Nationalisation just like the mini skirt

06 December 2011 - 18:13 By Abdul Milazi
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Microskirt Karmen_Pedaru
Microskirt Karmen_Pedaru
Image: CHRISTOPHER MACSURAK/ Wikipedia

Nationalisation, it seems, is as stubborn as one of the defining fashions of the 1960s - the miniskirt - you cannot keep it down.

Nationalisation, in the South African context, first appeared in the African National Congress’ Freedom Charter, adopted in 1955, only nine years before the iconic miniskirt made it’s global fashon debut in 1964.

Nationalisation was one of the major strategies advocated by socialists for a change  from capitalism to socialism, and has been synonymous with communism.

According to www.newadvent.org, the earliest operation of the communistic principle on record took place in ancient Crete about 1300 B.C.

As the story goes, in this country the citizens were education by the state and they all ate at the public tables. It is said that it was this experiment that moved Lycurgus to set up his celebrated regime in Sparta.

However, most modern forms of communism are based upon Marxism, an ideology founded by sociologist Karl Marx in the 1840s which gained support across much of Europe.

The Bolshevik Party, a communist party seized power during the Russian revolution in the early 20th century, and the Soviet Union was was born, the world’s first Marxist state.

Most communist regimes collapsed in the late 1980s and early 1990. They adopted capitalism, others choosing to remain partially communist, like China.

Today the only real communist governments are those of Cuba and Nepal, and the jury is still out on the former abandoning communism as Fidel Castro continues to ease his grip on power.

Like the miniskirt which has made several come-backs over the decades, nationalisation is back in vogue in South Africa, thanks to suspended ANC Youth League president Julius Malema and his “economic freedom” campaign.

The miniskirt always comes back new and improved, as it did after being overtaken by hipster trousers at the turn of the 21st century. It came back as the micro mini or microskirt, which is more an idea of a skirt than something to cover up one’s modesty. Nationalisation, on the other had comes as the same old ideology with no modifications whatsoever.

Owners of mining houses and banks are concerned with Malema’s call as he has stated clearly that there would be no compensation.

The issue of compensation to private owners during the nationalisation process has been an issue since the beginning, prompting united States secretary of state, to state during the 1938 Mexican nationalisation of the petroleum industry, that compensation should be "prompt, effective and adequate."

Like Malema has stated during his call for nationalisation in South Africa, developing countries who turn socialist usually argues that no compensation is due, based on the view that ownership of targeted assets was acquired through exploitation.

The United Nations  has rejected this view, and in 1962, the United Nations general assembly adopted Resolution 1803, which states that in the event of nationalisation, the owner "shall be paid appropriate compensation in accordance with international law."

Most of those who have been vocal against nationalisation have pointed out the following concerns:

The ANC continues to deny that nationalisation is one of its policies but its founding policy document, the Freedom Charter, still contain the clause: “The mineral wealth beneath the soil, the banks and monopoly industry shall be transferred to the ownership of the people as a whole.”

This is precisely why Malema is forcing the ANC senior leadership to put the issue back up for debate by its general membership.

When Nelson Mandela was released from prison in 1990, one of his first statements as a free man was: “Nationalisation is the policy of the ANC.” He knew that clause in the freedom charter cannot be wished away.

In accordance with the revised Mineral and Petroleum Resources Development Act introduced by the South African government in 2004, all mineral deposits are owned by the state as the representative of the people and not by the mining companies.

The illustrative value of almost R1 trillion attached to the mining industry exceeds the government debt of R900 billion. The total market capitalisation of mining companies listed on the Johannesburg Securities Exchange averaged about R1.5 trillion in the past year.

In the event of nationalisation, the future capital needs of the industry will have to be financed from the national budget. And if there aren’t sufficient funds in the national coffers, the industry will die a slow death, and thereby making the whole nationalisation process an exercise in futility.

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