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Perelman, Michael & Sitas, Ari & Hart, Gillian & Masondo, David & Meth, Charles & Legassick, Martin & du Toit, Andries & Neves, David & Frye, Isobel & Freund, Bill & Pillay, Devan & Bond, Patrick & Hunter, Nina & Samson, Melanie & Mapadimeng, Mokong Simon & Desai, Ashwin & Legum, Margaret (2007) Transcending Two Economies Renewed debates in South African political economy. Special issue of the University of South Africa Development Studies journal Africanus, November 2007 : 1-263.


AFRICANUS Journal of Development Studies
Vol 37 No 2 2007

ISSN 0304-615x
Transcending two economies – renewed debates in
South African political economy

Special issue of the University of South Africa Development
Studies journal /Africanus, /November 2007


Two economies – or one system of superexploitation
Patrick Bond 1


Articulation from feudalism to neoliberalism
Michael Perelman 22

Wolpe’s legacy of articulating political economy
Ari Sitas 39

Changing concepts of articulation
Gillian Hart 46

Capitalism and racist forms of political domination
David Masondo 66

‘Rational ignorance’ and South African poverty statistics
Charles Meth 81

Flaws in South Africa’s ‘first’ economy
Martin Legassick 111

In search of South Africa’s ‘second economy’
Andries du Toit and David Neves 145


The ‘second economy’ as intellectual sleight of hand
Isobel Frye 175

South Africa as developmental state?
Bill Freund 191

The stunted growth of South Africa’s developmental state discourse
Devan Pillay 198

Two economies, microcredit and the Accelerated and
Shared Growth Initiative for South Africa
Patrick Bond 216

Crises in social reproduction and home-based care
Nina Hunter 231

When public works programmes create ‘second economy’
Melanie Samson 244

Ubuntu/botho, the workplace and ‘two economies’
Mokong Simon Mapadimeng 257

Taylorism and Mbekism
Ashwin Desai 272

With compliments, from a recovered economist
Margaret Legum 288

© Unisa Press 1ISSN 0304-615X
/Africanus /37 (2) 2007

The first economy is the modern industrial, mining, agricultural,
financial,and services sector of our economy that, everyday, becomes ever more integrated in the global economy. Many of the major interventions made by our government over the years have sought to address this ‘first world economy’, to ensure that it develops in the right direction, at the right pace.

It is clear that this sector of our economy has responded and continues
to respond very well to all these interventions … The successes we have
scored with regard to the ‘first world economy’ also give us the possibility
to attend to the problems posed by the ‘third world economy’, which exists
side by side with the modern ‘first world economy’ … Of central and
strategic importance is the fact that they are structurally disconnected from
our country’s ‘first world economy’.

Thabo Mbeki, ANC Today, 2003.

From day to day it ... becomes clearer that the relations of production in
which the bourgeoisie moves do not have a simple, uniform character but
rather a dual one; that in the same relations in which wealth is produced,
poverty is produced also; that in the same relations in which there is a
development of the forces of production, there is also the development of a
repressive force; that these relations produce bourgeois wealth, i.e. the wealth of the bourgeois class, only by continually annihilating the wealth of the individual members of this class and by producing an ever growing proletariat
Karl Marx, Capital,1867.

Introduction: Two economies – or one system of superexploitation

By Patrick Bond: University of KwaZulu-Natal Centre for Civil Society, Durban


In the pages that follow, a group of South Africa’s leading political economists tackle President Thabo Mbeki’s ‘two economies’ thesis, the framework most popularly invoked for contemporary poverty policy in South Africa. In short, poverty can be beat if sturdy (market-focused) ladders are found between the second and first economy, which unfortunately at present are ‘structurally disconnected’. On at least two earlier occasions, a critical mass of university-based intellectuals gathered in various publications to contest ideas of this sort: the mid-1970s when radicals fought liberals over the relationship between race and class;
and the early 1990s when the South African version of the Regulation School was established.

Both contributions were flawed, we will see. Since then, there has been a growing sense of the need to revisit and reconstruct old frameworks, in part because of the tremendous upsurge in popular social struggles associated with new types of exploitation. Political economists are late in responding to \ the challenge, but may now have established the necessary historical, theoretical and applied framework.

To work this out properly, our contributors are all aware, requires a renewed commitment to the underlying intellectual challenge posed systematically in Harold Wolpe’s (1972, 1980)early work, on the way modes of production were ‘articulated’ so as to link cities, mines, plantations and Bantustans. That challenge is now amplified by President Thabo Mbeki’s neomodernisation argumentation and practice, dressed up as it often is in egalitarian, redistributive garb, reminding us of Wolpe’s own political commitments – but then departing fundamentally from those. Hence, if the idea of ‘talk left, walk right’ (Bond 2006) accurately describes the way South African elites challenge what they term ‘global apartheid’, in the following pages we ask whether the same process is evident domestically in the very conceptualisation of political economy.

The contributors to this particular volume come together as part of a wide-ranging effort to reinvigorate South African political economic theory and analysis. They gathered at the University of KwaZulu-Natal’s Centre for Civil Society on 28 February 2006 for a Colloquium on Economy, Society and Nature which included a tribute to Harold Wolpe on the tenth anniversary of his passing.1 In addition to Wolpe, two other great political economists active until 2005 in regional debates

Guy Mhone and Jose Negrao – were also feted on 1 March at the Colloquium, as recorded in The Review of African Political Economy (March 2007) by Thandika

Mkandawire (for his cousin Mhone) and by Negrao’s widow Sabina Asselle and Joe Hanlon. (Other articles in that Roape drawn from the Colloquium are Gillian Hart’s work on articulations reprinted below – for which we are grateful to the Roape editors for permission – and analysis of resistance strategies by CCS masters student Prishani Naidoo and by one of our Wits University associates, Salim Vally.) Mhone and Negrao offered original critiques of systemic uneven development in other Southern African settings, a necessary task we have therefore not attempted to replicate in this volume.

Mhone’s critique of what he called capitalist ‘enclavity’ received special treatment in a recent booklet devoted to his memory, launched in Nairobi at the January 2007 Mhone Memorial Seminar of the International Development Economics Associates (with which Guy was closely associated) by Mkandawire and Indian economist

Jayati Ghosh (Bond 2007b). Of extraordinary merit is the inspiring review of Mhone’s ideas by Adebayo Olukoshi, contextualised within broader economic development theory. Most important, perhaps, a summary of the prolific
contributions by Mhone and Negrao would have to stress the way their own /praxis /– the often frictional rubbing of radical ideas against establishment power politics – contributed enormously to the production of knowledge (Bond 2007a).

Their deaths in 2005 represented a tragic loss to political economy and to all who knew and worked with them.

Wolpe, Mhone and Negrao taught us to assess the way social challenges are reflected in the system’s actions and reactions. Hence a further rubbing of ideas occurred at the Colloquium when from 2–4 March, CCS joined the Rosa
Luxemburg Foundation in celebrating her masterpiece of political economy, The accumulation of capital. For Luxemburg, writing in 1913, the problem of imperialism itself followed the very logic of capital ‘superexploiting’ the non-capitalist terrain of the Third World, and South Africa was a classic case. In the edited collection that resulted,

The accumulation of capital in Southern Africa, several chapters addressed
the historical and contemporary South African economy, including Jeff
Guy’s treatment of Luxemburg’s source material; a debunking of two economies by Caroline Skinner and Imraan Valodia; critiques of commodified state services by Greg Ruiters and the Black Economic Empowerment strategy by Leonard Gentle; and activist responses by S’bu Zikode, Salim Vally and Trevor Ngwane (Bond, Chitonge and Hopfmann 2007).

What sets this volume apart are the specifically South African
analytical focus, the orientation to practical problems,and the varieties of
overlapping critiques of Mbeki’s new dualist analysis and strategy.
The pages that follow are grouped into two sets of essays
– first, diagnosis and then, policy/politics – which
help us to consider economic development in terms of either ‘two
economies’ or instead,‘superexploitation’.

For Marxists, the idea of superexploitation is often captured by
‘permanent primitive accumulation’, in which the initial capitalist
strategy of dispossessing non-capitalist spheres – most famously in
land enclosures which forced peasants into a proletarianisation
process – becomes permanent. Superexploitation is a way to understand South Africa’s history of extremely biased accumulation, combining capitalism and non-capitalist sites of work, of life and of nature.
This process of ‘uneven and combined development’ can be identified in history as integral to the ‘original’ moment of capital accumulation considered by Marx as ‘primitive’, i.e., in the initial stages when the new mode of production was gathering momentum not on the basis of exploitation at the point of production – the main point of /Das Kapital /– but rather in the superexploitative relations between market and non-market activities.

David Harvey has termed this broader process ‘accumulation by dispossession’ (in contrast to accumulation by exploitation at the point of production), and locates it as the dynamic behind the ‘new imperialism’, in the spirit of Luxemburg’s early 20th century argument.

The capitalist system’s recourse to systematic looting has,argues Harvey, emerged time and again during accumulation crises, including at present. He traces the most substantial economic problems in ‘overaccumulation’ which set in at the global scale during the 1970s, and which has only been displaced,not resolved, since (Harvey 2003).

That was also the point at which Wolpe himself located modern South Africa’s historically high profitability in an articulation of two modes of production, capitalist and pre-capitalist. But the argument arose within a vibrant intellectual context that meant it was neither the first nor last word in understanding social relations.

We can consider, next, some other key strands in political-economic analysis prior to the 1970s revival of neo-Marxist political economy.

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