Exclusively in the new print issue of CounterPunch
HOW MODERN MONEY WORKS — Economist Alan Nasser presents a slashing indictment of the vicious nature of finance capitalism; The Bio-Social Facts of American Capitalism: David Price excavates the racist anthropology of Earnest Hooten and his government allies; Is Zero-Tolerance Policing Worth More Chokehold Deaths? Martha Rosenberg and Robert Wilbur assay the deadly legacy of the Broken Windows theory of criminology; Gaming the White Man’s Money: Louis Proyect offers a short history of tribal casinos; Death by Incarceration: Troy Thomas reports from inside prison on the cruelty of life without parole sentences. Plus: Jeffrey St. Clair on how the murder of Michael Brown got lost in the media coverage; JoAnn Wypijewski on class warfare from Martinsburg to Ferguson; Mike Whitney on the coming stock market crash; Chris Floyd on DC’s Insane Clown Posse; Lee Ballinger on the warped nostalgia for the Alamo; and Nathaniel St. Clair on “Boyhood.”
How Western Elites Seeded Neoliberalism in the Post-Apartheid Regime

Foundations and the South African Transition

by JOAN ROELOFS

Apartheid, pioneered in the U.S. South, became generally unacceptable when idealistic statements such as the United Nations Declaration of Human Rights received worldwide respect. South Africa required deft treatment. United States public opinion would support “authoritarian” anti-communist dictators, but apartheid was unacceptable to many here, black and white.

Our allies faced the same moralistic pressures from their citizens, and Third World countries were critical of close United States-South Africa relations. Unfortunately for liberal reformers, the leading South African opposition to apartheid was the African National Congress (although banned and exiled for many years); its major component was the South African Communist Party. The ANC Freedom Charter of 1955 stated its goal of creating a multiracial socialist South Africa, with land and resources reverting to the people. Eschewing this rosy future, many whites left the country, emigrating to Commonwealth nations or South America. This may have strengthened racist elements in the destinations, but it eased the situation somewhat in South Africa; those remaining were not such hard-core separatists.

The challenge for the Western elite was to disconnect the socialist and anti-apartheid goals. Foundations, along with covert and overt allies, aided in this process, partly by framing the debate in the United States. In 1978 the Rockefeller Foundation convened an 11-person “Study Commission on U.S. Policy Toward Southern Africa,” chaired by Franklin Thomas, President of the Ford Foundation, and including Alan Pifer, President of the Carnegie Corporation of New York. Its mission “was to determine how the United States can best respond to the problems posed by South Africa and its dismaying system of racial separation and discrimination.” At the same time, it had to take into account the “full range of U.S. interests.”

The Commission had a large staff, and conducted extensive meetings in the U.S. with “representatives of civil rights, antiapartheid, religious, congressional, and student groups; university administrations, corporations, research and public policy institutes, and state and local governments; . . . and three former senior government officials: Henry Kissinger, Donald F. McHenry, and Cyrus Vance.” It traveled to South Africa and met with all elements throughout the country, and later conferred with interested parties in England, France, and West Germany.

The Commission’s Report, which became a major policy document in the U.S., concluded that there needed to be genuine sharing of political power, acceptable to all races. US strategic interests that must be protected included sea routes (for oil shipments); corporate investments; and access to minerals–not gold and diamonds–but chromium and ferrochrome, manganese and ferromanganese, platinum, and vanadium.

The Report warned of danger from the “growth of Soviet influence in the region, promoted by white intransigence in South Africa, growing political instability, rising levels of racial violence, and armed conflict.” It did not,  however, emphasize that the Communist Party, as a major partner in the ANC, was an internal threat to capitalism, rather than a “tool” of the USSR.  Soviet “philanthropy” was certainly helping the ANC, and was a major public relations benefit for the USSR vis a vis black Africa.

Among the Report’s recommendations was support for an arms and nuclear embargo. It advised against a general divestment process or economic sanctions. Corporations should be encouraged to improve black welfare and follow the Sullivan Principles, which was a pledge to promote equal opportunity in employment, decent pay, and human rights in general. At the same time, pressure should be put on the government to share power with blacks. U.S. private organizations were urged to “support organizations inside South Africa working for change, assist the development of black leadership, and promote black welfare.”

Foundations had been working for some time creating NGOs as alternatives to the liberation movement approach. The Ford Foundation promoted public interest law firms concerned with civil rights, which helped people to whom the apartheid laws were unfairly applied, and assisted black trade unions, especially those developing power in the mining industry. A Ford publication quotes Halton Cheadle, a partner in the largest human rights and labor law firm: “Only in unions have blacks had an opportunity to exercise democracy–the practice of electing your leadership and holding your leadership accountable.” It then notes: “Perhaps not coincidentally, the leader of the mineworkers union, Cyril Ramaphosa, was recently elected Secretary-General of the African National Congress, the nation’s oldest political party.”

Ford also gave grants to the South African Council of Churches, scholarships to enable blacks to become lawyers, and generally helped the moderate reformers. When the apartheid system finally collapsed, there were many human rights organizations in place to draft the new Constitution of 1996, which has a “state of the art” Bill of Rights. However, South Africa’s resource distribution has hardly been altered, socialism evaporated from the ANC leadership, and the new black governments are content to participate in the world market and its leadership institutions such as the World Economic Forum.

A South African scholar, Andrew Nash, has suggested that the ANC became a hegemonic force, which deflected or absorbed all criticism, arguing that there is no alternative to global capitalism. It used a “culture of human rights” to legitimate state power, and incorporated hierarchical tribal practices, harnessing the masses’ nostalgia “for a world in which personal ties of loyalty and obligation are not subsumed into commodity relations.” Furthermore, ANC leadership became increasingly comfortable and separate from the vast majority of impoverished citizens, as the black bourgeoisie settled into the previously white suburbs.

As in the 1960s U.S., “black power” was interpreted by some as “black capitalism.” Cyril Ramaphosa, the Ford democratic hero, headed a consortium of black investors that purchased “a large piece of the Anglo American Corporation” at discount prices.  Many such deals co-opted black leadership. They purchased support for the capitalist system in general, and also prevented the enactment of anti-business corruption legislation, as even The New York Times (September 1996) attested: “Black empowerment, South African style, has critics. Some say that in a nation where black unemployment is about 40 percent and laborers may earn $12 a day, the deals mainly enrich well-connected businessmen. Others call the deals cynical efforts by big business to buy the friendship of those in power.”

Joan Roelofs is Professor Emerita of Political Science, Keene State College, New Hampshire. She is the translator of Victor Considerant’s Principles of Socialism (Maisonneuve Press, 2006), and author of Foundations and Public Policy: The Mask of Pluralism (SUNY Press, 2003) and Greening Cities (Rowman and Littlefield, 1996). Web site: www.joanroelofs.wordpress.com On her site is the outline of an adult education course on “The Military-Industrial Complex,” with images, citations, and links. Contact: joan.roelofs@myfairpoint.net

This is an excerpt from Foundations and Public Policy: The Mask of Pluralism, SUNY Press, 2003.