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Reference
Klein, Naomi  (2007) Democracy Born In Chains: South Africa’s Constricted Freedom. Chapter 10 of The Shock Doctrine: The Rise of Disaster Capitalism : 194-217.

Summary
Reconciliation means that those who have been on the underside of
history must see that there is a qualitative difference between
repression and freedom. And for them, freedom translates into having a
supply of clean water, having electricity on tap; being able to live in
a decent home and have a good job; to be able to send your children to
school and to have accessible health care. I mean, what's the point of
having made this transition if the quality of life of these people is
not enhanced and improved? If not, the vote is useless.

Archbishop Desmond Tutu, chair of South Africa's Truth and
Reconciliation Commission, 2001 1


Before transferring power, the Nationalist Party wants to emasculate it.
It is trying to negotiate a kind of swap where it will give up the right
to run the country its way in exchange for the right to stop blacks from
running it their own way.

Allister Sparks, South African journalist2

In January 1990, Nelson Mandela, age seventy-one, sat down in his prison
compound to write a note to his supporters outside. It was meant to
settle a debate over whether twenty-seven years behind bars, most of it
spent on Robben Island off the coast of Cape Town, had weakened the
leader's commitment to the economic transformation of South Africa's
apartheid state.

The note was only two sentences long, and it decisively put the matter
to rest: "The nationalisation of the mines, banks and monopoly
industries is the policy of the ANC, and the change or modification of
our views in this regard is inconceivable. Black economic empowerment is
a goal we fully support and encourage, but in our situation state
control of certain sectors of the economy is unavoidable."3 History, it
turned out, was not over just yet, as Fukuyama had claimed. In South
Africa, the largest economy on the African continent, it seemed that
some people still believed that freedom included the right to reclaim
and redistribute their oppressors' ill-gotten gains.

That belief had formed the basis of the policy of the African National
Congress for thirty-five years, ever since it was spelled out in its
statement of core principles, the Freedom Charter. The story of the
charter's drafting is the stuff of folklore in South Africa, and for
good reason. The process began in 1955, when the party dispatched fifty
thousand volunteers into the townships and countryside. The task of the
volunteers was to collect "freedom demands" from the people---their
vision of a postapartheid world in which all South Africans had equal
rights. The demands were handwritten on scraps of paper: "Land to be
given to all landless people," "Living wages and shorter hours of work,"
"Free and compulsory education, irrespective of color, race or
nationality," "The right to reside and move about freely" and many
more.4 When the demands came back, leaders of the African National
Congress synthesized them into a final document, which was officially
adopted on June 26, 1955, at the Congress of the People, held in
Kliptown, a "buffer zone" township built to protect the white residents
of Johannesburg from the teeming masses of Soweto. Roughly three
thousand delegates---black, Indian, "colored" and a few white---sat
together in an empty field to vote on the contents of the document.
According to Nelson Mandela's account of the historic Kliptown
gathering, "the charter was read aloud, section by section, to the
people in English, Sesotho and Xhosa. After each section, the crowd
shouted its approval with cries of 'Afrika!' and 'Mayibuye!' "5 The
first defiant demand of the Freedom Charter reads, "The People Shall
Govern!" In the mid-fifties, that dream was decades away from
fulfillment. On the Congress's second day, the gathering was violently
broken up by police, who claimed the delegates were plotting treason.

For three decades, South Africa's government, dominated by white
Afrikaners and British, banned the ANC and the other political parties
that were intent on ending apartheid. Throughout this period of intense
repression, the Freedom Charter continued to circulate, passed from hand
to hand in the revolutionary underground, its power to inspire hope and
resistance undiminished. In the 1980s, it was picked up by a new
generation of young militants who emerged in the townships. Fed up with
patience and good behavior and braced to do whatever it took to topple
white domination, the young radicals stunned their parents with their
fearlessness. They took to the streets without illusion, chanting,
"Neither bullets nor tear gas will stop us." They faced massacre after
massacre, buried friends, kept singing and kept coming. When the
militants were asked what they were fighting against, they answered,
"Apartheid" or "Racism"; asked what they were fighting for, many replied
"Freedom" and, often, "The Freedom Charter." The charter enshrines the
right to work, to decent housing, to freedom of thought, and, most
radically, to a share in the wealth of the richest country in Africa,
containing, among other treasures, the largest goldfield in the world.

"The national wealth of our country, the heritage of South Africans,
shall be restored to the people; the mineral wealth beneath the soil,
the Banks and monopoly industry shall be transferred to the ownership of
the people as a whole; all other industry and trade shall be controlled
to assist the well-being of the people," the charter states.6 At the
time of its drafting, the charter was viewed by some in the liberation
movement as positively centrist, by others as unforgivably weak. The
Pan-Africanists castigated the ANC for conceding too much to white
colonizers (why did South Africa belong to "everyone, black and white?"
they asked; the manifesto should have demanded, as the Jamaican black
nationalist Marcus Garvey had, "Africa for the Africans.") The staunch
Marxists dismissed the demands as "petty bourgeois": it wasn't
revolutionary to divide the ownership of the land among all people;
Lenin said that private property itself must be abolished.

What was taken as a given by all factions of the liberation struggle was
that apartheid was not only a political system regulating who was
allowed to vote and move freely. It was also an economic system that
used racism to enforce a highly lucrative arrangement: a small white
elite had been able to amass enormous profits from South Africa's mines,
farms and factories because a large black majority was prevented from
owning land and forced to provide its labor for far less than it was
worth---and was beaten and imprisoned when it dared to rebel. In the
mines, whites were paid up to ten times more than blacks, and, as in
Latin America, the large industrialists worked closely with the military
to have unruly workers disappeared. 7 What the Freedom Charter asserted
was the baseline consensus in the liberation movement that freedom would
not come merely when blacks took control of the state but when the
wealth of the land that had been illegitimately confiscated was
reclaimed and redistributed to the society as a whole. South Africa
could no longer be a country with Californian living standards for
whites and Congolese living standards for blacks, as the country was
described during the apartheid years; freedom meant that it would have
to find something in the middle.

That was what Mandela was confirming with his two-sentence note from
prison: he still believed in the bottom line that there would be no
freedom without redistribution. With so many other countries now also
"in transition," it was a statement with enormous implications. If
Mandela led the ANC to power and nationalized the banks and the mines,
the precedent would make it far more difficult for Chicago School
economists to dismiss such proposals in other countries as relics of the
past and insist that only unfettered free markets and free trade had the
ability to redress deep inequalities.

On February 11, 1990, two weeks after writing that note, Mandela walked
out of prison a free man, as close to a living saint as existed anywhere
in the world. South Africa's townships exploded in celebration and
renewed conviction that nothing could stop the struggle for liberation.
Unlike the movement in Eastern Europe, South Africa's was not beaten
down but a movement on a roll. Mandela, for his part, was suffering from
such an epic case of culture shock that he mistook a camera microphone
for "some newfangled weapon developed while I was in prison."8 It was
definitely a different world from the one he had left twenty-seven years
earlier. When Mandela was arrested in 1962, a wave of Third World
nationalism was sweeping the African continent; now it was torn apart by
war. While he was in prison, socialist revolutions had been ignited and
extinguished: Che Guevara had been killed in Bolivia in 1967; Salvador
Allende had died in the coup of 1973; Mozambique's liberation hero and
president, Samora Machel, had perished in a mysterious plane crash in
1986. The late eighties and early nineties saw the fall of the Berlin
Wall, the repression in Tiananmen Square and the collapse of Communism.

Amid all this change there was little time for catching up: immediately
on his release, Mandela had a people to lead to freedom while preventing
a civil war and an economic collapse---both of which looked like
distinct possibilities.

If there was a third path between Communism and capitalism---a way of
democratizing the country and redistributing wealth at the same time---
South Africa under the ANC looked uniquely positioned to turn that
persistent dream into reality. It wasn't only the global outpouring of
admiration and support for Mandela but also the particular way in which
the antiapartheid struggle had taken shape in the preceding years. In
the eighties, it had become a truly global mass movement, and outside
South Africa, the weapon that activists wielded most effectively was the
corporate boycott--- both of South African--made products and of
international firms that did business with the apartheid state. The goal
of the boycott strategy was to put enough of a squeeze on the corporate
sector that it would lobby the intransigent South African government to
end apartheid. But there was also a moral component to the campaign:
many consumers firmly believed that companies that were profiting from
white supremacist laws deserved to take a financial hit.

It was this attitude that gave the ANC a unique opportunity to reject
the free-market orthodoxy of the day. Since there was already widespread
agreement that corporations shared responsibility for the crimes of
apartheid, the stage was set for Mandela to explain why key sectors of
South Africa's economy needed to be nationalized just as the Freedom
Charter demanded. He could have used the same argument to explain why
the debt accumulated under apartheid was an illegitimate burden to place
on any new, popularly elected government. There would have been plenty
of outrage from the IMF, the U.S. Treasury and the European Union in the
face of such undisciplined behavior, but Mandela was also a living
saint---there would have been enormous popular support for it as well.

We will never know which of these forces would have proved more powerful.

In the years that passed between Mandela's writing his note from prison
and the ANC's 1994 election sweep in which he was elected president,
something happened to convince the party hierarchy that it could not use
its grassroots prestige to reclaim and redistribute the country's stolen
wealth. So, rather than meeting in the middle between California and the
Congo, the ANC adopted policies that exploded both inequality and crime
to such a degree that South Africa's divide is now closer to Beverly
Hills and Baghdad. Today, the country stands as a living testament to
what happens when economic reform is severed from political
transformation. Politically, its people have the right to vote, civil
liberties and majority rule. Yet economically, South Africa has
surpassed Brazil as the most unequal society in the world.

I went to South Africa in 2005 to try to understand what had happened in
the transition, in those key years between 1990 and 1994, to make
Mandela take a route that he had described so unequivocally as
"inconceivable." The ANC went into negotiations with the ruling National
Party determined to avoid the kind of nightmare that neighboring
Mozambique had experienced when the independence movement forced an end
to Portuguese colonial rule in 1975. On their way out the door, the
Portuguese threw a vindictive temper tantrum, pouring cement down
elevator shafts, smashing tractors and stripping the country of all they
could carry. To its enormous credit, the ANC did negotiate a relatively
peaceful handover.

However, it did not manage to prevent South Africa's apartheid-era
rulers from wreaking havoc on their way out the door. Unlike their
counterparts in Mozambique, the National Party didn't pour
concrete---their sabotage, equally crippling, was far subtler, and was
all in the fine print of those historic negotiations.

The talks that hashed out the terms of apartheid's end took place on two
parallel tracks that often intersected: one was political, the other
economic.

Most of the attention, naturally, focused on the high-profile political
summits between Nelson Mandela and F. W. de Klerk, leader of the
National Party.

De Klerk's strategy in these negotiations was to preserve as much power
as possible. He tried everything---breaking the country into a
federation, guaranteeing veto power for minority parties, reserving a
certain percentage of the seats in government structures for each ethnic
group---anything to prevent simple majority rule, which he was sure
would lead to mass land expropriations and the nationalizing of
corporations. As Mandela later put it, "What the National Party was
trying to do was to maintain white supremacy with our consent." De Klerk
had guns and money behind him, but his opponent had a movement of
millions. Mandela and his chief negotiator, Cyril Ramaphosa, won on
almost every count.9 Running alongside these often explosive summits
were the much lower profile economic negotiations, primarily managed on
the ANC side by Thabo Mbeki, then a rising star in the party, now South
Africa's president.

As the political talks progressed, and it became clear to the National
Party that Parliament would soon be firmly in the hands of the ANC, the
party of South Africa's elites began pouring its energy and creativity
into the economic negotiations. South Africa's whites had failed to keep
blacks from taking over the government, but when it came to safeguarding
the wealth they had amassed under apartheid, they would not give up so
easily.

In these talks, the de Klerk government had a twofold strategy. First,
drawing on the ascendant Washington Consensus that there was now only
one way to run an economy, it portrayed key sectors of economic decision
making--- such as trade policy and the central bank---as "technical" or
"administrative." Then it used a wide range of new policy
tools---international trade agreements, innovations in constitutional
law and structural adjustment programs--- to hand control of those power
centers to supposedly impartial experts, economists and officials from
the IMF, the World Bank, the General Agreement on Tariffs and Trade
(GATT) and the National Party---anyone except the liberation fighters
from the ANC. It was a strategy of balkanization, not of the country's
geography (as de Klerk had originally attempted) but of its economy.

This plan was successfully executed under the noses of ANC leaders, who
were naturally preoccupied with winning the battle to control
Parliament. In the process, the ANC failed to protect itself against a
far more insidious strategy---in essence, an elaborate insurance plan
against the economic clauses in the Freedom Charter ever becoming law in
South Africa. "The people shall govern!" would soon become a reality,
but the sphere over which they would govern was shrinking fast.

While these tense negotiations between adversaries were unfolding, the
ANC was also busily preparing within its own ranks for the day when it
would take office. Teams of ANC economists and lawyers formed working
groups charged with figuring out exactly how to turn the general
promises of the Freedom Charter---for housing amentites and health
care---into practical policies. The most ambitious of these plans was
Make Democracy Work, an economic blueprint for South Africa's
postapartheid future, written while the high-level negotiations were
taking place. What the party loyalists didn't know at the time was that
while they were hatching their ambitious plans, the negotiating team was
accepting concessions at the bargaining table that would make their
implementation a practical impossibility. "It was dead before it was
even launched," the economist Vishnu Padayachee told me of Make
Democracy Work. By the time the draft was complete, "there was a new
ball game." As one of the few classically trained economists active in
the ANC, Padayachee was enlisted to play a leading role in Make
Democracy Work ("doing the number-crunching," as he puts it). Most of
the people he worked alongside in those long policy meetings went on to
top posts in the ANC government, but Padayachee did not. He has turned
down all the offers of government jobs, preferring academic life in
Durban, where he teaches, writes and owns the much-loved Ike's Bookshop,
named after Ike Mayet, the first non-white South African bookseller. It
was there, surrounded by carefully preserved out-of-print volumes on
African history, that we met to discuss the transition.

Padayachee entered the liberation struggle in the seventies, as an
adviser to South Africa's trade union movement. "We all had the Freedom
Charter stuck on the back of our doors in those days," he recalled. I
asked him when he knew its economic promises were not going to be
realized. He first suspected it, he said, in late 1993, when he and a
colleague from the Make Democracy Work group got a call from the
negotiating team who were in the final stages of haggling with the
National Party. The call was a request for them to write a position
paper on the pros and cons of making South Africa's central bank an
independent entity, run with total autonomy from the elected
government---oh, and the negotiators needed it by morning.

"We were caught completely off guard," recalled Padayachee, now in his
early fifties. He had done his graduate studies at Johns Hopkins
University in Baltimore. He knew that at the time, even among
free-market economists in the U.S., central bank independence was
considered a fringe idea, a pet policy of a handful of Chicago School
ideologues who believed that central banks should be run as sovereign
republics within states, out of reach of the meddling hands of elected
lawmakers.(*)10 For Padayachee and his colleagues, who strongly believed
that monetary policy needed to serve the new government's "big goals of
growth, employment and redistribution," the ANC's position was a
no-brainer: "There was not going to be an independent central bank in
South Africa." Padayachee and a colleague stayed up all night writing a
paper that gave the negotiating team the arguments it needed to resist
this curveball from the National Party. If the central bank (in South
Africa called the Reserve Bank) was run separately from the rest of the
government, it could restrict the ANC's ability to keep the promises in
the Freedom Charter. Besides, if the central bank was not accountable to
the ANC government, to whom, exactly, would it be accountable? The IMF?
The Johannesburg Stock Exchange?

Obviously, the National Party was trying to find a backdoor way to hold
on to power even after it lost the elections---a strategy that needed to
be resisted at all costs. "They were locking in as much as possible,"
Padayachee recalled.

"That was a clear part of the agenda." Padayachee faxed the paper in the
morning and didn't hear back for weeks. "Then, when we asked what
happened, we were told, 'Well, we gave that one up.' " Not only would
the central bank be run as an autonomous entity within the South African
state, with its independence enshrined in the new constitution, but it
would be headed by the same man who ran it under apartheid, Chris Stals.
It wasn't just the central bank that the ANC had given up: in another
major concession, Derek Keyes, the white finance minister under
apartheid, would also remain in his post---much as the finance ministers
and central bank heads from Argentina's dictatorship somehow managed to
get their jobs back under democracy. The New York Times praised Keyes as
"the country's ranking apostle of low-spending business-friendly
government."11 Until that point, Padayachee said, "we were still
buoyant, because, my God, this was a revolutionary struggle; at least
there'd be something to come out of it." When he learned that the
central bank and the treasury would be run by their old apartheid
bosses, it meant "everything would be lost in terms of economic
transformation." When I asked him whether he thought the negotiators
realized how much they had lost, after some hesitation, he replied,
"Frankly, no." It was simple horse-trading: "In the negotiations,
something had to be given, and our side gave those things---I'll give
you this, you give me that." From Padayachee's point of view, none of
this happened because of some grand betrayal on the part of ANC leaders
but simply because they were outmaneuvered on a series of issues that
seemed less than crucial at the time--- but turned out to hold South
Africa's lasting liberation in the balance.

What happened in those negotiations is that the ANC found itself caught
in a new kind of web, one made of arcane rules and regulations, all
designed to confine and constrain the power of elected leaders. As the
web descended on the country, only a few people even noticed it was
there, but when the new government came to power and tried to move
freely, to give its voters the tangible benefits of liberation they
expected and thought they had voted for, the strands of the web
tightened and the administration discovered that its powers were tightly
bound. Patrick Bond, who worked as an economic adviser in Mandela's
office during the first years of ANC rule, recalls that the in-house
quip was "Hey, we've got the state, where's the power?" As the new
government attempted to make tangible the dreams of the Freedom Charter,
it discovered that the power was elsewhere.

Want to redistribute land? Impossible---at the last minute, the
negotiators agreed to add a clause to the new constitution that protects
all private property, making land reform virtually impossible. Want to
create jobs for millions of unemployed workers? Can't---hundreds of
factories were actually about to close because the ANC had signed on to
the GATT, the precursor to the World Trade Organization, which made it
illegal to subsidize the auto plants and textile factories. Want to get
free AIDS drugs to the townships, where the disease is spreading with
terrifying speed? That violates an intellectual property rights
commitment under the WTO, which the ANC joined with no public debate as
a continuation of the GATT.

Need money to build more and larger houses for the poor and to bring
free electricity to the townships? Sorry---the budget is being eaten up
servicing the massive debt, passed on quietly by the apartheid
government. Print more money? Tell that to the apartheid-era head of the
central bank. Free water for all? Not likely. The World Bank, with its
large in-country contingent of economists, researchers and trainers (a
self-proclaimed "Knowledge Bank"), is making private-sector partnerships
the service norm. Want to impose currency controls to guard against wild
speculation? That would violate the $850 million IMF deal, signed,
conveniently enough, right before the elections. Raise the minimum wage
to close the apartheid income gap? Nope. The IMF deal promises "wage
restraint."12 And don't even think about ignoring these
commitments---any change will be regarded as evidence of dangerous
national untrustworthiness, a lack of commitment to "reform," an absence
of a "rules-based system." All of which will lead to currency crashes,
aid cuts and capital flight. The bottom line was that South Africa was
free but simultaneously captured; each one of these arcane acronyms
represented a different thread in the web that pinned down the limbs of
the new government.

A longtime antiapartheid activist, Rassool Snyman, described the trap to
me in stark terms. "They never freed us. They only took the chain from
around our neck and put it on our ankles." Yasmin Sooka, a prominent
South African human rights activist, told me that the transition "was
business saying, 'We'll keep everything and you [the ANC] will rule in
name. . . . You can have political power, you can have the façade of
governing, but the real governance will take place somewhere else.'
"(**)13 It was a process of infantilization that is common to so-called
transitional countries---new governments are, in effect, given the keys
to the house but not the combination to the safe.

Part of what I wanted to understand was how, after such an epic struggle
for freedom, any of this could have been allowed to happen. Not just how
the leaders of the liberation movement gave up the economic front, but
how the ANC's base---people who had already sacrificed so much---let
their leaders give it up. Why didn't the grassroots movement demand that
the ANC keep the promises of the Freedom Charter and rebel against the
concessions as they were being made? I put the question to William
Gumede, a third-generation ANC activist who, as a leader of the student
movement during the transition, was on the streets in those tumultuous
years. "Everyone was watching the political negotiations," he recalled,
referring to the de Klerk--Mandela summits. "And if people felt it
wasn't going well there would be mass protests. But when the economic
negotiators would report back, people thought it was technical; no one
was interested." This perception, he said, was encouraged by Mbeki, who
portrayed the talks as "administrative" and of no popular concern (much
like the Chileans with their "technified democracy"). As a result, he
told me, with great exasperation, "We missed it! We missed the real
story." Gumede, who today is one of South Africa's most respected
investigative journalists, says he came to understand that it was in
those "technical" meetings that the true future of his country was being
decided---though few understood it at the time. Like many people I spoke
with, Gumede reminded me that South Africa was very much on the brink of
civil war throughout the transition period---townships were being
terrorized by gangs who had been armed by the National Party, police
massacres were still taking place, leaders were still being assassinated
and there was constant talk of the country descending into a bloodbath.
"I was focusing on the politics---mass action, going to Bisho [site of a
definitive showdown between demonstrators and police], shouting, 'Those
guys must go!' " Gumede recalled. "But that was not the real
struggle---the real struggle was over economics. And I am disappointed
in myself for being so naive. I thought I was politically mature enough
to understand the issues. How did I miss this?" Since then, Gumede has
been making up for lost time. When we met, he was in the middle of a
national firestorm sparked by his new book, Thabo Mbeki and the Battle
for the Soul of the ANC. It is an exhaustive exposé of precisely how the
ANC negotiated away the country's economic sovereignty in those meetings
he was too busy to pay attention to at the time. "I wrote the book out
of anger," Gumede told me. "Anger at myself and at the party."

It's hard to see how the outcome could have been different. If
Padayachee is right and the ANC's own negotiators failed to grasp the
enormity of what they were bargaining away, what chance was there for
the movement's street fighters? During those key years when the deals
were being signed, South Africans were in a constant state of crisis,
ricocheting between the intense exuberance of watching Mandela walk free
and the rage of learning that Chris Hani, the younger militant many
hoped would succeed Mandela as leader, had been shot dead by a racist
assassin. Other than a handful of economists, nobody wanted to talk
about the independence of the central bank, a topic that works as a
powerful soporific even under normal circumstances.

Gumede points out that most people simply assumed that no matter what
compromises had to be made to get into power, they could be unmade once
the ANC was firmly in charge. "We were going to be the government---we
could fix it later," he said.

What ANC activists didn't understand at the time was that it was the
nature of democracy itself that was being altered in those negotiations,
changed so that---once the web of constraints had descended on their
country---there would effectively be no later.

In the first two years of ANC rule, the party still tried to use the
limited resources it had to make good on the promise of redistribution.
There was a flurry of public investment---more than a hundred thousand
homes were built for the poor, and millions were hooked up to water,
electricity and phone lines.14 But, in a familiar story, weighed down by
debt and under international pressure to privatize these services, the
government soon began raising prices. After a decade of ANC rule,
millions of people had been cut off from newly connected water and
electricity because they couldn't pay the bills.(***) At least 40
percent of the new phones lines were no longer in service by 2003.15 As
for the "banks, mines and monopoly industry" that Mandela had pledged to
nationalize, they remained firmly in the hands of the same four
white-owned megaconglomerates that also control 80 percent of the
Johannesburg Stock Exchange.16 In 2005, only 4 percent of the companies
listed on the exchange were owned or controlled by blacks.17 Seventy
percent of South Africa's land, in 2006, was still monopolized by
whites, who are just 10 percent of the population.18 Most distressingly,
the ANC government has spent far more time denying the severity of the
AIDS crisis than getting lifesaving drugs to the approximately 5 million
people infected with HIV, though there were, by early 2007, some
positive signs of progress.19 Perhaps the most striking statistic is
this one: since 1990, the year Mandela left prison, the average life
expectancy for South Africans has dropped by thirteen years.20
Underlying all these facts and figures is a fateful choice made by the
ANC after the leadership realized it had been outmaneuvered in the
economic negotiations.

At that point, the party could have attempted to launch a second
liberation movement and break free of the asphyxiating web that had been
spun during the transition. Or it could simply accept its restricted
power and embrace the new economic order. The ANC's leadership chose the
second option. Rather than making the centerpiece of its policy the
redistribution of wealth that was already in the country---the core of
the Freedom Charter on which it had been elected---the ANC, once it
became the government, accepted the dominant logic that its only hope
was to pursue new foreign investors who would create new wealth, the
benefits of which would trickle down to the poor. But for the
trickle-down model to have a hope of working, the ANC government had to
radically alter its behavior to make itself appealing to investors.

This was not an easy task, as Mandela had learned when he walked out of
prison. As soon as he was released, the South African stock market
collapsed in panic; South Africa's currency, the rand, dropped by 10
percent.21 A few weeks later, De Beers, the diamond corporation, moved
its headquarters from South Africa to Switzerland.22 This kind of
instant punishment from the markets would have been unimaginable three
decades earlier, when Mandela was first imprisoned. In the sixties, it
was unheard of for multinationals to switch nationalities on a whim and,
back then, the world money system was still firmly linked to the gold
standard. Now South Africa's currency had been stripped of controls,
trade barriers were down and most trading was short-term speculation.

Not only did the volatile market not like the idea of a liberated
Mandela, but just a few misplaced words from him or his fellow ANC
leaders could lead to an earth-shaking stampede by what the New York
Times columnist Thomas Friedman has aptly termed "the electronic
herd."23 The stampede that greeted Mandela's release was just the start
of what became a call-andresponse between the ANC leadership and the
financial markets---a shock dialogue that trained the party in the new
rules of the game. Every time a top party official said something that
hinted that the ominous Freedom Charter might still become policy, the
market responded with a shock, sending the rand into free fall. The
rules were simple and crude, the electronic equivalent of monosyllabic
grunts: justice---expensive, sell; status quo---good, buy.

When, shortly after his release, Mandela once again spoke out in favor
of nationalization at a private lunch with leading businessmen, "the
All-Gold Index plunged by 5 per cent."24 Even moves that seemed to have
nothing to do with the financial world but betrayed some latent
radicalism seemed to provoke a market jolt. When Trevor Manuel, an ANC
minister, called rugby in South Africa a "white minority game" because
its team was an all-white one, the rand took another hit.25 Of all the
constraints on the new government, it was the market that proved most
confining---and this, in a way, is the genius of unfettered capitalism:
it's self-enforcing. Once countries have opened themselves up to the
global market's temperamental moods, any departure from Chicago School
orthodoxy is instantly punished by traders in New York and London who
bet against the offending country's currency, causing a deeper crisis
and the need for more loans, with more conditions attached. Mandela
acknowledged the trap in 1997, telling the ANC's national conference,
"The very mobility of capital and the globalisation of the capital and
other markets, make it impossible for countries, for instance, to decide
national economic policy without regard to the likely response of these
markets."26

The person inside the ANC who seemed to understand how to make the
shocks stop was Thabo Mbeki, Mandela's right hand during his presidency
and soon to be his successor. Mbeki had spent many of his years of exile
in England, studying at the University of Sussex, then moving to London.
In the eighties, while the townships of his country were flooded with
tear gas, he was breathing in the fumes of Thatcherism. Of all the ANC
leaders, Mbeki was the one who mingled most easily with business
leaders, and before Mandela's release, he organized several secret
meetings with corporate executives who were afraid of the prospect of
black majority rule. In 1985, after a night of drinking Scotch with
Mbeki and a group of South African businesspeople at a Zambian game
lodge, Hugh Murray, the editor of a prestigious business magazine,
commented, "The ANC supremo has a remarkable ability to instill
confidence, even in the most fraught circumstances."27 Mbeki was
convinced that the key to getting the market to calm down was for the
ANC to instill that kind of clubby confidence on a much larger scale.

According to Gumede, Mbeki took on the role of free-market tutor within
the party. The beast of the market had been unleashed, Mbeki would
explain; there was no taming it, just feeding it what it craved: growth
and more growth.

So, rather than calling for the nationalization of the mines, Mandela
and Mbeki began meeting regularly with Harry Oppenheimer, former
chairman of the mining giants Anglo-American and De Beers, the economic
symbols of apartheid rule. Shortly after the 1994 election, they even
submitted the ANC's economic program to Oppenheimer for approval and
made several key revisions to address his concerns, as well as those of
other top industrialists.28 Hoping to avoid getting another shock from
the market, Mandela, in his first postelection interview as president,
carefully distanced himself from his previous statements favoring
nationalization. "In our economic policies . . . there is not a single
reference to things like nationalization, and this is not accidental,"
he said. "There is not a single slogan that will connect us with any
Marxist ideology."(****)29 The financial press offered steady
encouragement for this conversion: "Though the ANC still has a powerful
leftist wing," The Wall Street Journal observed, "Mr. Mandela has in
recent days sounded more like Margaret Thatcher than the socialist
revolutionary he was once thought to be."30

The memory of its radical past still clung to the ANC, and despite the
new government's best efforts to appear unthreatening, the market kept
inflicting its painful shocks: in a single month in 1996, the rand
dropped 20 percent, and the country continued to hemorrhage capital as
South Africa's jittery rich moved their money offshore.31 Mbeki
convinced Mandela that what was needed was a definitive break with the
past. The ANC needed a completely new economic plan--- something bold,
something shocking, something that would communicate, in the broad,
dramatic strokes the market understood, that the ANC was ready to
embrace the Washington Consensus.

As in Bolivia, where the shock therapy program was prepared with all the
secrecy of a covert military operation, in South Africa only a handful
of Mbeki's closest colleagues even knew that a new economic program was
in the works, one very different from the promises they had all made
during the 1994 elections. Of the people on the team, Gumede writes,
"all were sworn to secrecy and the entire process was shrouded in
deepest confidentiality lest the left wing get wind of Mbeki's plan."32
The economist Stephen Gelb, who took part in drafting the new program,
admitted that "this was 'reform from above' with a vengeance, taking to
an extreme the arguments in favour of insulation and autonomy of
policymakers from popular pressures."33 (This emphasis on secrecy and
insulation was particularly ironic given that, under the tyranny of
apartheid, the ANC had pulled off a remarkably open and participatory
process to come up with the Freedom Charter. Now, under a new order of
democracy, the party was opting to hide its economic plans from its own
caucus.) In June 1996, Mbeki unveiled the results: it was a neoliberal
shock therapy program for South Africa, calling for more privatization,
cutbacks to government spending, labor "flexibility," freer trade and
even looser controls on money flows. According to Gelb, its overriding
aim "was to signal to potential investors the government's (and
specifically the ANC's) commitment to the prevailing orthodoxy."34 To
make sure the message was loud and clear to traders in New York and
London, at the public launch of the plan, Mbeki quipped, "Just call me a
Thatcherite."35

Shock therapy is always a market performance---that is part of its
underlying theory. The stock market loves overhyped, highly managed
moments that send stock prices soaring, usually provided by an initial
public stock offering, the announcement of a huge merger or the hiring
of a celebrity CEO. When economists urge countries to announce a
sweeping shock therapy package, the advice is partially based on an
attempt to imitate this kind of high-drama market event and trigger a
stampede---but rather than selling an individual stock, they are selling
a country. The hoped-for response is "Buy Argentine stocks!" "Buy
Bolivian bonds!" A slower, more careful approach, on the other hand, may
be less brutal, but it deprives the market of these hype-bubbles, during
which the real money gets made. Shock therapy is always a significant
gamble, and in South Africa it didn't work: Mbeki's grand gesture failed
to attract long-term investment; it resulted only in speculative betting
that ended up devaluing the currency even further.


The Shock of the Base
"The new convert is always more zealous at these things. They want to
please even more," remarked the Durban-based writer Ashwin Desai when we
met to discuss his memories of the transition. Desai spent time in jail
during the liberation struggle, and he sees parallels between the
psychology in prisons and the ANC's behavior in government. In prison,
he said, "if you please the warden more, you get a better status. And
that logic obviously transposed itself into some of the things that
South African society did. They did want to somehow prove that they were
much better prisoners. Much more disciplined prisoners than other
countries, even." The ANC base, however, proved distinctly more
unruly---which created a need for yet more discipline. According to
Yasmin Sooka, one of the jurors on South Africa's Truth and
Reconciliation Commission, the discipline mentality reached into every
aspect of the transition---including the quest for justice. After
hearing years of testimony about torture, killings and disappearances,
the truth commission turned to the question of what kind of gestures
could begin to heal the injustices. Truth and forgiveness were
important, but so was compensation for the victims and their families.
It made little sense to ask the new government to make compensation
payouts, as these were not its crimes, and anything spent on reparations
for apartheid abuses was money not spent building homes and schools for
the poor in the newly liberated nation.

Some commissioners felt that multinational corporations that had
benefited from apartheid should be forced to pay reparations. In the end
the Truth and Reconciliation Commission made the modest recommendation
of a onetime 1 percent corporate tax to raise money for the victims,
what it called "a solidarity tax." Sooka expected support for this mild
recommendation from the ANC; instead, the government, then headed by
Mbeki, rejected any suggestion of corporate reparations or a solidarity
tax, fearing that it would send an antibusiness message to the market.
"The president decided not to hold business accountable," Sooka told me.
"It was that simple." In the end, the government put forward a fraction
of what had been requested, taking the money out of its own budget, as
the commissioners had feared.

South Africa's Truth and Reconciliation Commission is frequently held up
as a model of successful "peace building," exported to other conflict
zones from Sri Lanka to Afghanistan. But many of those who were directly
involved in the process are deeply ambivalent. When he unveiled the
final report in March 2003, the commission's chairman, Archbishop
Desmond Tutu, confronted journalists with freedom's unfinished business.
"Can you explain how a black person wakes up in a squalid ghetto today,
almost 10 years after freedom? Then he goes to work in town, which is
still largely white, in palatial homes. And at the end of the day, he
goes back home to squalor? I don't know why those people don't just say,
'To hell with peace. To hell with Tutu and the truth commission.' "36
Sooka, who now heads South Africa's Foundation for Human Rights, says
that she feels that although the hearings dealt with what she described
as "outward manifestations of apartheid such as torture, severe ill
treatment and disappearances," it left the economic system served by
those abuses "completely untouched"---an echo of the concerns about the
blindness of "human rights" expressed by Orlando Letelier three decades
earlier. If she had the process to do over again, Sooka said, "I would
do it completely differently.

I would look at the systems of apartheid---I would look at the question
of land, I would certainly look at the role of multinationals, I would
look at the role of the mining industry very, very closely because I
think that's the real sickness of South Africa. . . . I would look at
the systematic effects of the policies of apartheid, and I would devote
only one hearing to torture because I think when you focus on torture
and you don't look at what it was serving, that's when you start to do a
revision of the real history."


Reparations in Reverse
The fact that the ANC dismissed the Commission's call for corporate
reparations is particularly unfair, Sooka pointed out, because the
government continuesto pay the apartheid debt. In the first years
after the handover, it cost

the new government 30 billion rand annually (about $4.5 billion) in
servicing---a sum that provides a stark contrast with the paltry total
of $85 million that the government ultimately paid out to more than
nineteen thousand victims of apartheid killings and torture and their
families. Nelson Mandela has cited the debt burden as the single
greatest obstacle to keeping the promises of the Freedom Charter. "That
is 30 billion [rand] we did not have to build houses as we planned,
before we came into government, to make sure that our children go to the
best schools, that unemployment is properly addressed and that everybody
has the dignity of having a job, a decent income, of being able to
provide shelter to his beloved, to feed them. . . . We are limited by
the debt that we inherited."37 Despite Mandela's acknowledgment that
paying the apartheid bills has become a disfiguring burden, the party
has opposed all suggestions that it default.

The fear is that even though there is a strong legal case that the debts
are "odious," any move to default would make South Africa look
dangerously radical in the eyes of investors, thus provoking another
market shock.

Dennis Brutus, a longtime ANC member and a former prisoner on Robben
Island, ran directly into that wall of fear. In 1998, seeing the
financial stress the new government was under, he and a group of South
African activists decided that the best way they could support the
ongoing struggle was to start a "debt jubilee" movement. "I must say, I
was so naive," Brutus, now in his seventies, told me. "I expected that
the government would express appreciation to us, that the grass roots
are taking up the issue of debt, you know, that it would reinforce the
government taking up debt." To his astonishment, "the government
repudiated us and said, 'No, we don't accept your support.' "

What makes the ANC's decision to keep paying the debt so infuriating to
activists like Brutus is the tangible sacrifice made to meet each
payment. For instance, between 1997 and 2004, the South African
government sold eighteen state-owned firms, raising $4 billion, but
almost half the money went to servicing the debt.38 In other words, not
only did the ANC renege on Mandela's original pledge of "the
nationalisation of the mines, banks and monopoly industry" but because
of the debt, it was doing the opposite---selling off national assets to
make good on the debts of its oppressors.

Then there is the matter of where, precisely, the money is going. During
the transition negotiations, F. W. de Klerk's team demanded that all
civil servants be guaranteed their jobs even after the handover; those
who wanted to leave, they argued, should receive hefty lifelong
pensions. This was an extraordinary demand in a country with no social
safety net to speak of, yet it was one of several "technical" issues on
which the ANC ceded ground.39 The concession meant that the new ANC
government carried the cost of two governments---its own, and a shadow
white government that was out of power. Forty percent of the
government's annual debt payments go to the country's massive pension
fund. The vast majority of the beneficiaries are former apartheid
employees.(*****)40

In the end, South Africa has wound up with a twisted case of reparations
in reverse, with the white businesses that reaped enormous profits from
black labor during the apartheid years paying not a cent in reparations,
but the victims of apartheid continuing to send large paychecks to their
former victimizers. And how do they raise the money for this generosity?
By stripping the state of its assets through privatization---a modern
form of the very looting that the ANC had been so intent on avoiding
when it agreed to negotiations, hoping to prevent a repeat of
Mozambique. Unlike what happened in Mozambique, however, where civil
servants broke machinery, stuffed their pockets and then fled, in South
Africa the dismantling of the state and the pillaging of its coffers
continue to this day.

When I arrived in South Africa, the fiftieth anniversary of the signing
of the Freedom Charter was approaching, and the ANC had decided to mark
the event with a media spectacle. The plan was for Parliament to
relocate for the day from its usual commanding home in Cape Town to the
far more humble surroundings of Kliptown, where the charter was first
ratified. The South African president, Thabo Mbeki, was going to take
the occasion to rename Kliptown's main intersection the Walter Sisulu
Square of Dedication, after one of the ANC's most revered leaders. Mbeki
would also inaugurate a new Freedom Charter Monument, a brick tower in
which the words of the Charter had been engraved on stone tablets, and
light an eternal "flame of freedom." Adjacent to this building, work was
progressing on another monument, this one called the Freedom Towers, a
pavilion of black and white concrete pillars designed to symbolize the
charter's famous clause that says, "South Africa belongs to all those
who live in it, black and white."41 The overall message of the event was
hard to miss: fifty years ago, the party had promised to bring freedom
to South Africa and now it had delivered---it was the ANC's own "mission
accomplished" moment.

Yet there was something strange about the event. Kliptown---an
impoverished township with dilapidated shacks, raw sewage in the streets
and an unemployment rate of 72 percent, far higher than under
apartheid---seems more like a symbol of the Freedom Charter's broken
promises than an appropriate backdrop for such a slickly produced
celebration.42 As it turned out, the anniversary events were staged and
art-directed not by the ANC but by an odd entity called Blue IQ. Though
officially an arm of the provincial government, Blue IQ "operates in a
carefully constructed environment which makes it look and feel more like
a private sector company than a government department," according to its
very glossy, and very blue, brochure.

Its goal is to drum up new foreign investment in South Africa---part of
the ANC program of "re-distribution through growth." Blue IQ had
identified tourism as a major growth area for investment, and its market
research showed that for tourists visiting South Africa, a large part of
the attraction is the ANC's global reputation for having triumphed over
oppression. Hoping to build on this powerful draw, Blue IQ determined
that there was no better symbol of the South African triumphover-
adversity narrative than the Freedom Charter. With that in mind, it
launched a project to transform Kliptown into a Freedom Charter theme
park, "a world-class tourist destination and heritage site offering
local and international visitors a unique experience"---complete with
museum, a freedom-themed shopping mall and a glass-and-steel Freedom Hotel.

What is now a slum is set to be remade "into a desirous and prosperous"
Johannesburg suburb, while many of its current residents will be
relocated to slums in less historic locales.43 With its plans to rebrand
Kliptown, Blue IQ is following the free-market playbook---providing
incentives for business to invest, in the hope that it will create jobs
down the road. What sets this particular project apart is that, in
Kliptown, the foundation on which the entire trickle-down apparatus
rests is a fifty-year-old piece of paper that called for a distinctly
more direct road to poverty elimination. Redistribute the land so
millions can sustain themselves from it, demanded the framers of the
Freedom Charter, and take back the mines so the bounty can be used to
build houses and infrastructure and create jobs in the process. In other
words, cut out the middleman. Those ideas may sound like utopian
populism to many ears, but after so many failed experiments in Chicago
School orthodoxy, the real dreamers may be those who still believe that
a scheme like the Freedom Charter theme park, which provided handouts to
corporations while further disposessing the neediest people, will solve
the pressing health and economic problems for the 22 million South
Africans still living in poverty.44 After more than a decade since South
Africa made its decisive turn toward Thatcherism, the results of its
experiment in trickle-down justice are scandalous: . Since 1994, the
year the ANC took power, the number of people living on less than $1 a
day has doubled, from 2 million to 4 million in 2006.45

Between 1991 and 2002, the unemployment rate for black South Africans
more than doubled, from 23 percent to 48 percent.46 . Of South Africa's
35 million black citizens, only five thousand earn more than $60,000 a
year. The number of whites in that income bracket is twenty times
higher, and many earn far more than that amount.47 . The ANC government
has built 1.8 million homes, but in the meantime 2 million people have
lost their homes.48 . Close to 1 million people have been evicted from
farms in the first decade of democracy.49 Such evictions have meant that
the number of shack dwellers has grown by 50 percent. In 2006, more than
one in four South Africans lived in shacks located in informal
shantytowns, many without running water or electricity.50 Perhaps the
best measure of the betrayed promises of freedom is the way the Freedom
Charter is now regarded in different parts of South African society.

Not so long ago, the document represented the ultimate threat to white
privilege in the country; today it is embraced in business lounges and
gated communities as a statement of good intentions, at once flattering
and totally unthreatening, on a par with a flowery corporate code of
conduct. But in the townships where the document adopted in a field in
Kliptown was once electric with possibility, its promises are almost too
painful to contemplate. Many South Africans boycotted the
government-sponsored anniversary celebrations completely. "What is in
the Freedom Charter is very good," S'bu Zikode, a leader of Durban's
burgeoning shack dwellers' movement, told me. "But all I see is the
betrayal." In the end, the most persuasive argument for abandoning the
redistribution promises of the Freedom Charter was the least imaginative
one: everyone is doing it. Vishnu Padayachee summed up for me the
message that the ANC leadership was getting from the start from "Western
governments, the IMF and the World Bank. They would say, 'The world has
changed; none of that left stuff means anything anymore; this is the
only game in town.' " As Gumede writes, "It was an onslaught for which
the ANC was wholly unprepared.

Key economic leaders were regularly ferried to the head offices of
international organizations such as the World Bank and IMF, and during
1992 and 1993 several ANC staffers, some of whom had no economic
qualifications at all, took part in abbreviated executive training
programs at foreign business schools, investment banks, economic policy
think tanks and the World Bank, where they were 'fed a steady diet of
neo-liberal ideas.' It was a dizzying experience. Never before had a
government-in-waiting been so seduced by the international community."51
Mandela received a particularly intense dose of this elite form of
schoolyard peer pressure when he met with European leaders at the 1992
World Economic Forum in Davos. When he pointed out that South Africa
wanted to do nothing more radical than what Western Europe had done
under the Marshall Plan after the Second World War, the Dutch minister
of finance dismissed the parallel. "That was what we understood then.
But the economies of the world are interdependent. The process of
globalization is taking root. No economy can develop separately from the
economies of other countries."52

As leaders like Mandela traveled the globalization circuit, it was
pounded into them that even the most left-wing governments were
embracing the Washington Consensus: the Communists in Vietnam and China were doing it, and so were the trade unionists in Poland and the social democrats in Chile, finally free from Pinochet. Even Russians had seen the neoliberal light---at the time the ANC was in its heaviest
negotiations, Moscow was in the midst of a corporatist feeding frenzy, selling off its state assets to apparatchiks-turned-entrepreneurs as
fast as it could. If Moscow had given in, how could a raggedy band of freedom fighters in South Africa resist such a forceful global tide?
That, at least, was the message being peddled by the lawyers, economists and social workers who made up the rapidly expanding "transition"
industry--- the teams of experts who hop from war-torn country to crisis-racked city, regaling overwhelmed new politicians with the latest
best practice from Buenos Aires, the most inspiring success story from Warsaw, the most fearsome roar from the Asian Tigers. "Transitionologists" (as the NYU political scientist Stephen Cohen has called them) have a built-in advantage over the politicians they advise: they are a hypermobile class, while the leaders of liberation movements are inherently inward-looking.53

By their very nature, people spearheading intense national
transformations are narrowly focused on their own narratives and power
struggles, often unable to pay close attention to the world beyond their
borders. That's unfortunate, because if the ANC leadership had been able
to cut through the transitionology spin and find out for itself what was
really going on in Moscow, Warsaw, Buenos Aires and Seoul, it would have
seen a very different picture.

Footnotes to DEMOCRACY BORN IN CHAINS

* Milton Friedman often joked that if he had his way, central banks
would be based so purely on "economic science" that they would be run by
giant computers---no humans required.

** It was the Chicago Boys in Chile, fittingly, who pioneered this
process of democracy-proofing capitalism, or building what they called
"new democracy." In Chile, before handing over power to an elected
government after seventeen years of junta rule, the Chicago Boys rigged
the constitution and the courts so it was legally next to impossible to
reverse their revolutionary laws. They had many names for this process:
building a "technified democracy," a "protected democracy," or, as
Pinochet's young minister José Piñera put it, ensuring "insulation from
politics." Alvaro Bardón, Pinochet's undersecretary of the economy,
explained the classic Chicago School reasoning: "If we acknowledge
economics as a science, this immediately implies less power for
government or the political structure, since both lose responsibility
for making such decisions."

*** The question of whether more people have been cut off from new
services than connected to them is highly contested in South Africa. At
least one credible study has found that the cutoffs outnumber the
connections: the government says it has connected nine million people to
water; the study calculated ten million disconnections.

**** In fact, the ANC's official economic platform, on which it had been
elected, called for "increasing the public sector in strategic areas
through, for example, nationalisation." Then there was the Freedom
Charter, which continued to be the party's manifesto.

***** In fact, this one apartheid-era burden is simultaneously driving
the growth of the country's overall debt and putting billions of rand of
public money out of reach every year. A "technical" accounting change in
1989 switched the state pension fund from a "pay as you go" system, in
which benefits are paid from contributions made in any given year, to a
"fully funded" system, in which the fund has to have on hand enough
capital to pay out 70 to 80 percent of its total liabilities at any
given time---not a scenario it will ever face. As a result, the fund
ballooned from 30 billion rand in 1989 to more than 300 billion rand in
2004---certainly qualifying as a debt shock. What this means for South
Africans is that the huge pool of capital administered independently by
the pension fund has been cordoned off and placed out of reach for
spending on housing, health care or basic services. The pension
agreement was actually negotiated on the ANC side by Joe Slovo, the
legendary leader of the South African Communist Party, a fact that
continues to be a source of great resentment in the country today.

Endnotes to DEMOCRACY BORN IN CHAINS

1. "South Africa; Tutu Says Poverty, Aids Could Destabilise Nation,"
AllAfrica.com, November 2001.

2. Martin J. Murray, The Revolution Deferred (London: Verso, 1994), 12.

3. "ANC Leader Affirms Support for State Control of Industry," Times
(London), January 26, 1990.

4. Ismail Vadi, The Congress of the People and Freedom Charter Campaign,
foreword by Walter Sisulu (New Delhi: Sterling Publishers, 1995),
www.sahistory.org.za.

5. Nelson Mandela, A Long Walk to Freedom: The Autobiography of Nelson
Mandela (New York: Little, Brown and Company, 1994), 150.

6. "The Freedom Charter," adopted at the Congress of the People,
Kliptown, on June 26, 1955, www.anc.org.za.

7. William Mervin Gumede, Thabo Mbeki and the Battle for the Soul of the
ANC (Cape Town: Zebra Press, 2005), 219--20.

8. Mandela, A Long Walk to Freedom, 490--91.

9. Simple majority rule was actually delayed until 1999. Until then,
executive power was shared among all the political parties that won more
than 5 percent of the popular vote. Unpublished interview with Nelson
Mandela by the filmmaker Ben Cashdan, 2001; Hein Marais, South Africa:
Limits to Change: The Political Economy of Transition (Cape Town:
University of Cape Town Press, 2001), 91--92.

10. FOOTNOTE: Milton Friedman, "Milton Friedman---Banquet Speech," given
at the Nobel Banquet, December 10, 1976, www.nobelprize.org.

11. Bill Keller, "Can Both Wealth and Justice Flourish in a New South
Africa?" New York Times, May 9, 1994.

12. Mark Horton, "Role of Fiscal Policy in Stabilization and Poverty
Alleviation," in Post-Apartheid South Africa: The First Ten Years, ed.
Michael Nowak and Luca Antonio Ricci (Washington DC: International
Monetary Fund, 2005), 84.

13. FOOTNOTE: Juan Gabriel Valdés, Pinochet's Economists: The Chicago
School in Chile (Cambridge: Cambridge University Press, 1995), 31, 33,
quoting Pinochet's minister of economy Pablo Baraona's definition of the
"new democracy"; Robert Harvey, "Chile's Counter- Revolution: The Fight
Goes On," The Economist, February 2, 1980 (Harvey was quoting Sergio
Fernandez, the minister of the interior); José Piñera, "Wealth Through
Ownership: Creating Property Rights in Chilean Mining," Cato Journal 24,
no. 3 (Fall 2004): 298.

14. James Brew, "South Africa---Habitat: A Good Home Is Still Hard to
Own," Inter Press Service, March 11, 1997.

15. David McDonald, "Water: Attack the Problem Not the Data," Sunday
Independent (London), June 19, 2003.

16. Bill Keller, "Cracks in South Africa's White Monopolies," New York
Times, June 17, 1993.

17. Gumede cites Businessmap statistics asserting that "around 98
percent of executive directors of JSE-listed companies are white, and
they preside over 97 percent of the exchange's total value." Simon
Robinson, "The New Rand Lords," Time, April 25, 2005; Gumede, Thabo
Mbeki and the Battle for the Soul of the ANC, 220.

18. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 112.

19. Moyiga Nduru, "S. Africa: Politician Washed Anti-AIDS Efforts Down
the Drain," Inter Press Service, April 11, 2006.

20. "Study: AIDS Slashes SA's Life Expectancy," Mail & Guardian
(Johannesburg), December 11, 2006.

21. The rand recovered slightly by the end of the day, closing 7 percent
lower. Jim Jones, "Foreign Investors Take Fright at Hardline Stance,"
Financial Times (London), February 13, 1990.

22. Steven Mufson, "South Africa 1990," Foreign Affairs [Special
Edition: America and the World], 1990/1991.

23. Thomas L. Friedman, The Lexus and the Olive Branch (New York: Random
House, 2000), 113.

24. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 69.

25. Ibid., 85; "South Africa: Issues of Rugby and Race," The Economist,
August 24, 1996.

26. Nelson Mandela, "Report by the President of the ANC to the 50th
National Conference of the African National Congress," December 16, 1997.

27. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 33--39, 69.

28. Ibid., 79.

29. Marais, South Africa, 122. FOOTNOTE: ANC, Ready to Govern: ANC
Policy Guidelines for a Democratic South Africa Adopted at the National
Conference, May 28--31, 1992, www.anc.org.za.

30. Ken Wells, "U.S. Investment in South Africa Quickens," Wall Street
Journal, October 6, 1994.

31. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 88.

32. Ibid., 87.

33. Marais, South Africa, 162.

34. Ibid., 170.

35. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 89.

36. Ginger Thompson, "South African Commission Ends Its Work," New York
Times, March 22, 2003.

37. ANC, "The State and Social Transformation," discussion document,
November 1996, www.anc.org.za; Ginger Thompson, "South Africa to Pay
$3,900 to Each Family of Apartheid Victims," New York Times, April 16,
2003; Mandela unpublished interview with Cashdan, 2001.

38. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 108.

39. Ibid., 119.

40. South African Communist Party, "The Debt Debate: Confusion Heaped on
Confusion" November-December 1998, www.sacp.org.za; Jeff Rudin,
"Apartheid Debt: Questions and Answers," Alternative Information and
Development Centre, March 16, 1999, www.aidc.org.za. FOOTNOTE: Congress
of South Africa Trade Unions, "Submission on the Public Investment
Corporation Draft Bill," June 25, 2004, www.cosatu.org.za; Rudin,
"Apartheid Debt"; South African Communist Party, "The Debt Debate."

41. "The Freedom Charter."

42. Nomvula Mokonyane, "Budget Speech for 2005/06 Financial Year by MEC
for Housing in Gauteng," Speech made in the Guateng Legislature on June
13, 2005, www.info.gov.za.

43. Lucille Davie and Mary Alexander, "Kliptown and the Freedom
Charter," June 27, 2005, www.southafrica.info; Blue IQ, The Plan for a
Smart Province---Guateng.

44. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 215.

45. Scott Baldauf, "Class Struggle: South Africa's New, and Few, Black
Rich," Christian Science Monitor, October 31, 2006; "Human Development
Report 2006," United Nations Development Programme, www.undp.org.

46. "South Africa: The Statistics," Le Monde Diplomatique, September
2006; Michael Wines and Sharon LaFraniere, "Decade of Democracy Fills
Gaps in South Africa," New York Times, April 26, 2004.

47. Simon Robinson, "The New Rand Lords."

48. Michael Wines, "Shantytown Dwellers in South Africa Protest the
Sluggish Pace of Change," New York Times, December 25, 2005.

49. Mark Wegerif, Bev Russell and Irma Grundling, Summary of Key
Findings from the National Evictions Survey (Polokwane, South Africa:
Nkuzi Development Association, 2005), 7, www.nkuzi.org.za.

50. Wines, "Shantytown Dwellers in South Africa Protest . . ."

51. Gumede, Thabo Mbeki and the Battle for the Soul of the ANC, 72.
Internal quotation: Asghar Adelzadeh, "From the RDP to GEAR: The Gradual
Embracing of Neoliberalism in Economic Policy," Transformation 31, 1996.

52. Ibid., 70.

53. Stephen F. Cohen, Failed Crusade: America and the Tragedy of
Post-Communist Russia (New York: W. W. Norton & Company, 2001), 30.

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