Uganda, Catholic missionaries in Uganda established technical schools and other training facilities in order to train the craftsmen that would be required for the work. They took the necessary time to maximise skills transference. They specialised in brick-making, architecture, glass-making and other building crafts, as well as tailoring, teaching and nursing. These facilities are still in service today, run by Africans.

For their part, indigenous communities using their own traditional model for infrastructural development known as bulungi bwa nsi (the good of the nation). They continued to contribute most of the locally available material inputs and, of course, all of the land and labour for community infrastructural development.

The character of development changed when the Imperial government commandeered the education sector in 1921 in order to “re-organise” it. After that, records show, the administration was able to manipulate communities by promising schools and other amenities to those communities that agreed to plant cash crops and do other things required of them. Voluntary communal labour was transformed into compulsory labour and extracted through corporal punishment and the dreaded poll tax.

Contracts for technical assistance these days require hired expatriate consultants to transfer skills to the indigenous staff. However, the fact that certain positions remain “expatriate” positions speaks volumes. These days African labourers on foreign-managed project sites are treated no better than the colonialists treated labourers. Ugandans at foreign-owned building sites have made numerous complaints about underpayment, lack of access to safety gear, harassment, sexual exploitation and even violence. In Uganda and elsewhere, some have been served lunch on their shovels. In the 1990s, Ugandans were made to squat in a line, one man between the legs of another. The reason given was that they kept losing/stealing the plates provided.

Chinese abuse of African workers’ rights, importation of labour, disregard for Ugandan environmental preservation and disdain for the communities among which they work is a repetition of the first invasion of capital and demonstrates the extremes to which it goes when left unfettered.

Route and service politics

The original plan had been for the railway to serve farming areas. Tax revenues from the crops would cover the cost of the construction. Introducing cotton and providing a fast means of exporting it was supposed to lead to development. Once the settlers came to know the route, the influential among them lobbied to have the railway diverted to serve their plantations.

The question of whose interests the SGR serves, as raised by Rasna Warah in a recent article published in the eReview, was as valid in the 1890s as it is today. In Kenya, the lack of “native”-directed development meant that there were insufficient railway stations between Mombasa and Lake Victoria for African requirements. It goes without saying that the interests of indigenous populations were not included in the plan. As a result, indigenous farmers had to carry their cotton long distances to the tracks – often in five shifts of one 60-pound bag at a time – and had to spend one or a few nights along the track, sleeping in the open air while waiting for the train.

Because in the beginning there were insufficient carriages and the few available were segregated, the Africans travelled in wagons. They were locked in for the safety and comfort of the first class travellers. Often, as some members of Westminster’s parliament were scandalised to learn, African passengers were unable to alight on arrival at their intended destinations despite banging on the wagon doors and were carried all the way to the next stop or to the Coast.

It goes without saying that the interests of indigenous populations were not included in the plan. As a result, indigenous farmers had to carry their cotton long distances to the tracks – often in five shifts of one 60-pound bag at a time – and had to spend one or a few nights along the track, sleeping in the open air while waiting for the train.

During the debate of the East Africa Commission Report in 1925, Henry Snell articulated the role of capital in distorting the higher development goals of bringing development to Africa,

“The land through which these railways pass [belonging to Settlers] should be taxed to help bear the cost that is involved. In the matter of transport it has been the case, unfortunately, that the Europeans have acquired the idea that railways should be built solely for their benefit, and that money granted as loans or in any other form should be entirely devoted to the white races. If by any chance a railway passes through native reserves, the cry is immediately raised that the land contiguous to the railway is too good for native use, and the native is therefore driven away, or it is urged that he should be removed to some less accessible position. It was on such a plea as that the Maasai were robbed of their country, and plots of land varying from 5,000 to 300,000 acres were given to Europeans for no other reason than that they were covetous of it and that it was in close touch with the railways.

“These extra facilities for transport can only be justified if at the same time the native interests are completely safeguarded. At the present time the difficulties are immense. The native has to raise from 10s. to 16s. per annum for hut tax, and he has to pay this almost entirely out of the material he is able to sell. That involves him in carrying a load of 60 lbs. for 40 miles. To pay this tax he may have to go as many as five journeys of 40 miles, with the 60 lb. load on his head, making for the return journey a distance of 400 miles. That is economic slavery of a most indefensible kind, and of a kind worse than was ever known in the Southern States of America. The roads are very frequently impassable because of bad weather.” (Henry Snell, M.P. East Africa Commission Debate, 1925)

Land grabbing and the Rhodesian Railway

Planning, finance, procurement, labour – what more could go wrong? Answer: speculation. The major and most lucrative railway scam was the use of the railway as a vehicle for displacement of populations and acquisition of their land by speculators. The land was acquired by those who had already been given free or cheap land by the Imperial government and were in a position to leave it idle.

“One syndicate got 500 square miles from the Foreign Office, over the head of the then Governor of Kenya. That is a fairly extensive slice of territory to be handed away. Then there was a grazing land syndicate, called the East African Syndicate, which applied for 320,000 acres, and Lord Delamere, a notorious figure in these parts, applied for 100,000 acres. If one syndicate gets 500 square miles, another gets 320,000 acres, and another applies for 100,000 acres, there is some prima facie evidence of speculators in Kenya.” (Thomas Johnston, Kenya debate, December 1926.)

In Rhodesia, as in Kenya, this resulted in large tracts of land being bought on either side of the proposed track by investors. In both territories the value shot up exponentially as the railway approached. Once the route for the Rhodesian railway was set out, a strip measuring twelve miles wide was carved out alongside taking in parts of Native Reserves. Meanwhile, the Msoro tribe of over 2,000 was displaced in favour of three settlers.

By 1920, Rhodesians had already been corralled in Native Reserves. The 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the “right” to reside in (but not own any part of) reserves measuring 8 million acres. Most of the rest of the territory still belonged to the British South African Chartered Company (BSAC) that had deposed both the Mashona and Matabele kings and seized their territory.

After 1919, the British South African Company transferred what was left over from sales of this territory to the British Crown in return for a much disputed bail-out. The bail-out was controversial because under its agreement with the Crown, the BSAC was allowed to reimburse itself for work it did on behalf of the Crown by engaging in business. The Company had earned an income from the sale of millions of acres of land and mining concessions and had exported ivory and minerals, all under the protection of the British flag and therefore the British military. This was supposed to be their “compensation”. However, breaking the rules of the charter, the Company inter-mingled its own private accounts with those of the administration of the colony, making it difficult to separate the cost of government work and BSAC business. Just as with the British East African Company when it was leaving the area, the BSAC was further “compensated” with taxpayers’ money.

By 1920, Rhodesians had already been corralled in Native Reserves. The 48,000 white settlers had been allocated 48 million acres while the 800,000 Africans had the “right” to reside in (but not own any part of) reserves measuring 8 million acres. Most of the rest of the territory still belonged to the British South African Chartered Company (BSAC) that had deposed both the Mashona and Matabele kings and seized their territory.

During the controversy, a secret agreement between the BSAC and the British government came to light under which the government had agreed to reimburse the BSAC if it deposed King Lobengula. BSAC recruited European settlers, promising each a lease of a 6,000-acre farm at 30 shillings a year. They were also offered the option of buying the farm outright at the cost of 3 pounds sterling per 20 acres or 900 pounds for 6,000 acres.

After the successful campaign, the British government paid the lease and purchase costs for the recruits. Those not wishing to purchase were reimbursed for improvements they had made on the properties. In total, £7 million was demanded, half for the recruits and half for the shareholders. All opposition in Parliament was silenced by the Colonial Secretary, public eugenicist Lord Amery, when he revealed that a Commission of Inquiry had exonerated the BSAC and its recruits of any wrong-doing in massacring the Matabele and deposing their King. They eventually settled for £4 million pounds in 1922, a sum roughly equivalent to the Colonial Office’s budget for four years.

The need for public oversight

In his essay “Mexico proved that debt can be repudiated”, published on 24 March 2017, Eric Toussaint devotes a section on showing the links between commodity extraction, railways for transporting the commodities, and loans required to finance the extraction and transport of the commodities. He demonstrates the impact these had on land ownership, the displacement of peoples, the national debt, and a clique of investors.

It is interesting to note that in South America, as on the African continent, railways did not serve to connect communities and countries but rather led straight from the point of extraction of commodities to the point of export. The entire operation was eventually paid for from the indigenous public purse.

Like chartered companies, 21st century local agents for foreign investors enjoy political and military protection by the foreign countries they serve. This phenomenon was most evident in Mexico where various debt repudiations resulted in military invasions and threats of invasion by the United States, Britain and France. Most interestingly, Mexican citizens who had lent to their government were granted European nationality after which their new countries included them among those whose rights were being defended by the invasions. They came to be known as vende patrias – sellers of their country. Then, as now, bail-outs came from taxpayers’ money.

In modern times, attempts to repudiate illegitimate debt or to choose other paths that do not profit financiers still lead to regime change. Today they take the form of grants and NGO funding, which attempt to fill the holes left by diversion of national resources. What a bail-out means is that when an investor makes a profit, it all belongs to the investor. Where s/he makes a loss, it is spread among taxpayers. As Noam Chomsky famously stated, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”

What a bail-out means is that when an investor makes a profit, it all belongs to the investor. Where s/he makes a loss, it is spread among taxpayers. As Noam Chomsky said, “A basic principle of modern state capitalism is that cost and risk are socialised, while profit is privatised.”

There can be no real progress until a critical mass of the electorate makes the connection between foreign capital, its local agents and underdevelopment. As Frederick Douglass put it, “If there is no struggle there is no progress[.…] Power concedes nothing without a demand. It never did and it never will.”

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Mary Serumaga is a Ugandan essayist, graduated in Law from King's College, London, and attained an Msc in Intelligent Management Systems from the Southbank. Her work in civil service reform in East Africa lead to an interest in the nature of public service in Africa and the political influences under which it is delivered.

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John Magufuli: The Death of a Denier-in-Chief
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Tanzania, a country that produced Julius Nyerere, is a country tottering on the precipice of a pandemic catastrophe. The philosopher-president ruled for 23 years and put the nation on the international map as a frontline state that stood up to Apartheid South Africa and helped liberate modern Uganda by ridding it of Idi Amin.

With the abrupt death of its populist president John Magufuli on March 17, 2021, ostensibly from a COVID-19 related ailment, Tanzania finds itself at a crossroads, insofar as tackling the devasting disease is concerned. Magufuli who was the commander-in-chief of the armed forces, became the denier-in-chief of COVID-19. The disease has decimated scores of Tanzanians, including top government officials.

Magufuli was hailed as a tough anti-corruption crusader, as he entered state house in 2015. Ordinary Tanzanians initially saw him as their saviour in the fight against institutionalised state corruption. The international media also saw him as a man keen on tackling state corruption, “but Magufuli was all about optics,” said a Tanzanian journalist. “He wasn’t fighting state corruption pers se, what he was doing was to get rid of Jakaya Kikwete’s (immediate former president) networks in the government and replace with his own. So, it was just a matter of time before Tanzanians and the world realised Magufuli was just interested in musical chairs.”

Magufuli was re-elected on October 28, 2020 in one of the most controversial post-Nyerere’s Tanzania elections with a whopping 84 percent. His “true colours” revealed themselves after Benjamin Mkapa’s death in July 2020. After mourning the ex-president, Magufuli turned his attention to the business of crippling the opposition.

Magufuli was a protégé of Mkapa who served as president between 1995–2005. It was Mkapa, who in 2015, prevailed on the ruling Chama Cha Mapinduzi (CCM, ‘Party of the Revolution’) national executive council (NEC) to pick newcomer Magufuli as its flagbearer for what was to be a hotly contested general election in October 2015. Magufuli was then primed to run against Edward Lowassa, a CCM stalwart, who had bolted to Chama Cha Democrasia na Maendeleo (CHADEMA), after not clinching the CCM ticket, in which he was touted as one of the hot favourites.

The “true colours” was the ruthlessness with which Magufuli pursued the opposition in the lead-up to the presidential elections. That massive victory came in the backdrop of President Magufuli’s continuous campaigns since being inaugurated as the fifth president in 2015. “Magufuli never stopped campaigning,” said a Tanzanian journalist: “He rode on the wave of populism – dishing out money and favours to select supporters and well-choreographed individuals wherever he went.”

The 2020 Magufuli campaigns were a mirror-image of his mentor’s similar campaigns in 2000. Just like Mkapa’s mission was to presumably pulverize the nascent opposition, Magufuli’s mission 20 years later was similarly to ensure that the “irritating” opposition is no more and is, literary ran out of town. Mkapa in the October 2000 elections unleashed so much violence on the opposition that many of its supporters sought exile in neighbouring Kenya, after the elections.

Mkapa’s use of unmitigated force by Jeshi la Polisi (Tanzania has a police force, as opposed to a police service) and Field Force Unit (FFU), a paramilitary outfit much like Kenya’s dreaded General Service Unit (GSU) was unprecedented in Tanzanian politics. Just like Magufuli, it seems Mkapa’s “true colours” were revealed only after his mentor’s death the previous year on October 14, 1999. Mkapa was a protégé of the founding father Julius Kambarage Nyerere.

It was Nyerere who held Mkapa’s hand in 1995, after influencing his nomination by CCM, and single-handedly campaigned for him throughout the country. Tanzania held its first multiparty general elections in 1995, pitting CCM against a disparate opposition for the first time since its formation in 1977.

He dished out money and favours to select supporters.

Revisiting this unparalleled violence orchestrated on fellow Tanzanians, Mkapa, the former journalist-turned-diplomat-turned-president in his memoirs: My Life, My Purpose – A Tanzanian President Remembers published in January 2019, regretted the 2000 election ordeal. To some Tanzanian journalists and political analysts, Mkapa and Magufuli are today referred to as the chief advocates and perpetrators of state violence in post-independent Tanzania.

Both the presidential elections of 2000 and 2020 happened under a cloud of America’s own election problems: In 2000, it was the “Florida fiasco.” Florida was then governed by the Republican’s presidential candidate, George Bush’s brother, Jeb Bush. Bush was running against the Democratic Party’s Al Gore. Jeb was allegedly accused of rigging on behalf of his elder brother.

Like the Americans say, the electoral college vote was too close to call: the vote was not only going to determine who was going to be the winner of the states’s 25 votes, but the next president after Bill Clinton. A recount was called by the Democrats and for a brief moment, the democrats believed they had taken it, only for the Republicans to also ask for their own recount. Bush won with a razor thin win vote. The democrats were not persuaded. To cut a long story short, the sunshine state’s case found itself in the supreme court, where the republican-led court declared George Bush the eventual winner.

In 2020, with both the Tanzania and US elections being held days apart, America once again came under the world spotlight after the “Pennsylvania problem”, in which President Donald Trump claimed his votes had been tampered with and paid for a recount. The MAGA Republican Party candidate was defending his seat against “sleepy Joe” a derogatory tag given by Trump to Joe Biden.

The citing of both examples here is to emphasise that America in 2000 and 2020 could not claim a moral compass to the Tanzania government’s excesses in its elections. Covering the 2000 elections, I remember in Dar es Salaam, a CCM top official telling us journalists that America could not lecture Tanzania on matters election – “they should first deal with their own election rigging in Florida, before accusing us of unleashing violence and rigging the islands’ results.”

Nyerere had always been opposed to the twin islands of Pemba and Zanzibar’s divorce with the mainland Tanganyika – a sticking sore thump between the mainland and the islands, since the republic turned to plural politics. But he never advocated state violence, instead, he sued for dialogue and persuasion.

Magufuli was determined to put the opposition in its place this time round: In a parliament of 261 members, the opposition only won seven. “By the time I’m through with Tanzania, there’ll be no opposition in the country,” said the deceased in one of his campaign rallies.

There is not a doubt that he loathed the opposition, so much so that he warned the regional commissioners and election officials, “I don’t pay you so that you can allow opposition to win.” Tume la Uchaguzi (National Election Commission) flatly refused any presidential debates and told the opposition it could debate among itself if it so wished.

In Tanzania, CCM ni tasisi,” a local journalist reiterated to me. Literary it means the ruling party CCM is an institution. Figuratively it means, CCM is Tanzania and Tanzania is CCM. Anybody going against the “wishes of the party” would be crushed. The CCM’s propaganda machinery against the leading opposition figure Tundu Lissu of CHADEMA was geared to pulverize all his efforts of running a successful campaign. “He was being hunted down like a wild animal,” said the journalist.

Magufuli claimed Lissu was a supporter of LGBTQ and that he was a tool of the West being used to campaign for mashoga, homosexuals’ rights. Several African presidents during their re-election campaigns have turned the hot-button issue of LGBTQ, their favourite bogeyman: In the terribly conservative African societies, nothing evokes emotions of antipathy like suggesting gay-ism could be mainstreamed. Yoweri Museveni has done it, John Magufuli did it, just like Robert Mugabe did it before him.

CCM being Tanzania and Tanzania being CCM, not even the bravest of private media would dare report on the opposition or against Magufuli and CCM. “There was total blackout on the opposition by the media. All what Tanzanians could read and listen to, on politics, was on the ‘indefatigable Magu’ and his infrastructural developments,” said my Tanzanian journalist friend. Hence, Tanzania media did not report on politics – it reported on Magufuli, the person.

By the time I’m through with Tanzania, there’ll be no opposition in the country

Being heavy users of social media, Tanzanians turned to VPN – virtual private network. Found as an app in many smart phones, it protects one’s communication from snoopers like government agencies and hackers. What VPN does when activated is to bypass the conventional internet service providers (ISP) when connecting to the internet. In the case of Tanzania’s government shutting down its ISP, tech savvy Tanzanians resorted to VPN to access facebook and especially Twitter, to fend off the states’s eavesdropping.

This is the reason why Magufuli ordered all social media outlets shut, said the journalist. All what the Tanzania Communication Authority needed was a nod from Magufuli. A consumer of foreign news outlets, Tanzanians also resorted to BBC, Deutsche Welle (Sauti ya Ujerumani) and VOA, to stay informed on their country’s politics. “This is how many of them were informed and kept tabs on Lissu’s campaigns,” said the journalist.

Even after being sworn-in for the second term, President Magufuli pursued the browbeaten opposition. Chief opposition figure Lissu had to escape the country a second time. “Run or be run over, these people are not joking,” Lissu was ostensibly warned by his intelligence team. In September 2017, Lissu had survived an assassination attempt in Dodoma, that saw his vehicle sprayed with bullets by “unknown” assailants, as he left parliament for his house for lunch. On November 7, 10 days after the elections were over, he hid at the German embassy, then onwards to Brussels, where he had been recuperating for three years after treatment in Nairobi.

The former MP for Arusha Urban Godbless Lema also skipped the country and sought refuge in Kenya after claiming government people were after him. Lema, with his family was granted asylum in Canada.

Nyerere’s CCM may have operated in the one-party era during the cold war, but many Tanzanians of the post-independent generation remember those days with nostalgia. “The party was more democratic and free, unlike today,” said a former CCM mkereketwa (party diehard).

Magufuli’s populism was laced with autocratic tendencies. He told fellow Tanzanians msinijaribu mimi ni jiwe (don’t try me, I’m as tough as a rock), meaning he prided himself in being tough-headed.

“Magufuli’s CCM in the era of multiparty brooks no dissent, is dictatorial and dangerous, while Nyerere’s CCM preferred a palaver type of democracy where party issues were discussed until it arrived at a consensus,” said a University of Dar es Salaam don.

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South Africa: A New Politics From the Left?

Assuming today’s socioeconomic crisis benefits the Left is folly. That will only happen if we have the political vision to make class the fault line of social polarisation, and for that we need to face the challenge of constructing a new party.

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South Africa: A New Politics From the Left?
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Over the last decade, the Left in a number of Western countries has undergone a historic transition from “protest to politics,” to borrow the words of the late Canadian Marxist Leo Panitch and his frequent co-author Sam Gindin. From Podemos in Spain to Sanders in the United States, a new wave of parties and electoral coalitions have emerged and made rapid gains. Despite setbacks and defeats, Panitch and Gindin’s indispensable analysis of these events in The Socialist Challenge Today, casts them in an unambiguously positive light. None of the examples they study offer formulas for resolving the vexing dilemmas facing the socialist movement in our globalised present.

But in their determination to take state power seriously they constitute an unmistakable step forward, after decades in which the Left’s confinement to episodic instances of mobilisation left the electoral field wide open to the parties of business. Part of this “new new” Left’s success stems from a willingness to shake free of its own past. Building a viable socialism of the 21st century, they argue, requires dispensing with the outmoded parts of the Leninist model, like its wager on insurrection, while retaining that which still holds value, like its internationalist spirit.

These developments hold important lessons for us on the South African Left. Just under a decade ago it seemed that we were on the verge of effecting a similar transition “from protest to politics.” During the first decade and a half of democracy, a socialist opposition had found a locus in the so-called “new” social movements—like the Anti-Privatisation Forum—which grew in reaction to various parts of the ruling African National Congress’ neoliberal agenda.

These waged a number of important defensive struggles and scored a few key victories but fundamentally did nothing to loosen capital’s grip on policymaking. By the end of the 2000s most were a spent force. It became clear to a growing segment of the Left that lasting gains would not be achieved unless social agitation were more effectively linked with efforts to seise governing power. The ability to think these more ambitious terms received a major boost when the National Union of Metalworkers South Africa (NUMSA), the nation’s largest manufacturing union, appeared to redraw the political map of the country by breaking from the ANC, amidst a wave of working class militancy.

Of course for the “official” left which NUMSA represented there had never been any turn away from politics as such. But decades of compromise had bred a form of politics that had become completely unmoored from the guiding thread of class antagonism. NUMSA’s move thus constituted a kind of mirror image transition—from a back-room corporatism to a politics more grounded in the methods and spirit of “protest”. This is what imbued the “NUMSA moment” with such hope—it promised to re-connect the two sides of South Africa’s bifurcated Left, and supply the strategic elements that had been missing from each. By matching the militancy and class-independence of the social movement Left with structural and organisational might of the “official” Left, it seemed possible that a mass socialist movement could be rapidly brought into being.

That was not to be. From today’s vantage it’s impossible to regard the NUMSA moment as anything but an abject failure. The political party which eventually issued from it is the farthest cry from the unifying force that so many had hoped for. While the international left has been able to advance by breaking with its shibboleths, the Socialist Revolutionary Workers Party (SRWP) has fallen back on a slavish appropriation of Bolshevik ideology, almost comical in its extremes.

Despite enormous resources, a large part supplied by a US-based billionaire, the party ran a dismal general election campaign in 2019 where it failed to get even a tenth of NUMSA’s own membership to vote for it (it ultimately only amassed 25 000 votes nationally, below the threshold to obtain one seat in Parliament). It’s since never recovered, joining a host of other failed socialist parties on the margins of political life. Marginality seems in turn to have degraded the internal culture of the party, which now resembles closely the Stalinism of the ANC-aligned South African Communist Party in all its worst aspects.

The floundering of the NUMSA moment is a terrible blow. But the setback inflicted on us will far greater if we fail to draw the correct lessons from it. Perhaps the most worrying outcome is that it precipitates a slide back into movementism, and shuts the window that we’ve had to execute the transition from “protest to politics.” Party politics acquired a bad name during the era of “protest” in South Africa, and many on the Left already feel that the SRWP’s example vindicated their worst suspicions.

But what the SRWP actually reveals to us is are not flaws inherent in the party-form as such, so much as the limits of a certain kind of party, one founded on a hidebound Leninism. If the Left were to abandon party building altogether there would, quite simply, be no socialist future. All visions of radical change that eschew parties and an active takeover of the state suffer from a principal defect in that they misconceive the nature of class formation—the process by which individuals become aware of their class position and begin to articulate their politics through it. This is presented as a quasi-automatic effect of the capitalist class structure.

But history offers no support for such a view. Class is impactful because it frames the options we have over so many major decisions in our lives—but not so narrowly as to make resistance to one’s employer, or the system behind him, inevitable. Indeed, the extreme vulnerability of workers under capitalism means that individualised modes of coping tend to be more commonplace than collective action. That’s why socialist consciousness has been the exception rather than the norm in the global history of capitalism, and exceedingly rare in the absence of a well-organised party. As Panitch argued with the force of a life’s work—parties make classes as much as they are made by them.

Thankfully, an outright repudiation of the party-form is not really where we are at in South Africa. The variant of movementism which took hold here, and which has revived in the aftermath of the NUMSA moment, was not really this more extreme kind, which denies the ultimate need for a party. Rather what it advocates is a downgrading of the role of party building or its deferral to some indefinite future.

What seems to be the common premise for this position is that party building can only succeed when perfectly timed to the right “objective conditions” —conditions which are only likely to form in the wake of a rupture moment defined by intensified street-level mobilisation. Only the transformation of mass consciousness brought about by such an episode of struggle can furnish the base for a party. Moreover, efforts to “impose” a party on the working class before this are liable to be rejected by its most conscious and active layers. Cut off from nourishing energy of grassroots movements, they are likely to grow in authoritarian directions. The task of socialists in the present, therefore, is devote ourselves to strengthening movements, and hope that a party may gestate from within them in some future context.

Related but distinguishable from this, is an ingrained hostility on the South African Left towards electoral politics. This view tends to draw a sharp line between the electoral arena and movements. While movements unlock popular power by sensitising their participants to their potential for collective action, elections offer no such platform for consciousness-raising. Instead, they tend to reproduce the atomisation of liberal democracy, and to fortify the myth that progress is possible within it. Moreover, movements which take the electoral road subject themselves to debilitating pressures. The logic of getting the vote tends to conflict with the logic of grassroot mobilisation, and all too often to overwhelm it.

Movementist positions contain many insights. It is wise, for example, to be attuned to the importance of ruptural breaks—the likelihood that we will ever get to a mass party simply through a molecular accretion of our ranks is slim. But the contention that movement building alone is the best way to prepare for such a rupture fails to take seriously the inherent weaknesses of social movements.

Of the numerous movements which sustained the first era of “protest” in post-Apartheid South Africa virtually none remain (barring one major exception). New ones have of course cropped up, and a tide of less organised community protests has continued unabated across the country. But these show equally little likelihood of autonomously cohering into anything bigger or more resilient.

It’s now very hard to avoid the conclusion that their failures resulted from internal rather than external factors. The model underpinning them rested on localised mobilisation around immediate demands, while actively eschewing efforts to politicise a leadership layer. Some of their more excitable proponents portrayed them as crucibles of anti-capitalism, in which the mere experience of collective decision making offered a form of political education beyond what traditional forms of Left organisation could hope to match.

But in doing so they exhibited the same fallacious thinking about class formation that informs all ventures aimed at “changing the world without taking power.” Much less a break with capitalism, it’s not clear that social movements even succeeded in getting most of their members to question their loyalty to the ANC. That left them prone to demobilisation and disorganisation when circumstances changed, when defeats where incurred or when key individuals drifted off or were co-opted.

One strategic upshot of this critique is that the trade-off between movement and party building posited by movementists is a false one. It’s likely that there is no winning formula for transforming single issue mobilisations into lasting, mass organisations without NGOifying them. But what we can do is to ensure that the small advances made by movements each time they arise are not dissipated. After all—the notion that struggle develops consciousness is not a false, what movementists get wrong is overstating the extent to which it does so organically. Virtually every movement throws up militant leaders, who stand to become tribunes for socialist politics if they can be identified, recruited and supported appropriately. This is work that a party is best suited to undertake.

But facing up to the limits of social movements should lead us to even stronger conclusions than this. It should lead us to question the overwhelming strategic significance that they have been accorded in the politics of the “independent left.” If movements are tough to sustain and to politicise, they may not be the vehicles best suited to bringing about a political rupture or ensuring that it outcome favors the Left.

Of course this was a strategic orientation that was largely foisted on us by circumstance. The stranglehold that the Tripartite Alliance (whose third member is the Congress of South African Trade Unions) exercised on organised labour and mass politics generally left little room for an alternative. But the situation has changed. The factionalisation of the ANC, the split in COSATU and the emergence of its rival, the South African Federation of Trade Unions, have created an opening for a more militant socialism to regain a foothold in organised labour. This ought to be the clear priority of socialists.

For all its infirmities, the union movement still presents a much more promising site for grounding socialist politics in a mass base. Although this may not hold for much longer, unions remain mass membership organisations with considerable resources. Most importantly, and most differently from social movements, they have access to structural power (i.e, the power to withdraw labour and shut down the economy). Here is one insight of Leninism which time has not invalidated– that our project will most likely fail unless that structural power is at its center.

If organised labour is once again to become our strategic focal point, this strengthens the case for not consigning the party to an intangible future. The synergies between party-building and organisation building are arguably stronger in the case of unions than social movements. At a fairly abstract level, one reason for this is that union building (or revitalisation) typically relies on a few individuals being prepared to take bold action out of moral conviction. Marxists have often argued something very different—that shopfloors collectivise as soon as workers wake up to their material interests. But narrow self-interest is unlikely to ever motivate someone to take the first steps towards organising their co-workers, since doing so incurs enormous risks but yields no extra benefit—the essence of the “free-rider” problem.

Thus, it’s not a coincidence that so often in history, socialists of various stripes have been significantly overrepresented among the “militant minority.” The values that draw people to the banner of socialism are often the same as those that move them to action against workplace injustices. It’s also not a coincidence that a militant minority is more likely to take shape when socialist ideas are more prominent in the public realm.

Arresting the decline of South African unions, and returning them to their proud history of worker control and grassroots democracy will require a herculean organising effort. At the simplest level this is why we need an organisational vehicle that at  least broadly resembles a party. Without one we have no real means of translating strategic debates into action—of coordinating our energies towards the tasks most likely to yield long-term gains.

There’s therefore a case for not delaying in building a fighting organisation, that tries to cohere leading militants from workplace and community struggles around a socialist program. But such an organisation should do more. As soon as it has the numbers needed, it should seek to involve itself in elections. In all likelihood it would have to start at the local level, and logic would dictate that it seeks out community and social movement partners in doing so. But as quickly as possible is should seek to graduate to the national stage. South Africa’s unusually proportional representation electoral system (which was in fact designed to provide space for smaller parties), makes this a reasonable short-term goal.

Arresting the decline of South African unions, and returning them to their proud history of worker control and grassroots democracy will require a herculean organising effort. At the simplest level this is why we need an organisational vehicle that at least broadly resembles a party.

The first thing that sceptics of this strategy tend to get wrong is that they overstate, or misunderstand, the legitimacy problem facing formal political institutions. The SRWP seems to think that any worker with lingering attachments to electoral politics is suffering from “false consciousness.” But in our current circumstances, there is nothing the least bit irrational about remaining invested in the electoral arena, even while recognising the severity of its class bias. The simple reason for that, is that there is no existing social force capable of challenging state power while remaining entirely outside its institutions, nor does one show any prospect of coming into being in any foreseeable horison. Worker organisations in SA are locked a desperate defensive struggle—not preparing to set up a parallel state.

It’s not a failure of dialectical imagination that causes people to conflate politics with elections, but an appraisal of our situation that is more accurate than the one provided by the apostles of imminent revolution.

It’s thus not surprising that despite the tremendous alienation produced by decades of neoliberalism, electoral movements in the West have been able to engineer a political realignment that was much deeper than what post-2008 movements were able to achieve on their own. Their location within the domain of mainstream politics provided both visibility but also a kind of credibility—they promised to take over the institutions in front of us, rather than replace them with ones we can’t see and can’t yet imagine. Several of these examples stood the movementist model on its head. Rather than an electoral breakthrough growing out of a period of intensified movement activity, it was the electoral arena itself that has delivered the rupture moment, the energy from which can then be filtered down to social and labour struggles.

In the process they challenged another fallacy of movementism—that the electoral arena is entirely inimical to a politics of struggle. Sanders, Corbyn, and others imbued their campaigns with a spirit of insurgency that succeeded in appealing to many otherwise turned off by politics, particularly among younger generations. Rather than sucking energy from the streets, these examples provided a renewed model of “class struggle elections” —not their own invention but one that had faded from the Left’s repertoire during the era of movementism.

Class struggle elections seek to deliberately leverage electoral campaigns, and political office itself, to bolster movements. They use every platform available to raise awareness of, and encourage solidarity with, labour and social struggles. In doing so they try to inculcate the understanding that radical policies can only be won with an inside-outside strategy, in which legislators are supported and pushed forward by powerful movements. At the same time they use campaigns as tools of organisation building.

They recruit and deploy a mass of activist to spread a socialist message, and simultaneously try to develop those activists by building political education into their activities. Done properly, this can bridge the gaps that supposedly separate movement from electoral organising, infusing the latter with a powerful sense of collectivity. That’s why so many thousands of young Americans (to pick a recent example), were politically activated through their involvement in the Sanders campaign, which became a gateway to organising in their workplaces, campuses and communities.

Note that this is completely different to the SRWP’s narrowly propagandistic approach to elections which didn’t promote social struggles so much as fantasies of revolution, whilst denouncing ‘bourgeois democracy’ as a sham and doing nothing to actually win. After a predictably disastrous outcome, the party chose to compound the embarrassment, and feed into a profoundly dangerous trend by denouncing South Africa’s independent election management body and claiming the result was rigged.

It’s not a failure of dialectical imagination that causes people to conflate politics with elections, but an appraisal of our situation that is more accurate than the one provided by the apostles of imminent revolution.

Contrast its subsequent marginalisation with the early trajectory with the Economic Freedom Fighters (now South Africa’s third-largest party), which leveraged the electoral know-how of its ex-ANCYL cadre and Malema’s media savvy to run an enormously successful first campaign. It then built on the success, steadily expanding its vote share each cycle, while using parliamentary office to bolster its national profile. Sadly it drifted off the orbit of the Left along the way. But the two diverging cases provide an obvious lesson: if elections are to be useful to us, we have to show that we are capable of succeeding in them. If we can’t, how on earth will we convince anyone that we’re capable of transforming society from its roots up?

None of this is to suggest that the concerns movementists raise about electoral politics are meritless. Its unquestionably true that electoral competition imposes its own logic, which can be ruinous if it totally subsumes the party’s strategic purview. We can trace the decline of many a worker’s party, at least proximately, to misguided efforts to capture middle-class votes by abandoning a politics of class antagonism. But all socialist strategising in our dismal conjuncture is the consideration of perilous alternatives. Far better for us to confront the dangers of succumbing to a narrow electoralism than the near certitude of permanent marginalisation should we choose to abstain from mainstream politics altogether.

The NUMSA moment may have come and gone. But the many elements of the broader conjuncture which produced it, and which seemed to augur a new direction for socialist politics, persist. The Alliance coalition is in the doldrums. Expecting its inevitable demise is of course a pastime of which we “independent leftists” should now be wary. But the material facts this time really are different. The state faces a fiscal crisis that President Cyril Ramaphosa has neither the wherewithal nor the institutional tools to escape from. His factional opponents preach a “radical economic transformation” that offers nothing whatsoever to workers.

Social strains look set to keep accumulating. But assuming that any crisis they produce will automatically redound to the Left’s benefit would be folly. That will only happen if we have the political vision and the organisational capacity to ensure that class becomes the fault line of social polarisation. And for that we need to face up to the challenge of constructing a new party.

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Is a Plutocratic America in Terminal Decline?

We may not be aware of it yet, because of the hold the nation has on global media, but America’s decline appears to be terminal.

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Is a Plutocratic America in Terminal Decline?
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As President Joe Biden begins to get comfortable in the White House, there are those who might say that America, under a democratic system of government, has once again allowed the voice of her people to be heard, and that they have elected a new leader into office. Some might go so far as to say that the world’s most affluent democracy has once again proved that government of the people, by the people, for the people is alive and well.

But just below the surface, there are questions deserving of a deeper examination. One is how narrow the margins of victory were. For while it is true that President Biden won the highest number of votes in American electoral history, it is also true that President Trump won the second-highest number of votes in American electoral history; 10 million more people voted for President Trump in 2020 than did so in 2016. Mr Biden’s margin of victory in Georgia was 0.48 per cent, while that in Arizona was 0.63 per cent. Further, even as the Democrats belatedly won a majority in the Senate, again by the finest of margins, the Democratic majority in the House of Representatives actually narrowed. Why, if the choice was so clear, were margins so narrow?

The regrettable truth is that the US is not a democracy – not merely because true democracy has never existed, but because even that imperfect form of democracy that characterises modern politics long perished in America. The United States today is in fact a corporatocracy; mega-corporations rule the country, a polite way of saying that that nation is now a plutocracy. This development is not really new – wealth has always, eventually, determined leadership, in America and elsewhere.

This article attempts – colossally log-in-eye, and at a distance of thousands of miles, admittedly – to furnish proof of the existence of this plutocracy; to demonstrate the effects of this plutocracy on American life and politics; and to establish whether there is any way out of the present morass.

That America is a plutocracy

A total of US$14 billion (KSh1.4 trillion) was spent on campaigns in the US this year, twice as much as in 2016. Where is this money coming from?

In 2010, the US Supreme Court handed down a decision called Citizens United that allowed unions, corporations and associations to spend unlimited amounts in elections provided they would not coordinate their efforts with a candidate. As a result, political action committees (or PACs – private organisations established to raise money in support of a candidate or an issue) morphed into Super PACs that could receive unlimited amounts of money for campaign purposes. The effect was immediate: in 2012 non-party outside spending tripled 2008’s total and topped US$1 billion for the first time. Of that amount, Super PACs spent more than US$840 million.

The regrettable truth is that the US is not a democracy.

Yet the amounts spent in 2012 pale in comparison with spending during the 2020 campaign; in October 2020 alone, outside spending by super PACs and other big-money groups totalled nearly US$1.2 billion. President Joe Biden alone raised US$1.6 billion. President Trump raised US$596 million, itself a significant haul. Given the closely fought nature of the presidential election, it would not be wrong to conclude that money helped tip the scales in favour of the new president. Nor was this true only of the presidential race; it was true across the ballot. Eighty-nine per cent of House races and 71 per cent of Senate races were won by the better financed candidate. The conclusion is clear: money – corporate money – wins American elections.

The effects of the plutocracy on American life

It is all very well and good to conclude that corporate money runs and wins American elections. The issue is what the effect of all this money is on American life. If corporate hegemony is harmless – even beneficial – arguments can be made that it should be left alone. If it is not, however, then that fact should be exposed, and reform commenced.

The American mega-corporation has achieved a number of victories (from a corporate standpoint) that have constituted assaults on the wellbeing of the American people and populace. For example, these corporations have been allowed to outsource American manufacturing jobs to China and other nations. The iPhone, signature product of America’s second largest company by market valuation (Apple), is assembled in Shenzhen. Nike began outsourcing manufacturing in the 1970s; today it has plants in Vietnam and South Korea as well as China. IBM now has more workers in India than in the US. As of April 2012, Walmart’s supply chain included some 30,000 Chinese factories, producing an estimated 70 per cent of all of the goods it sells. This trend has gone on so long that there now exists a portion of the northeastern US, formerly known as the Manufacturing/Steel/Factory Belt, that is now known as the Rust Belt, owing to industrial and economic decline occasioned by outsourcing and the automation of jobs.

Meanwhile, for those jobs that have escaped being shipped overseas, the average wage has been stagnant for 40 years. A generation has now arisen in America that will be the first in modern American history to end up poorer than their parents. To make up for stagnant incomes, American citizens are drowning in private debt (US$14 trillion worth) including mortgages (US$9.44 trillion) and student loans (US$1.5 trillion). Indeed, absolute US household debt was higher in November 2019 than prior to/during the great recession, although the debt-to-income levels during the great recession were higher than the 2019 levels (83 per cent to 73 per cent). High house prices, supported as they are by mortgage lending, coupled with student loans, together mean that new graduates are experiencing “failure to launch”, i.e. the inability to leave one’s parents’ home and start one’s own family.

(We should pause here to note, parenthetically, that the level of any nation’s private debt, and America’s in particular, is a very important metric. The level of private debt was the key indicator that enabled Professor Steve Keen, one of the Bezemer 12, to predict the North Atlantic financial crisis of 2007-8, a prediction mainstream/neoclassical economics, quite criminally, failed to make.)

The US$14 trillion of private debt that American citizens owe is owed to the very same mega-corporation class whose wage stagnation has necessitated the need for lending (since the early 1970s, the hourly inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2 per cent per year). Most unfortunately, this wage stagnation is not uniform: the ratio of CEO-to-worker earnings has soared from 21-to-1 in 1965 to 320-to-1 in 2019.

A generation has now arisen in America that will be the first in modern American history to end up poorer than their parents.

Has the American mega-corporation been censured by the political class for these excesses? Hardly. In fact, the large American corporation, while using American infrastructure, using some degree of American labour and selling to Americans, is allowed to pretend that it operates outside America, by invoicing from nations with low tax rates, such as Ireland, thereby avoiding paying federal taxes on its income. From 2009-2018, for example, Amazon paid an effective federal tax rate of 3 per cent on profits totalling US$26.5 billion. In 2018 alone, the company received a tax relief of US$129 million dollars on profits of US$11.2 billion. Such is the scale of tax avoidance by American corporations that by 2016 a staggering US$2 trillion in untaxed corporate profits was stashed outside the US, according to the New York Times. (What makes this doubly lamentable is that the Internal Revenue Service tells the American citizen in unambiguous terms that “Your worldwide income is subject to U.S. income tax, regardless of where you reside.”)

Corporations, therefore, enjoy egregious advantages. It is in order to keep them that they are so willing to fund political campaigns. In other words, corporations will do everything to avoid paying the taxes that would improve American infrastructure and healthcare (to their own benefit) but spend billions on political campaigns to inoculate themselves from losing the unfair advantages they have carved out for themselves.

The effect of the plutocracy on American politics

The shock election of President Donald Trump in 2016 can be seen as a response to the deleterious effects of corporate hegemony on the American political and economic life. Candidate Trump campaigned as an outsider, promising to “drain the swamp”, even though, ironically, he was himself a self-styled billionaire who shipped jobs to China and paid very little in taxes. America was suffering economically. He claimed that the blame for this could be placed squarely on the shoulders of China and immigrants. In an illuminating two-part, three-and-a-half hour 2019 interview with PBS, key Trump campaign advisor Steve Bannon (who was arrested for fraud and then pardoned by President Trump on his last full day in office) stated that the cost of the 2008-09 bailout was loaded onto the American middle class, and that American gig economy millennials are nothing but 19th-century Russian serfs. Many may disagree with Mr Bannon’s political views, but his statement had its finger on the pulse of post-bank-bailout America. The genius of the Trump campaign was its ability to identify these pain points; to incorrectly but convincingly blame foreigners – locally (immigrants) and abroad (China) – for what were and continue to be the excesses of the plutocracy; to identify the existence of a swamp in Washington and characterise Hillary Clinton as the personification of these ills; and to ride that wave all the way to the White House. The lesson – a lesson seemingly yet unlearned by mainstream politics – is that it actually worked.

Candidates however, campaign in poetry; rulers, on the other hand, govern in prose. During Trump’s presidency Faustian bargains, in Steve Bannon’s words, were made; here again the power of the corporatocracy made itself felt. One of the early indicators of the direction and tenor a presidency will take is a president’s cabinet picks; Steven Mnuchin, yet another ex-Wall Street executive, was placed in charge of the Treasury. While President Trump did not drag the US into another war – in spite of the assassination of Iranian Major-General Qassim Soleimani – his presidency did not up-end Washington in ways meaningful to the nation’s citizenry. Readers may recall the US$2 trillion of untaxed corporate profits mentioned earlier; President Trump’s signature legislative achievement was to open new windows for tax rebates for major corporations, reducing taxes on the wealthy. This legislation resulted in the repatriation of US$777 billion in 2018, but the Federal Reserve noted that “the strongest effect of repatriation was on share buybacks” by corporate America. This particular episode is a textbook example of the plutocracy at work.

Trump does not greatly differ in this way from the way in which Candidate Obama contrasts with President Obama. Candidate Obama campaigned on Change We Can Believe In. Yet, once elected, he bailed out the banks (the abiding question on this, some wonder, is why citizens did not retain their houses if the banks’ losses were made good). Obamacare, a very significant advance in the fight for decent healthcare for Americans, did not include a public option although it could have. Nor did President Obama succeed in extricating himself from American warmongering abroad: in a particularly sad and tragic episode he helped end the Libya Gaddaffi had created. Libya under Gaddaffi was a nation that had free university education, free healthcare, no external debt and reserves of US$150 billion – all ideals that America, ironically, declares it wants but has yet to achieve despite its claim to being the richest nation in history. Allied “intervention” replaced that Libya with today’s bombed-out nation, in which incessant internecine strife went on for a decade. This in Africa, the land of Obama’s fathers. Only two years previously, at a location just two hours from Benghazi by air, the new President had given his “A New Beginning” speech in Cairo, which speech contributed to his winning the Nobel Peace Prize later that year.

In these two presidencies, we see, microcosmically, the effects of the plutocracy at work: the lofty ideals of the campaigning candidate and the searing needs of the masses, once office is assumed, are replaced by a kind of neutered, ineffective pragmatism, as far as the wellbeing of American citizens is concerned, and a sly and insidious effectiveness where corporate welfare is concerned.

The 2020 campaign

Perhaps the defining characteristic of the 2020 campaign is that it took place against the backdrop of a global pandemic. The cost of this pandemic – in the gruesome currency of American lives – has been more than 500,000 dead Americans and counting, nearly 10 times the number of US soldiers who died in the Vietnam War, and more than the number of American lives lost in World War II.

Uniquely among developed nations, the structure of America’s healthcare system is such that very often one only has healthcare if one is employed. So that when 44 million Americans filed for unemployment during the pandemic, they lost their medical cover at precisely the time they most needed it. The pandemic therefore threw into sharp focus the critical importance of having a healthcare system that is not based upon employment.

(Nor is the state of health insurance all that is wrong with American healthcare – in several tragic articles it has been reported that American diabetics have been driving to Canada in caravans to buy insulin – some driving up to 5 hours one way. Price-gouging by pharmaceutical companies means that the drug is ten times cheaper in Canada than it is in America.)

The bipartisan response to the pandemic was to pass the Coronavirus Aid, Relief, and Economic Security (CARES) Act that – while it gave individuals with less than US$99,000 a year annual income a check of US$1,200 a month – also gave further tax cuts to the wealthy. According to the nonpartisan Joint Committee on Taxation, just 43,000 individual tax filers covered by one of the Act’s provisions would see their tax liability fall by a combined US$70.3 billion in 2020 (or about US$1.7 million each). This is the America that corporatism has created.

And yet, mid-pandemic, was healthcare on the national ballot? How, when pharmaceutical and health product industries have spent a total of US$4.7 billion on lobbying the federal government, US$877 million on state candidates and committees, and US$414 million in the 20 years to 2018? Indeed, by the time he won the nomination, Joe Biden had already said he would veto a Medicare for All bill if it landed on his desk (a colossal if, it must be said), proposing a public option instead.

So what was on the ballot? Democrats, choosing to characterise Trump’s presidency as the problem, instead of seeing it as the natural consequence of the decades of wage stagnation, high healthcare costs, inordinately high levels of private debt, etc., campaigned on the platform of “restoring the soul of America”. The president’s narrow margins of victory perhaps find an explanation here: the problems Americans face were not really on the ballot. And they were not on the ballot because the corporations that stump up the money to fund electoral campaigns benefit from providing privatised solutions to the problems Americans face.

Is there hope?

There is an American constituency that is in broad agreement on the issues raised above: a Fox News exit poll, for example, showed that 72 per cent of Americans were at least somewhat in favour of changing to a government-run healthcare plan. Florida, a state President Trump won, voted to increase the state’s minimum wage to US$15 an hour.

However, it is unlikely that this broad constituency will be allowed to unite under the current political system. The reality is that the US is a de facto one-party state. If that party were to be honestly named, it might be named the Megacorp Party, or, slightly more genteelly, the Corporatist/Establishment Party. It has two wings: a supposedly left-leaning Democratic wing and a supposedly conservative Republican wing. Under the framework of Citizens United these two wings will continue to swap power ad infinitum. Yet, even as the presidency bounces from party to party, a president from one party will bomb Iraq; the next president, from the other party, will campaign on the platform that he never voted to go to war in Iraq, only to subsequently bomb Libya. These tragic contradictions find their resolution in the fact that this war activity happens at the behest of the military-industrial complex.

Political consultants will keep finding new, misleading ways of “framing the political argument,” creating false choices and developing narratives such as restoring the soul of the nation. Meanwhile, the money that pays them will continue to fortify itself against the needs of the people; the rich will get richer, the poor will get poorer and power will remain with the wealthy.

As long as this continues, we can expect two outcomes. The first is that the issues that Americans need solved will not be solved. (We are now reading, for example, that the US$15 dollars/hour minimum wage President Biden promised (during a presidential debate), is unlikely be included in the US$1.9 trillion-dollar stimulus package President Biden intends to bring to Congress.) The second is that, as a result of the failure to resolve these issues, America will, in the words of Robert Reich, continue to produce candidatures like Donald Trump’s as far as the eye can see. The American political system does not contain within itself the mechanism to correct the current malaise. As a result, money will continue to win out: it will continue to select which issues are on the ballot, and it will continue to choose which candidates win. America’s long decline, therefore, is likely to continue.

The corporations that stump up the money to fund electoral campaigns benefit from providing privatised solutions to the problems Americans face.

We may not be aware of it yet, because of the hold the nation has on global media (the concentration of media ownership in America is yet another triumph of the plutocracy), but America’s decline appears to be terminal.

I return to the beginning – this article is written colossally log-in-eye. As a Kenyan I know we have major, pressing domestic issues to resolve. If or as we make a detour to examine the American political situation, let our contemplation resemble our use of a mirror, and let our aims be those of helping us to avoid the problems others have experienced, in order to more wisely and speedily resolve our own.

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