Profiting from Poverty in South Africa

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At a rally during the recent local government elections in South Africa, the Secretary General of the African National Congress told a crowd that the party was ‘relieving men’ who couldn’t take care of their children by providing their families with child support grants. The ANC, he told them, was the only party that raised their children because fathers were failing to do so. Currently the state provides families and primary caregivers with R350 per child, per month provided that household income is below a certain threshold.

Every month around 16.8 million social grants are deposited into the accounts of around 10 million South Africans. Of these 11.9 million receive child support grants, 96% of which are women. These grants reach a large swathe of the population, with some 44% of households receiving at least one grant. Delivered by the South African Social Security Agency (SASSA) social grants have been crucial in the government’s fight against extreme poverty. South Africa spends over 4% of its GDP on social welfare, which is higher than countries like Brazil and Egypt but lower than Algeria and Malawi. SASSA is mandated to provide grants to those who are vulnerable to poverty and in need of state support, this includes pensioners, those with disabilities, guardians of foster children and military veterans. Despite warnings that social grants are too costly for government, amounts have been expanded and there is currently discussion of extending the child support grant to 23 due to the high number of child-headed households.

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Disordering the World: the Rise of Neo-Liberalism

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Photo from Age of Extremes cover | CC BY 2.0

In his melancholic book, Age of Extremes: the Short Twentieth Century 1914-1991 (1995), British historian Eric Hobsbawm states: “The history of the twenty years after 1973 is that of a world which lost its bearings and slid into instability and crisis” (p. 403). American historian Tony Judt (Postwar: a History of Europe Since 1945 (2005) captures a widely expressed sentiment: “After 1945-75, Western Europe’s ‘thirty glorious years’ gave way to an age of monetary inflation and declining growth rates, accompanied by widespread unemployment and social discontent (p. 455). Hobsbawm thinks that it was only in the 1980s that it became clear that the “golden age” of the social welfare state had crumbled and disintegrated.

In the 1970s and 1980s something new and threatening to human solidarity and well-being was wresting itself free of service to the common good and undermining the “principle of oneness.” Its name was Neo-liberalism, the mighty Moloch to whom all must surrender. It also became undeniable that the “global nature” of the crisis was being uneasily recognized. One part of the world—the USSR and E. Europe—had collapsed entirely. And in Africa, West Asia, Latin America the growth of the GDP ceased as a severe depression settled in the lands like an unwanted damp fog. But from the corporate elite’s towering vantage-point, western economies seemed to be thriving even if millions of individuals weren’t.

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Reflections on Nelson Mandela and the ANC

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Since Nelson Mandela’s death, thousands of articles and millions of people have paid tribute to him. They have rightly praised him for his stance against the apartheid state, which saw him spend 27 years in prison, his non-racialism, and his contribution to the struggle in South Africa. For much of his life Nelson Mandela was indeed the most prominent figure in the liberation struggles in Africa that were waged in the 1960s, 1970s and 1980s.

For the millions of people that were involved in the struggle against apartheid – and specifically large sections of the black working class that spearheaded it – Nelson Mandela, therefore, became a symbol that they drew inspiration from, particularly in the 1980s. As a matter of fact, it was the black working class through struggle that tore down many features of apartheid by the late 1980s, such as the pass law system, Group Areas and other odious laws, and for many of the comrades involved Nelson Mandela was very much a hero. It was through the energy of large sections of the working class that Mandela too was eventually freed: indeed, by 1990 mass mobilisation by millions of workers and the poor ensured that the anti-apartheid veteran was released. 

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The Crisis, Bailouts, Quantitative Easing, Tapering and Class War

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Since 2009 the US state has been undertaking Quantitative Easing (QE), which has involved the US state creating $ 85 billion a month, effectively electronically printing money out of thin air, and linking this to the “purchasing” of paper assets like US government bonds and also more importantly mortgaged backed securities from banks, hedge funds, private equity firms, and asset management companies, which lost their value when the capitalist crisis hit hard in 2008. Through this, these financial institutions and banks have been given up to $ 85 billion a month for the last five years. Much of this money has been used by these corporations to increase their speculative activity, including speculating on government bonds sold by the likes of the South African, Brazilian, Argentinean, and Turkish states. Now the US state has been looking to start tapering QE and speculators as a result are exiting these government bond markets. As this article explores it will probably not be the ruling class (capitalists and top state officials) that suffer the worst convulsions associated with tapering, although they may be affected, but the working class in countries such as South Africa, Brazil, Indonesia, India, Argentina and Turkey. This article examines why and how this could take place, how ruling classes from different countries are trying to protect themselves; and why and how the working class will in all likelihood be worst hit. In order to, however, understand how the class war around QE is unfolding it is important first to look at the role states have played during the crisis, along with the competition that exists between states.

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