Elites and economic policy in South Africa’s transition and beyond

ABSTRACTWe build on and critique previous literature on economic policy configuration during the transition from apartheid to democracy (1990 to 1994) in South Africa (SA). The contribution of this article, and our critique of much influential literature on economic policy formation during the transition, is that the powerful corporate elites were not just stakeholders in negotiations between the apartheid government, the African National Congress (ANC) and other parties. We adopt a structural approach that highlights the crucial role of corporate elites and their active manoeuvring to manage and control economic policymaking during the transition to ensure continuity of the ostensibly free market economic policies they designed during the late-apartheid period. The complicity of the economic leadership of the ANC in squashing progressive economic transformation horizons is directly connected to the survival and institutionalisation in the present of late-apartheid neoliberalised economic policy. Ultimately, the corporate elite’s exertion of their state-expanded powers, their co-option of selected members of the black political elite and the ANC’s economic policy self-emasculation has further strengthened multinational corporations’ domination of SA’s markets, which were already highly concentrated, and limited present and future possibilities for inclusive development of the SA economy.KEYWORDS: Apartheidtransitioncorporate eliteseconomic liberalisationdemocratic consolidation Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1. The ANC-commissioned Making Democracy Work (1993) is informed by structuralist and post-Keynesian approaches to economic policy wherein demand and under-full employment are key problems. The growth driver proposed is state-led social and infrastructure investment that crowds im and is followed by private sector investment (Padayachee Citation1998, 438–439).2. Teixeira and Halpin (Citation2011) discuss progressive economics, and Padayachee and Fine (Citation2019) details associated policies and for a discussion of progressive macroeconomic policy and its of relevance to South Africa3. The is both a description and an analytical framework for understanding the evolution of SA’s system of accumulation (Fine and Rustomjee Citation1996).4. The term ‘free market’is not about reducing the role of the state. Without laws, policies, security and courts, market freedom is neither possible nor guaranteed (Fine and Saad-Filho Citation2017, 694–695). In the neoliberal frame, the free market entails redirection and transformation of the control and role of the state in social and economic reproduction. Macroecomic policies are aligned to the prescripts of both the Washington and Wall Street Consensus (Hickel Citation2021).5. The GNU ruled from April 1994 to February 1997.6. For a useful summary of the consequences, see Padayachee and Van Niekerk (Citation2019, 230–233).7. Teixeira and Halpin (Citation2011) discuss progressive economics, and Padayachee and Fine (Citation2019) details associated policies for of progressive macroeconomic policy and its relevance to SA. For a more general discussion of progressive economics see (Teixeira and Halpin (Citation2011).8. With full control of the NP in the 1970s, P.W. Botha created an ‘imperial presidency’ - no longer accountable to cabinet – that subordinated ‘all sectors of society, public and private alike’ to the national security state paradigm of the securocrats (O’Malley, Citationnd). Botha rationalised state structures, creating numerous cabinet committees, under the command of the new State Security Council. The Council presided over a national security management system, responsible for the co-ordination of ‘all aspects of government policy’ – ‘everything deemed connected to the security of the state now fell under its purview from foreign policy to the price of bread’ ((O’Malley, Citationnd). In late 1977, a secret committee, comprising senior military officials and business leaders, was convened ‘“to understand the other’s needs”’ (Minter Citation1986, 286–287, original emphasis). The thirteen-man Defence Advisory Council later established brought together Afrikaner and English speaking business leader (Minter Citation1986, 287).9. The relationship between the western powers and the elites of SA’s large corporations during the intensification of the Cold War in southern Africa deserves lengthy discussion. The Carlton and Goodhope Conferences institutionalised the partnership between Botha, his securocrats and corporate elites. The corporate elites shared close ties with western governments whom they viewed as key allies in the southern Africa's Cold War. The election of Jimmy Carter to President of the USA (1977 to 1981) provided a boost to SA’s corporate elites. The Carter administration was against escalating sanctions against SA but launched a ‘serious reform initiative’ (Minter Citation1986, 281–282). At this time, the USA’s ambassador to the United Nations, Andrew Young, was in contact with Harry Oppenheimer. They opposed economic sanctions, and publicly declared that businesses acting together could end apartheid (Minter Citation1986, 282; Young, Citation2017: 169–70). In May 1977, Oppenheimer invited Young to address the South African Chamber of Commerce and to reside in his home. After the SA visit, Young met with ‘African leaders’ in Mozambique and secured agreement on the Carter’s administration’s southern African plans to arrest the ‘communist scouge in Africa’ (Young, Citation2017: 171). The positive responses from Oppenheimer and the SA business sector, encouraged President Carter to proceed with their plans. The Carter administration entered into ‘aggressive partnerships’ with the ‘frontline states’ -– -neighbouring countries who provided the ANC military training sites and served as launching pads to infiltrate SA (O’Malley, nd.) – to mediate between business people and freedom fighters (Young, Citation2017: 171). In November 1979, P.W.Botha, at the Carlton Conference, launched the Constellation of Southern African States (CONSAS), an organisation aimed at re-establishing the dominance of the apartheid state and its partners in big business in the southern African region.10. In their management of the transition, the concerns of the business elites of the MEC and finance conglomerates (that controlled most of the economy) extended beyond politically influential ANC leaders. The elites were also uneasy about other wealthy (usually white) South African businesspeople and individuals exploiting opportunities presented by patronage of politically connected individuals. Spicer and his Anglo colleagues worried that opportunistic patronage of the latter type could create negative perceptions, particularly amongst the constituency of the ANC and its allies, that could undermine the strategic long-game of the conglomerates in the relationships they had been nurturing with certain ANC leaders. Spicer, referring to influential ANC and other liberation movement leaders, told Du Toit (2022: 96), “We had people who had nothing, and they’ve got large families, and then they see how others are living who have been here and built up capital, and then they say we should be on that level, and why aren’t we?” Many ANC leaders very quickly developed close relationships with wealthy businesspeople during the transition. For example, Douw Steyn, the insurance and real estate magnate, housed Mandela in his mansion after his divorce from Winnie Mandela in 1990. Steyn later built a villa for Mandela and Graca Machel on his private game reserve. According to Bantu Holomisa, former head of the Transkei Bantustan, Thabo Mbeki’s lavish fiftieth birthday party, in 1992, was sponsored by Sol Kerzner, the casino magnate, who allegedly in exchange wanted assistance to quash his corruption trial in the Transkei (Brummer Citation1996).11. Tito Mboweni would later be appointed labour minister and governor of the SARB by Mandela and finance minister by Ramaphosa.12. By 1980, Anglo was the largest foreign investing company in the US, larger than Volkswagen and British Petroleum (Innes Citation1984). The importance of South African big business within the Carter administration’s Cold War plans for the southern African region is discussed in endnote 9.13. Government’s acceptance of the NEF was facilitated by Keys, arguably more comfortable engaging with popular organisations than a regular NP politician. While tripartism was a landmark the the ‘politics of economic policy formulation’, there was no engagement with policy itself, especially monetary and exchange rate policy’ (Gelb Citation1999, 11).