Which Road to Development? Nationalization or Socialization?

Many third world countries, under the disguise of nationalism, have created state-owned enterprises or parastatals that are reinforcing social and economic inequities between people rather than reversing them. This statist model of development has been adopted in rapidly developing East Asian countries like China and South Korea. As the neo-liberal development strategy (rightfully) continues to decline in Africa and Latin America, many governments there will look toward variants of authoritarian "Asian Capitalism". The debate in South Africa over this particular version of nationalization therefore should be followed closely by progressives in the Global South.

As a key member of the African National Congress-led alliance, the South African Communist Party (SACP) must often balance between revolutionary leadership for the country's marginalized and a policy 'think-tank' for the state's bureacracy. This dialectical relationship between fundamental transformation of the system and gradual reform within the system was on full display during the Party's most recent Politburo meeting. Their first meeting of the new year featured a heated debate with the ANC Youth League over nationalization of mines in South Africa. I would like to re-post the meat of the SACP's argument on nationalization because I think it speaks to a general contradiction within the developing world today---the movement toward greater state nationalization of industries without popular and democratic content.

"In the first place, state ownership of key sectors of the economy is, in itself, not necessarily a progressive still less anti-capitalist move - the apartheid regime and various fascist states had extensive state ownership. Key financial institutions in the UK and US currently are also now effectively "nationalised". In all of these cases, state ownership has not been about rolling back the logic of private profits for a few in the interests of meeting the social needs of the majority - but rather bureaucratic interventions to rescue capitalism in crisis. The recent bank buy-outs in some advanced capitalist countries have been correctly described by mainstream economists as "socialism for capitalists", while the majority are burdened with a huge national debt to pay for the bail-outs.

In the second place, as the many recent scandals in our own parastatals have underlined, public sector ownership, on its own, is no guarantee that this public property will not be plundered by senior management for their own private accumulation purposes. Primitive accumulation rent-seeking is one of the major plagues currently afflicting our democracy and it lies at the root of many sectarian battles and disputes within our broader movement. It is absolutely essential that we wage an intensified battle against it. It would be the height of hypocrisy, by the way, to be calling for "nationalisation" on the one hand, while being intimately involved in the private plundering of public resources on the other."

Likewise, fighting corruption, another shared strategic priority, critically relates to bringing the state and especially the SOEs under a social/developmental mandate - as opposed to using them as sources for primitive accumulation. The current crisis around governance, golden hand-shakes, exorbitant tariffs, and failures to actually effectively deliver in many SOEs provides us with an opportunity to advance (not the cause of privatisation, as the DA will do) but rather their effective and increasing socialisation - i.e. subordination to the logic of meeting social needs not private profits."

There are more effective ways of challenging the dominance of transnational capital or promoting economic sovereignty than narrow nationalist statism. As the SACP correctly points out, nationalization without democratic socialization and participation is surrendering public resources to defend private profits. The next decade will feature other high profile debates about the role of the state in developing economies. Repeating the perverse 'developmentalist' policies of East Asian countries will only serve to further marginalize the poor and popular classes who are waiting so desperately to be empowered during the global recession.