A successful referendum to expropriate apartments in Berlin, Germany, for social housing has generated excitement worldwide about what is possible in the fight to resocialize— or re-municipalize—public goods. (Re-municipalization means returning a privatized service to local public control.) The activist-led campaign to buy back over 10% of apartments has been described as “one of Europe’s most radical ripostes to gentrification.” It was supported by over a million people, as residents faced increasingly unaffordable rents in Berlin.
Across the world, even in the most industrialized nations, citizens are finding it harder to maintain decent living conditions in the financialized economy. Speculative real estate investment is just one of the many late-stage capitalism offshoots that are pushing essential public goods outside the reach of more and more people.
In South Africa, the site of redistribution is meant to be the local level of government. The Local Government Municipal Systems Act of 2000 intends, among other things, “to establish a framework for support, monitoring and standard-setting by other spheres of government to progressively build local government into an efficient, frontline development agency capable of integrating the activities of all spheres of government for the overall social and economic upliftment of communities in harmony with their local natural environment.”
Some two decades after the passing of the act, South Africa’s municipalities are in shambles. In June of this year, the auditor general, Tsakani Maluleke, told the parliamentary committee on public accounts that the financial state of municipalities was fast deteriorating, along with their ability to deliver. According to the auditor general:
- Over 25% of municipalities were at risk of not continuing as going concerns.
- Half of the collected revenues were going toward salaries, while only 2% of revenues were going toward maintaining public infrastructure.
- A shocking 63% of municipal debt was not recoverable, while the average creditor payment collection period was a staggering 209 days.
In the lead-up to the local elections on November 1, 2021, it may be tempting for analysts to say that our municipal woes are purely a result of low accountability and poor governance. After all, bankrupt municipalities fail to deliver water and sanitation, they fail to connect households to electricity, they fail to protect the environment against degradation, and they fail to protect citizens against the adversity caused by pollution. But reducing the failures of local government to issues of financial stability and corruption alone fails to acknowledge the inappropriateness of chosen delivery models in reckoning with our past.
Proponents of re-municipalization have the aim of reclaiming service provisioning of public goods from private and public-private partnerships back to public hands. This has particularly focused on water and electricity, and comes in response to private failures, particularly post-crisis austerity measures that put financial sustainability above public good.
A question then arises: can the concept of re-municipalization be applied to the South African context? And if so, how?
The vast majority of South Africans are poor. But to fully understand the implications of poverty in South Africa, one must understand how that society has manufactured such poverty.
An integral part of apartheid rule was to create racial, gender, and other forms of domination and exclusion. These were institutionalized through law to create a class of cheap labor. Any discussion about public service provisioning that does not start with a recognition of this point inadvertently mischaracterizes the postapartheid state’s failures. The majority, composed of the poor and working class, was created through the commodification of labor.
From the late 1800s to the early 1900s, the growing mining sector saw exponential growth in the demand for labor. Meanwhile, white farmers and white labor grew more concerned by the competition presented by black labor and black farmers. Coalitions ensued, and lobbying culminated in the 1913 Native Land Act and a multitude of other pieces of legislation that would successively deepen systemic diswelfare and entrench labor devaluation and exclusion. Citizens were stripped of their land and their citizenship and reduced to poor, unskilled laborers—if that.
Black people were made servants to a capitalist system that created progressively fewer jobs for poor labor. Meanwhile, public policy for white South Africans moved towards a mixed economy with extensive welfare benefits. The state underinvested in social and economic infrastructure such as health, housing, and education for Black people. At the same time, it invested heavily in the same public goods for the minority white population. By the 1970s, the state had raised the standard of living of white South Africans to those of industrialized economies in the global west. As a result, private sector actors began to put pressure on the apartheid state to privatize.
But the apartheid state itself was slow to privatize. This was partly because of the economic context and partly because, aside from the private sector, there was no political pressure in favor of privatization.
The pressure would eventually fall on the incoming African National Congress (ANC) government. This was a party which, until the late 1980s, had been committed to active intervention in distribution for a welfare state. This welfare state would be founded on principles of universality and give relief to people who suffer from the diswelfare caused by the economic system.
Within a few months of coming into government, the ANC swiftly moved away from its long-held principles on the role of government.
In late 1994, for example, the ANC gave officials the authority to only provide water if they could fully recover the cost of managing the water resources. In that same period, its government cut municipal grants and subsidies; meanwhile, municipalities were expected to generate the lost revenue that the state no longer provided. Consequently, municipalities were forced to run corporations. In turn, many created agencies that were privately minded, even if they were publicly owned.
And so it was that the citizens, reduced to laborers in the apartheid state, became customers in the postapartheid state. If there is such a thing as re-municipalization, this was when it happened.
Water boards were established through the Water Services Act of 1997 to provide, according to the government, retail water and sanitation services. Municipal utilities companies were created to play a large role in the distribution and supply of energy, highly dependent on a now corruption-ravaged state utility. Provisions were made for the indigent through the allocation of free basic water and electricity, indigent programs, and a revenue model that was based on cross-subsidization.
And though the vast majority of customers earned very little or nothing, most were expected to pay for social goods at progressively increasing prices. Many townships faced double and triple figure inflationary increases for water and other services.
The postapartheid government has continuously used human rights language to frame its interventions. But its chosen municipal delivery model has not addressed the injustices of our past. Today’s municipalities are contributing to deepening inequality, both through their intended model of provisioning and their ethical and governance failures.
The corporate model of delivery fails to acknowledge that most South Africans did not have equitable access to the labor market. For this reason, any social policy that bound welfare to labor participation was regressive and anti-poor.
But is re-municipalization the right answer, particularly in a system fraught with corruption and maladministration? Should citizens be asked to give over more power to public servants who have used the available public resources to strengthen patronage networks at the expense of service delivery, even as we argue that the system is flawed?
We, the people, must be more imaginative than that. The biggest lesson we can learn from Berlin is that to galvanize society, activists must find the one issue that all citizens understand and experience equally. But we don’t have a strong and ethical government to assure resocialization. That’s why different models of accountability, overseen directly by the people, are required—models like, for example, community land trust funds.
In its transition to becoming a governing party, the ANC let go of its founding principles at the directives of the World Bank, the International Monetary Fund, and the powerful business community that would benefit the most from privatized public goods. The ANC failed to understand that its role was transformation and redistribution, not just service provision. But while many activists warned us of these risks, we the citizens failed to hold the party and its government accountable for this betrayal.
Campaigns for re-municipalization must not fail at acknowledging the unique South African context. This unethical and corrupt state has failed to transform society. It cannot be the guardian of universal public goods. If re-municipalization is to work in South Africa, the accountability model between the municipality and the citizens will need to be reimagined. Social solidarity must be built through other forms of social contracting, and not through the state as was once envisaged. Not, at least, until the state has fundamentally transformed.