Mining Sector Violence Reflects a Deeper Social Malaise

Marikana has elicited a voluminous spectrum of analyses. The most insightful have pointed to the need for deep structural reforms, including innovative means of addressing the persistent challenges of migrant labour. Few, however, have drawn parallels between Marikana and the central problem of violence in South African society more broadly.

Indeed, as violence and intimidation continue across the platinum belt, no problem is more urgent, especially given that the Association of Mineworkers and Construction Union (AMCU) has yet to sign the peace accord engineered by Deputy President Kgalema Motlanthe.

In their seminal 2009 book, economic historians Douglass North, John Wallis and Barry Weingast explore the connection between Violence and Social Orders. Societies have, through history, used institutions to limit and contain violence by shaping the incentives faced by individuals and groups with access to violence. Institutions are conceptualised as the rules of the game within which organisations play. Most modern societies are characterised by what the authors call a ‘natural state’, or ‘limited access orders’, where personal relationships among the elite at once form the basis for political organisation and constitute the grounds for individual interaction. Such societies are ruled by a dominant coalition and those excluded have only limited access to organisations and valuable resources. Very few modern societies exhibit ‘open access orders’. These orders are depersonalised, in that economic development occurs within a framework of impersonalised forms of exchange, where impersonal third parties credibly enforce contracts. Democracy – as defined by the presence of elections – is a necessary but insufficient condition for open access orders to emerge. The rules of the game have to become depersonalised and access to power and resources has to become inclusive.

South Africa is clearly – in light of the above categorisations – a limited access order. The ruling coalition increasingly grants its members special privileges in the form of patronage (cadre deployment, tenders for politically connected entrepreneurs and so forth). The majority of the population is excluded from access to economic opportunity. These privileges create rents, which the ruling elite then has an incentive to protect by limiting access to them. The National Union of Mineworkers (NUM) is one player within this ruling coalition. They have a particularly strong incentive, under the current labour relations regime, to exclude rival union AMCU from the spoils of being the officially recognised union on any given mine or set of mines. Both NUM and AMCU know that inter-union violence erodes the available rents, as mining profits fall on the back of reduced productivity. But each presumably values the long-run benefits of official recognition sufficiently to warrant the costs of violence.

Politicians in both natural states and open access orders want to create rents: rent-creation simultaneously rewards their supporters and binds their constituents to support them. The difference is that in open access orders, the creation of new entities to compete for rents is accepted; the creation of new interests and the generation of new sources of rents occur continuously. But NUM has direct access to South Africa’s ruling coalition and is therefore strongly disinterested in accepting the entrance of new players to the bargaining game. NUM, through the employment of violence (returned in kind by AMCU) is carefully guarding its rent-stream. The high level of violence in South African society more broadly is in fact a reflection of a political system that is democratic in name but functionally a mature limited access order at best.

To further underscore the point, consider that open access orders are characterised by adaptive efficiency – societies generate a range of new ideas in the face of exogenous shocks and dilemmas. Political competition, for instance, provides those in power with strong incentives to adapt policy to address the problem. If South Africa were a truly open access order, for instance, one might expect – in the wake of Marikana – that the ruling party would have voted in favour of amendments to labour legislation that serve to democratise the bargaining process. They did not. The incentives to protect rents for the ruling coalition outweigh the incentives to adapt efficiently to shocks.

So how then should South Africa proceed in order to transition from a natural state to an open access order functionally consistent with the provisions of its constitution? If we are to transition from a natural state to an open access order, we need to create what North and his co-authors call ‘doorstep conditions’ through which elites are incentivised to value cooperation (more inclusive rent-sharing) over violence. Specifically, this means three things. First, elites need to credibly commit to upholding the rule of law. Second, organisations such as the government need to be ‘perpetually lived’, ‘defined by the identity of the organisation rather than the identity of its members’. Patronage and cadre deployment undermine this imperative in the South African context. Third, the state must legitimately consolidate control over the organisations with violence capacity, such as the police force and the military. In South Africa, it is too often the case that an ascendant faction within the ruling coalition has monopoly control of police and military resources. In other words, elites must find it in their interests to transform personal and privileged intra-elite arrangements into impersonal contracts.

In the NUM vs AMCU debacle currently unfolding, for instance, it would actually be in NUM’s long-term interests to democratise the bargaining process. This would reduce the violence in the sector and prevent NUM from being excluded from the bargaining table in the future (which is a very real risk considering the momentum that AMCU has gained after Marikana).

Among other things, last year’s events in Marikana laid bare the central problem of violence as a means to an end in South African society which has still not been adequately addressed. If violence is to be ameliorated, concerted action is needed to create the doorstep conditions by which we can abandon the shackles of ‘limited access and move to an ‘open access order’. Only then can South Africans truly enjoy access to economic opportunity.