The Legacy of Marikana

The events at the Lonmin Mine in Marikana will go down in the history of the New South Africa as a turning point.  They started with an unprotected strike, developed to a war between the striking miners and the Police, an abortive charge of murder against the striking miners with an humiliating back-down by the Prosecutor, the declaration of a state of emergency and the deployment of a thousand soldiers to keep the peace, and culminated in the agreement of Lonmin to a 22% wage increase.

In the cold light of reason, these events must be viewed as one of the lowest points in the eighteen-year history of the new democracy.  Their results are likely to cast a long shadow.

The precedent established by the rockdrill operators, of making huge wage increase demands in the process of an illegal strike has already resulted in several other similar demands by other miners, and there can be no doubt that those demands will be at least partially successful.  There are very few alternative outcomes to this event.  Either the total wage costs of the mine must be adjusted downwards, by the reduction of the ‘bloated salaries of the mine bosses’ (an extremely unlikely event!), by the cutting of other, non-wage, costs, or by increasing the income of the mine.  The latter two results are likely. 

Over the next few years, there can be no doubt that all mines presently or potentially subject to huge wage demands, reinforced by violent militancy, will be doing everything in their power to reduce their dependence on labour.  They will increase the level of automation.  The numbers of employed at the mines will come down, and the numbers of unemployed will increase.  The lessons learned from the Marikana events will also be learned by other employers, who will join the rush to automation and de-labouring.  The lessons will also be learned by other workers.  An illegal strike, accompanied by violent demonstrations and the murder of employees who wish to honour their employment contracts and continue to work to feed their families, has been shown very clearly to bring results, and the pattern will be followed, on mines, in Government, in industry, wherever large numbers of workers are employed.  The precarious peace that existed between the providers of labour and the providers of capital has become even less stable. 

The actions of the Police in shooting at ‘defenceless’ miners has demonstrated that the organs of law enforcement in the country are not only powerless, they are incompetent to maintain the rule of law.  This situation has been noted by potential investors abroad, as well as at home, and the result has been that South Africa has dropped even further down the ladder in the competition against the numerous other countries seeking foreign investment.  Personal experience indicates that even the possible investors who were considering South Africa as a location for a new industrial, labour-creating, investment are revising their views.  It appears that the country is working hard to attract only those investors who have no choice!  Neither the labour force nor the Government appears to understand that there are over forty possible investment destinations for new industrial establishment.  The flip-flop of the Government in the investment by Walmart set a low point in the country’s attractiveness to such investment, eclipsing even the ‘quiet diplomacy’ that thinly covered the Government’s support for the policies of Robert Mugabe.  The apparently total inability of the Government to maintain law and order sends a clear signal to the world – if you want a safe investment, do not come to South Africa! 

This situation was exacerbated by the charging of the mass of miners with murder, and the rushed withdrawal of the charge in response to public opinion.  The lesson?  Mass protest against the application of a standing law in support of labour will force the organs of State to back down! 

The public pronouncements by numerous ‘dignitaries’, from Church leaders to politicians to Trade Unionists, totally ignored the fact that the people charged had been party to violent action over a period of more than a week, resulting in the deaths of at least ten persons at their hands!  The actions of the miners in going to meeting after meeting, armed (including with pistols taken from murdered Policemen!) and with the clear intention of using those arms, could not under any circumstances have been construed as a civilised method of demonstrating dissatisfaction with their wages or working conditions. 

Sociologists immediately pointed to the ‘poor living conditions’ of the miners, who lived in shacks, even though they were paid a ‘living-out allowance’ to cover the cost of providing housing for themselves.  Of course, anyone must have sympathy for those living in the sub-human existence of the shack dweller.  However, to some extent, that condition is self-inflicted.  Unfortunately, it has become an item of faith that anyone who puts himself into such a condition becomes entitled to demand that the remedy is provided by the tax-payer or the employer. 

The declaration of a state of emergency was a clear admission by the Police and the Government that it had lost control of a part of the country.  During the Mandela years, such an admission would have been frightening, horrifying.  Today, under President Zuma (who recently declared in Europe that South Africa is a country operating well under normal democratic principles!), the country is rushing towards anarchy.  Concerned citizens are starting to realise that a collapse of the rule of law, of normal civilised principles and conditions, is no longer a distant possibility, it is starting to appear to be a probable outcome.  It appears probable that this state will become more likely as the effects of the Lonmin fiasco work through the economy.

The demonstration that violence begets benefit will certainly result in high wage demands.  In the face of the real world, which dictates the price that it will pay for the products produced by South Africa, the producers who have to pay the increased wages will become less competitive, reducing their labour force.  That will not be enough.  The reducing exports will result in lower exports at higher costs, with the result that the foreign exchange generation will drop off, reducing the strength of the currency.  Over time, this effect will probably bring about some recovery in exports, but the effect of this will be a higher cost of imports, as has been shown so clearly by the escalating fuel price.  Inflation will rise, making the poor poorer, and a new flood of displaced workers will join the ranks of the poor.  The Government will be faced with the necessity of providing increased financial and other support to the poor, while suffering from a declining revenue flow.  The perfect storm is looming on the horizon, but those at the helm are not paying heed to the forecasters!

There can be no doubt that the results of the Marikana incident will be with us for many years.  There can equally be no doubt that the ANC Government, under the leadership of Jacob Zuma is not up to the task.  Given the abjectly poor performance of the ANC in governing the country over the past years, the extremely high level of corruption, the failure of policy after policy, the continuing decline of the country as an investment destination, there must be doubt that the ANC is capable of governing at all!  

If we believed that the past eighteen years were tough, wait to see the next eighteen years!