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The Struggle is to Socialise Eskom

The Struggle is to Socialise Eskom

Jeff Rudin | Amandla! 63 | April/May 2019

Abahlali baseMjondolo’s Mqapheli Bonono holds a paraffin stove after a shack fire. Only a company accountable only to its own narrow concerns would simultaneously complain about having surplus electricity capacity and be indifferent to the deaths and destruction caused by fires in homes without electricity.

When Ramaphosa confirmed the break-up of Eskom, the Numsa General Secretary responded with a fighting tweet:

“Numsa shall meet Cyril Ramaphosa in the street. We reject this breaking up of Eskom as it is nothing but the first phase to privatise Eskom.”

Admirable militancy, but is it too late?  Eskom has long since been privatised in almost every way, other than in name.  Today’s struggle is different. It is to socialise Eskom as an integrated public utility. Its mandate must be to provide universal and cheap electricity, for both domestic and economic purposes, while also being friendly to the health of both people and the environment. 

Monopoly: a red herring

There are those who argue against this because it sustains a monopoly. But this argument is a red herring, despite all the attention it attracts.  This is so for two reasons:

  1. As a result of free competition’s profit maximising dynamic, bankruptcies, acquisitions and mergers are standard characteristics of competitive capitalism.  Allow enough time for these everyday events to work themselves through the market and monopoly ends up being the natural state of capitalism. 

Permitting a competitor to Eskom would fill in a missing element to full privatisation. But the result will be the eventual demise/takeover of either Eskom or the competitor or the survival of both in what would then be a market rigged to promote their shared interests in maximising their profits.  The axiom that competition reduces price serves only as ideological mystification in monopoly dominated markets.  SA’s banks are proof of this.

  • A single, state-owned monopoly, even in a capitalist economy, is sometimes the most rational, cost effective and least wasteful way of meeting society’s needs.
“Surplus” electricity

When not periodically blackmailing the country with electricity blackouts, Eskom claims to be burdened by surplus electricity.  Surplus, in this instance, is not a measure of need but of ability to pay.  Millions of people are still without electricity.  Millions more can’t afford the electricity to which they have “access”.  Faced with this reality, only a company operating within the norms of capitalism would dare to claim that it has a “surplus” problem.  Moreover, only a company accountable to its own narrow concerns would simultaneously complain about having surplus electricity capacity and be indifferent to the deaths and destructions caused by fires in homes without electricity.  Only a company burdened by too much electricity but with no social responsibility would similarly be indifferent to the health hazards – the deaths, illnesses and lost productivity – suffered by households compelled to use non-electric energy sources for heating, cooking and lighting. 

When not periodically blackmailing the country with electricity blackouts, Eskom claims to be burdened by surplus electricity.

An alternative, socialised Eskom would not only use the bonus of surplus electricity to meet desperate social need. In the process of doing so, it wold also create a large number of jobs in a country notorious for its normalised level of mass unemployment. 

Eskom’s hostility to renewable energy

Functioning like a private company explains another Eskom anomaly:  its hostility to renewable energy.  The cheapest (new) electricity is now from renewable energy.  Renewable energy is also the safest to produce and the easiest to supply to remote rural areas.  Renewable energy, with a suitably protected local manufacturing base, has the added potential of creating jobs: some 250,000 jobs according to research by the One Million Climate Jobs Campaign.  Like other electricity utilities in the world, Eskom should have embraced renewable energy as its primary energy source.  As a properly socialised monopoly supplier of electricity, it would also have taken the lead in giving meaning to what is still the hollow concept of a Just Transition – it would have by now agreed alternatives for the workers who would unavoidably lose their jobs. 

Another no brainer to save costs being incurred by a government so cash-strapped that it has had to increase VAT – cancel Kusile’s Units 5 & 6, and close earlier than planned three of the existing coal-fired power stations. These measures would save between R15 and R17 billion, without affecting security of supply.  But these steps are based on the greatly enhanced use of renewable energy.  This alone makes them a no-no for Eskom.

And, so far absent from all these considerations, is – climate change:  recognised by (virtually) all the countries of world as the single greatest threat to the survival of humankind.  Coal is South Africa’s largest single contributor to climate change, by far.  Eskom and coal are as joined together as fish and chips, with BEE now part of that mix.  Like other shareholding companies fearful of stranded assets, coal remains king as far as Eskom is concerned.  Like other (private) companies worldwide, Eskom sees its first duty as being to itself.  That this contributes to humanity’s long climate change suicide is … unfortunate.

BEE

One of the reasons for Eskom’s hostility to renewable energy is BEE.  Eskom’s support for BEE (apart from its corruption tainted Gupta-links) is perhaps best illustrated by its unilateral imposition of a 51% minimum threshold of black ownership by any company wishing to be an Eskom supplier. The extra costs of BEE business by an already heavily indebted company are not part of supply-chain calculations.  Extra costs are just passed on to the public, thereby making electricity even less affordable to even more people.

There’s another reason for mentioning BEE.  There are those who dismiss as dreamers anyone who suggests that Eskom should ignore the market and use its surplus capacity to meet social need. Eskom’s support for BEE is a reminder to those people that Eskom is already doing exactly that. Depending on the class interests involved, Eskom has shown it is quite ready to ignore the cardinal premise of “least cost” and to do so with the full support of the “shareholder”. 

A socialised Eskom would be ready to prioritise the interests of the working class (including the unemployed and the remaining poor) in the same way that Eskom continues to prioritise BEE, regardless of its dire financial straits.

Corruption – made easy by outsourcing

Mention Eskom to most people and the standard response, after the obligatory eye-roll, is the cry of corruption.  And the cry is well earned. But the events that gave rise to Eskom’s corruption and the specific forms that it has taken are most unlikely to re-occur. They are the result of a highly unusual coming together of several disparate circumstances.   

However, the reality of corruption remains, for corruption is integral to the political economy of capitalism.  Neoliberalism, capitalism’s current dominant form, adds steroids to capitalism’s naturally occurring corruption.  It does so by privatising everything that will attract profit-maximising business, while leaving behind only the shell of what is (misleadingly) called the “public sector”.  Being thus denuded of as much capacity –equipment, machinery, buildings, etc – as possible, the public sector has no alternative but to outsource everything.  This leaves a voracious private sector ready to be fed by the public purse. 

This is a global feature of neoliberalism – to which there is an added specifically South African dimension. This is the BEE dimension to the R800 billion public procurement up for private grabbing.  Public officials have a huge incentive to select BEE-service providers, who enjoy preferential access to public outsourcing.  Designed to promote black business, the Preferential Procurement Policy Framework Act perversely adds to the incentives to award and/or win tenders by corrupt means.

What all this means is that, regardless of Eskom’s legal status of being either a public or private entity, it remains a prime target for corruption.  If nothing else, this requires the policy of maximum outsourcing to be turned on its head.  Anything less than urgent and comprehensive insourcing will guarantee the continuation of corruption, even though corruption’s golden age in South Africa is hopefully cemetery bound.

For socialisation and against barbarism

Some 7 billion people – 91% of the world’s total population – are experiencing one or other of the many forms of what is now called “austerity”.  Anxiety, fear, uncertainty, depression, despondency are all emotional forms of austerity.  In the middle of the First World War, the soon to be assassinated German Marxist, Rosa Luxembourg, warned that the choice before the world was either socialism or barbarism.  In 2019, barbarism – in the many forms of today’s fascism – is everywhere on the march. 

Global inequality and insecurity compounds South African inequality and insecurity.  

The struggle against barbarism is a call for the mobilisation of the broad Left, including all progressive trade unions.  The socialisation of Eskom is similarly a struggle that calls loudly and urgently.  It is up to the same progressive trade unions, supported by the broad Left, to hear.  The two struggles are not separate. 

{A much longer version of this article appears in the Daily Maverick}

Jeff Rudin  

 
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