The crisis in South Africa: Neoliberalism, Financialization and Uneven and Combined Development

Ashman, Sam; Fine, Ben and Newman, Susan (2011). The crisis in South Africa: Neoliberalism, Financialization and Uneven and Combined Development. Socialist Register, 47 pp. 174–195.



South Africa is now, ‘officially’, the most unequal society in the world – though there seems to be a macabre rivalry with Brazil for this status. The poorest 20 per cent of South Africans receive 1.6 per cent of total income while the richest 20 per cent benefit from 70 per cent according to the South African Government’s Development Indicators 2009. In the most recent United Nation’s Human Development Index of ‘wellbeing’, South Africa fell one place to 129th out of 182. Before the global economic crisis, South Africa had one of the highest unemployment rates in the world. It now officially stands at 35.4 per cent or one third of the workforce. The continuing relevance of Marx’s notion that capital generates and draws upon a reserve army of labour is surely demonstrated by South Africa, though Marx could not have foreseen its members would struggle to survive in the context of the highest levels of HIV infection in the world. This helps explain why, according to the UN, average life expectancy for South Africans is just 51.5 years, even though South Africa is classified as a middle income economy.

How are we to situate these and other developments within a broader analysis of the political economy of South Africa since the defeat of apartheid? We argue that it is necessary to examine the specific form that neoliberalism and financialization have taken in the region, and how wider changes in the world economy and capitalist development have interacted with the legacy of the apartheid past. Global accumulation and its shifts and restructuring are necessarily mediated by the structure of particular economies and forms of class rule. We characterize the system of accumulation in South Africa as a ‘Minerals-Energy Complex’ (MEC) where accumulation has been and remains dominated by and dependent upon a cluster of industries, heavily promoted by the state, around mining and energy – raw and semi-processed mineral products, gold, diamond, platinum and steel, coal, iron and aluminium.

In the context of South African production, financialization has produced a particular combination of short-term capital inflows (accompanied by rising consumer debt largely spent on luxury items) and a massive long-term outflow of capital as major ‘domestic’ corporations have chosen offshore listing and to internationalize their operations while concentrating within South Africa on core profitable MEC sectors. The result, even before the impact of the current crisis, was a jobless form of growth and the persistence of mass poverty for the majority alongside rising living standards for a small minority, including new black elites.

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