The devil in nationalisation

Will the creation of a state-owned mining company - apparently now agreed between government, unions and miners - satisfy or head off demands for wholesale nationalisation of the mines from the likes of Julius Malema?

A 16th-century French epigram - very loosely translated, "If youth only understood; if old age only could" - has echoes for today's South Africa.

Here we are with a government publicly opposed to nationalisation, busy enriching a favoured few while mismanaging the country and gainsaying pearls of wisdom from Malema's lips.

There is a striking difference between President Jacob Zuma and Malema. Zuma trots off to Harare to try to change the ways of Robert Mugabe or, at least, to encourage some sort of dialogue between Zimbabwe's power elite and the representatives of the last election's majority party.

In contrast, Malema heads north of the Limpopo river to learn, his spin doctors say, how Harare's mine and land redistribution policies have benefited Zimbabwe's people.

In Zimbabwe, farmland has been recovered from former colonial masters. In South Africa, land reform is a shambles and Malema is publicly endorsing the Mugabe approach which brooks no opposition.

Of course Malema's reactionary detractors claim that nationalisation of the mines or anything else for that matter is "a bad thing". They often point to events in Zambia after the 1969 start to nationalisation of Anglo American's and Selection Trust's copper mines. Copper production peaked at 750000 tons in 1973 and then went into decline. By the turn of the century annual production was a mere 275000 tons, a fall of more than three-fifths in less than 30 years.

This goes to show how incompetent state ownership can be, does it not? Worse, Anglo was externalising the payments for its copper mines to build the foundations of its international operations. Worse still, Zambia is now returning its copper sector to private hands.

Let's see how well private-sector mining performed in this time. In South Africa, gold production by the country's private-sector mines reached a record 1000 tons in 1970. By 2000, production was down to 428 tons, a fall of almost three-fifths. By 2009, production had dropped to 205 tons. Not much of a difference between private and public ownership it seems - something Malema might note.

"The devil can cite scripture for his own purpose" - and anyone can selectively use statistics to prove a point. If Malema is to gain greater credibility for his nationalisation calls, he should explain just what benefits might be expected from the state taking hold of those vast swathes of industry and business that the people don't yet own.

Look at what happened in Britain when the coal industry was nationalised in 1947. Employment on the collieries, which had fallen from its 1920 peak of 1.25 million miners to 700000 in 1947, levelled out for 10 years. In the '50s, mechanisation and competent management had turned Britain's colliers into the world's most efficient measured in tons of coal per worker shift. In the 10 years after World War 2 - essentially the first decade of state ownership - Britain's annual coal production rose from 180 million tons to 230 million. And the National Coal Board did not enjoy the benefits of having ruling party cadres deployed at the pit head or on mahogany row.

Mind you, after the mid-'50s Britain's coal production resumed its longer-term decline, dropping to less than 50 million tons and 20000 colliers in 1994 when John Major's government started to privatise.

Employment conditions? In World War 2, Britain's miners struck against capitalist colliery owners and in 1984 they brought the state-owned industry to a halt. They were striking against the British people - the people owned the mines didn't they?

Compare the British behaviour to the class solidarity and concomitant industrial peace of Stalin's Soviet Union or Mao's Chinese workers' paradise. In the USSR, encouraged by party apparatchiks deployed to oversee the mines, coal miners strove manfully to match the productivity examples set by the heroic Grigorevich Stakhanov.

Heavens above, in South Africa even the communists have turned away from state ownership and stoop to criticising Malema and his proposals that have so upset the greybeards. Have they forgotten their movement's glorious history of achievement? Have they forgotten how the collapse of state ownership under the leadership of the proletariat has merely enriched a few oligarchs and party cadres who grabbed state-owned assets.

Still, in South Africa there are now moves afoot among black empowerment opportunists to transfer more of the mining industry into the hands of the previously disadvantaged.

Some protagonists of transformation believe it is not good enough that mineral rights were transferred without compensation from private hands to those of the people, represented, naturally, by an omniscient ruling party. Nor, some young black empowerment opportunity spotters believe, is transfer of participation in individual mines to employees and local communities good enough. Their new call is for absolute control of listed mining companies by the state or by some of the previously disadvantaged - starting with the platinum sector. Malema is not alone.

Thank goodness not all of the politically influential South Africans oppose Malema. Maybe he was misrepresented, but we've even had the multimillionaire mining magnate and ANC financial backer Patrice Motsepe publicly endorsing nationalisation. Just a year ago Motsepe and others were starting to suffer the first-hand experience of having to close such facilities as the ferrochrome smelters that beneficiate the nation's raw ores. Might things have been different under state ownership?

Perhaps some of the new mining magnates believe state ownership will keep the mines open and prevent job losses. Perhaps they and others also believe pigs might sprout wings and fly. Am I getting something wrong somewhere?