GeoJournal 57: 313, 2002.

2003 Kluwer Academic Publishers. Printed in the Netherlands.

Neoliberalism and privatisation in South Africa

Sagie Narsiah
Department of Geography, University of Natal, Pietermaritzburg, Republic of South Africa (E-mail: narsiah@nu.ac.za)

Abstract
Perhaps the defining characteristic of development as a global discourse is its neoliberal character. Even recently liberated
nations such as South Africa have not escaped its reach. In South Africa, there has been a movement from a development
policy with a socialist resonance the Reconstruction and Development Program (RDP) to one decidedly neoliberal in
form and substance the Growth Employment and Redistribution (GEAR) policy. The articulation of neoliberalism through
development policy is being facilitated through a series of measures among which are fiscal austerity, export oriented
production and the privatisation of public sector services. While the GEAR policy, as a macroeconomic framework, is being
contested by labour unions it is privatisation which is facing widespread opposition among communities. My intention is
twofold, firstly, to investigate how neoliberalism as a global hegemonic discourse has succeeded in capturing, colonising
and repackaging the development imaginary of the African National Congress (ANC). Secondly, I wish to examine how
privatisation as a sub-discourse of neoliberalism is being articulated in the historically black township of Chatsworth, in
Durban.

Introduction
The central feature of development during the last three
decades has been its neoliberal character. Neoliberalism is
used as a pejorative term for the phenomenon of globalisation. Moreover, Harvey (2000) contends that terms such
as globalisation mask the underlying class basis of what is
essentially a capitalist system writ large. Furthermore, the
analytical tools best suited to an examination of the system
have been confined to the academic periphery. Analytical
tools are themselves the center of contention. While academic engagement on such issues is essential, there is a risk
that opportunities for progressive change may be missed.
South Africa is very much a case in point.
The post-1990 era has been marked by both continuity
and discontinuity. The decade-old history of the new South
Africa reveals a bizarre unraveling of the revolutionary dialectic (cf. Murray, 1994). For the masses of South Africans,
prejudiced under an apartheid regime: new prejudices, new
apartheids and more importantly new resistances. Not insignificantly, the new is intensely spatial. It is in poor
households and communities where the impact is greatest:
the neoliberal spatial fix (cf. Harvey, 1984). New spaces for
capital accumulation are opened up. The neoliberal spatial
fix also acts as a barrier to capital accumulation, bearing
the seeds for its own destruction, as communities transform
these spaces into the object for social mobilisation.
A discussion of the central themes of this paper evolves
in the following way. Firstly, I outline theoretical precepts
pertaining to neoliberalism. I then attempt to account for
the changes in ANC development policy particularly the
perceived movement to neoliberalism. I specify the movement through an analysis of privatisation in South Africa.

I finally engage with the impact of neoliberalism at the

local scale through an analysis of the privatisation process
in Chatsworth, Durban.

Neoliberalism and theory? A theory of neoliberalism?

Neoliberalism is a doctrine which has philosophical roots
in Adam Smiths free market school of economics. Neoliberalism also stems from a reaction to the Keynesian
economic programs of the post-World War II era up to the
1970s. The hegemony of neoliberalism is a consequence
of the perceived failure of Keynesian programs during the
1970s, accentuated by the global economic recession. Vicious attacks by the monetarist school of economics lead
by P.T. Bauer, Friedrich von Hayek, and Milton Friedman
among others, together with the political impetus gained
from the conservative regimes of Thatcher and Reagan led
to the hegemony of neoliberalism in the late 1970s and early
1980s.
Neoliberalism as a global doctrine the outcome of
a particular form of bourgeois class struggle echoing
the struggle between the landed gentry and the merchant
classes in England during the 19th century meant that
huge swathes of space were subsumed under a free-market
capitalist system (cf. Negri and Hardt, 2000). Neoliberalism
is characterised by fiscal austerity, deregulation and privatisation. There is a distinct withdrawal/shrinking of the state
and a transfer of competence to the private sector. Areas
previously the competence of the state are subsumed under
a capitalist mode of production.
In his magisterial work, Capital, Karl Marx outlined the
operation of the capitalist mode of production. In explaining

4
the process of primitive accumulation and theory of modern
colonisation, Marx suggested that geographical expansion
was a logical outcome of the development of the forces of
production. New lands untouched by the capitalist mode of
production were drawn into the web of capitalist relations
through colonisation. But, in order for this process to evolve
there was a need for a separation between the owners of the
means of production and the means of production. There was
a need for the private appropriation of the means of production. Thereafter, the processes characteristic of a capitalist
mode of production would evolve.
Marx suggested that the process evolves in the following way. Pre-capitalist modes of production are subsumed
under the capitalist mode of production through a process
of formal subsumption. By formal subsumption he meant
capitals acquisition of direct control of the labour process
a penetration and appropriation of the means of production.
Out of the process of formal subsumption, the process of
real subsumption arises whereby there is a transformation of
the nature of the labour process and its actual conditions
(Marx, 1977, p. 1034). While these processes are taking
place other processes are also in operation. A process of
concentration occurs as new branches of capitalist production open up. Out of this, a process of centralisation occurs
as capital becomes concentrated in the hands of fewer and
fewer capitalists.
The nature of Marxs dialectic militates against a purported teleology. Rather, fluidity, flux and flow (cf. Thompson,
1980) is a more appropriate characterisation of Marxs
method. Thus, processes such as primitive accumulation
are not singular once-off phenomena, rather, (dis)continuos,
constantly (re)evolving (Negri and Hardt, 2000). The contemporary capitalist epoch is characterised by primitive
accumulation that is largely discursive. The global phenomenon labeled neoliberalism has a discursive character.
Essentially, separation between the owners of the means
of production and their means of production occurs discursively, through trade treaties and legislation policed and
facilitated by organisations operating beyond the scale of
the nation-state. Neoliberal ideas move effortlessly across
scales, (re)colonising places and spaces, in the process being
re-formulated and regurgitated. Moreover, John Maynard
Keynes (cited in Yergin and Stanislaw, 1998, p. 14), could
proclaim that ideas are more powerful than is commonly
understood. Indeed, the world is ruled by little else. Madmen
in authority, who hear voices in the air, are distilling their
frenzy from some academic scribblers of a few years back
. . . Sooner or later it is ideas, not vested interests, which are
dangerous for good or evil.
Neoliberal South Africa?
The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means
of communication, draws all, even the most barbarian,
nations into civilisation. The cheap prices of its commodities are the heavy artillery with which it batters down
all Chinese walls, with which it forces the barbarians

intensely obstinate hatred of foreigners to capitulate. It

compels all nations, on pain of extinction, to adopt the
bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e. to
become bourgeois themselves. In one word, it creates
a world after its own image (Marx and Engels, 1998,
p. 55).
A number of attempts have been made to explain the purported shifts in African National Congress (ANC) development
policy. The question that is most often posed is: Why did
a liberation movement with a largely socialist agenda shift
so quickly to a neoliberal position? There have been some
convincing attempts at answering the question. One school
of thought suggests that multilateral institutions such as the
World Bank brought discursive power to bear on the ANC
thus, converting the organisation to neoliberal orthodoxy
(cf. Saul, 2001; Bond, 2000; Marais, 1997; Lee, 1993;
Kentridge, 1993).
Briefly, the argument goes: during the early 1990s, the
World Bank sent a number of missions to South Africa;
ANC researchers and policy advisors were targeted by these
missions. Senior ANC officials were sent for training to the
Washington headquarters of the World Bank and the IMF.
The World Bank in particular was highly successful in assimilating the ANC into orthodoxy (Williams and Taylor,
2000). A senior World Bank official wrote:
The Bank, in short had gained the confidence of important sectors of the new Government, a number of NGOs,
business leaders, senior academics and trade unionists
with whom it had worked. At the same time, the Bank had
been able to accumulate an extensive and deep knowledge of South Africas economic situation, and had built
the basis for responding effectively to any request for
financial and technical support in the immediate future
(Cofino, nd:2).
The influence of the World Bank was apparent in ANC
policy which emerged during 1992 and 1993 (cf. Gilbert,
2002). The policy networking initiatives of the World Bank
paid dividends when the ANC assumed power in 1994. The
World Bank made no secret of the fact that it had succeeded
in gaining the confidence of the key policy, academic and
NGO constituencies.
Another influential school of thought suggests that the
ANC had no alternative, but to change. It was clear that
the ANC was going to inherit huge budget deficits and a
socialist program would have hastened the decline into ruin
and economic isolation. Fiscal and monetary discipline thus
became non-negotiables. Gelb (1998) under the guise of a
pathetic mea culpa suggests that the ANC had little option
but to follow (implement) the program initiated by the National Party during the late 1980s. Thus, there is an essential
continuity in the policies of the national government from
1980s onwards. Gelb (1998) could argue, therefore, quite
correctly, that ANC development policy was consistent from
1993 onwards. Gelb (1998) notes that the Minister of Finance and the Governor of the Reserve Bank were appointed
under the apartheid government.

5
The ANCs enthusiasm for all things neoliberal after Finance Minister Keys and Governor Stals were replaced by
Trevor Manuel and Tito Mboweni, respectively, attributes
to orthodoxy the status of inherent truth. Perhaps Gelbs argument could be attributed to some Freudian defence, noting
that Gelb, an erstwhile policy guru for the trade union movement, during the 1980s, was a member of the team, which
formulated the GEAR policy.
A third school of thought suggests that the power of
the neoliberal discourse led to the ANC capitulation (Hart,
2002; Peet, 2002; Lester et al., 2000). Peet (2002) suggests
that carefully structured arguments historically constituted
and deployed through what he refers to as an AcademicInstitutional-Media (AIM) complex ensured that the ANC
would subscribe to economic orthodoxy. The ideas of freemarket gurus such as Milton Friedman and Von Hayek were
transformed into policy positions in conservative think-tanks
and institutions and deployed through various popular media e.g. newspaper columns; economic journals; talk-shows
(Peet, 2002). There is a geography to the AIM-complex in
its deployment across space. Peet (2002) identifies global
AIM-complexes located in the centers of power in the FirstWorld and regional AIM-complexes located at the scale of
the nation-state. There is an articulation between these complexes creating a geography of knowledge construction and
deployment.
These schools of thought, however, fail to account for the
perceived speed of the turn from socialism to neoliberalism. Was the ANC already a convert to neoliberalism prior to
1994? Waldmeir (1997) suggests that a sophisticated courtship of the ANC, initiated in the mid-1980s, by big business
in South Africa was indeed successful. The hospitality afforded to the liberation movement in opulent surroundings
such as Mells Park House in the UK meant that the interests
of big business were secured long before political emancipation of the masses in South Africa (Waldmeir, 1997). But,
this still attributes too much to a few individuals turning the
wheels of history.
There is another reason for the ANC shifting policy
position. The ANC had long subscribed to a theoretical understanding of the South African social formation referred to
as Colonialism of a Special Type (CST). The argument was
that South Africa is a capitalist country where the means of
production are in the hands of the whites. Both oppressor
and oppressed were not separated by the friction of distance.
Capitalism in South Africa had a racial character. Hence,
the overthrow of racism would mean the overthrow of capitalism. This position was staunchly defended by the most
influential members of the ANC such as Joe Slovo. Harold Wolpe (1980) demonstrates very convincingly that this
position submerges the economic into the political. Politicaleconomy thus translates into political hegemony. Wolpe
(1980, p. 16) cogently argues:
But by submerging the economic into the political
it becomes unnecessary to analyse the effects of specific transformations of the economy on the political
struggles. Thus there is little analysis of changes in the
labour process and its effects on the racial division of la-

bour, the problem of labour discipline, the consequences

of the balance of payments, the search for export markets, the intensification of exploitation and so forth. Nor
is there any analysis of the way in which such changes
are politically defined and therefore, of the manner in
which such changes enter the political arena.
This theoretical failing meant that the ANC could easily
overthrow racism, however, when it came to articulating
policies which would realise a just economic order they were
in a minor league compared to big business and bureaucrats
of the apartheid regime (cf. Gilbert, 2002). Furthermore, the
ANC had a tiny research department and lacked the capacity
to produce and articulate strong policy positions. The theoretical failure of the ANC was exacerbated by the hegemony
of neo-Poulantzian regulation theory during the late 1980s.
By the time the liberation movement was unbanned it was
already too late.
In the early 1990s the Economic Trends group (ET),
which had provided research support to the Congress of
South African Trade Unions (COSATU), was enlisted by
the ANC to formulate post-apartheid economic policy. Together with progressive international economists, the Macroeconomic Research Group (MERG) was formed. A postKeynesian policy document was presented to the ANC in
1993. However, the MERG document was not adopted by
the ANC (Padayachee, 1998). This marked the defeat of
the growth through redistribution faction within the ANC.
In late 1993, the trade union movement, which formed
part of the alliance with the ANC and the South African
Communist Party (SACP), provided the impetus for a basic
needs approach, later referred to as the Reconstruction and
Development Program (RDP). The RDP was the election
manifesto of the ANC. When the ANC assumed power in
1994, the RDP was translated into policy. The RDP White
Paper showed a significant departure from the principles
of the RDP base-document (Habib and Padayachee, 2000;
Adelzadeh and Padayachee, 1994). Gilbert (2002) suggests
that even before the RDP was adopted neoliberal ideas were
dominant within the ANC.
The RDP ministry, which was run by the former secretary general of COSATU, Jay Naidoo, was hamstrung
from its inception. Naidoo was powerless to implement
RDP policies and faced resistance from government ministers who fiercely guarded scarce resources. Naidoo faced
resistance from the then deputy-president, Thabo Mbeki,
who personalised attacks against him (Bond, 2000). Funding
was not adequately used with huge roll-overs (Turok, 1995).
The prelude to the closure of the RDP office came with
the National Growth and Development Strategy (NGDS) in
February 1996.
The new version of development began a movement
from social heterodoxy to neoliberal orthodoxy. South
Africa was formally subsumed into a neoliberal, free-market
paradigm in 1996 with the adoption of the Growth Employment and Redistribution (GEAR) program. Particular
policy positions were adopted as a consequence, promoting
fiscal austerity, export oriented development and privatisation.

6
On the 14 of June 1996 the GEAR policy was unveiled.
With the publication of GEAR the ANCs neoliberal metamorphosis was complete. Contrary to the claims of the
President, Mr Thabo Mbeki, the GEAR policy marked a
break with the basic needs oriented Reconstruction and Development Program (RDP). The RDP was mentioned four
times somewhat flippantly in the GEAR document and once
more in the appendix in relation to budget cuts! (Marias,
1997). This hardly qualifies as a continuity between GEAR
and the RDP. The GEAR policy was a combination of the
standard IMF and World Bank stabilisation and structural
adjustment policies. The GEAR strategy has been referred
to as a homegrown structural adjustment programme.
What is interesting is the change in lexicon from the
growth with redistribution of the RDP base document to
growth and redistribution of GEAR, a tendency that was
explicitly rejected in the original RDP document. The
GEAR strategy proposed stimulating growth through an
export-oriented economy. Adelzadeh (1996) questioned this
strategy by arguing that approximately 25% of the output of the South African economy was geared towards the
production for foreign markets, substantially higher than
many of the OECD countries and the South East Asian tiger
economies!
Adelzadeh (1996) criticized the GEAR policy for lack of
integration and over reliance on the private sector to promote development. His predictions were that the GEAR
policy would not increase the growth rate of the economy, it
would not lower the unemployment rate and that it would not
yield sufficient progress towards the equitable distribution of
income and wealth.
In 1999, Adelzadeh revisited the GEAR policy to gauge
whether its targets were being met. Almost all the GEAR
targets were missed (by huge margins in most cases) for the
period 19961998. The GDP declined from 3.2% to 1.7%
to 0.1% in 1996, 1997 and 1998. The GEAR predictions
were 3.5%, 2.9% and 3.8%, respectively. Per capita income
fell 2.6% from 1996 to 1998. Unemployment increased with
job losses of 71,000, 126,000 and 186,000. GEAR predicted
job gains of 126,000, 252,000 and 246,000. Private sector
investment which was what the GEAR policy was primarily
predicated on plummeted from 6.1% to 3.1% to 0.7% instead of increasing 9.3%, 9.1% and 9.3%. Private investment
was related to the purchase of state assets through its divestment programme rather than new plant equipment. There
was a outflow of capital of $2.3 billion in 1997 compared
with an inflow of $1.7 billion. There have been certain targets which have been met for example the budget deficit has
been decreased and the inflation rate has been kept below
10% throughout the period. In 1997 there was an attempt
to graft a developmental framework onto GEAR (Marais,
1997). However, this strategy was doomed to failure because the priorities of a people driven development and the
priorities of capital are different (Bond, 2000; McKinley,
1997).
The Department of Finance has worked with almost missionary zeal to keep budget deficits and the inflation rates
low. Presumably this is in keeping with their model. How-

ever, Brixen and Tarp (1996) using the World Bank model
which is not dissimilar to the GEAR model argue that there
was room for increased public spending in real terms to
help South Africas social needs! Perhaps those economists
who were involved in modeling the South African economy
using GEAR orthodoxy, had been seduced by the objective pseudo-science nature of the process. While models
and modeling are undoubtedly important, their limitations
need to be understood, and they should not be fetished
as some South African progressive economists, recent coverts to modeling, appear now to be doing. Good economic
ideas, backed by theoretical rigor and substantive arguments, and informed by a real concern for the lines of ordinary people should still matter (Padayachee, 1998, p. 442).
Leontief (cited in Padayachee, 1998, p. 442) warned, the
mathematical-model-building industry has grown into one of
the most prestigious, possibly the most prestigious branch of
economics. [Unfortunately] uncritical enthusiasm for mathematical formulation tends often to conceal the ephemeral
content of the argument. An investigation into the role that
the economic modeling discourse played in the percolation
of neoliberal influences into ANC economic thinking remains to be undertaken. GEAR forms the substrate for the
governments privatisation policy.

Privatisation in South Africa

Feigenbaum et al. (1998) suggest that political imperatives
drive privatisation initiatives. They suggest a typology of
privatisation pragmatic, tactical and systemic. Pragmatic
privatisations are frequently introduced as technical solutions to immediate social problems. They are seemingly
devoid of ideological considerations. Tactical privatisations
are introduced solely for the purpose of achieving the shortterm political goals of a constituency. They seek either to
alter the balance of power by attracting allies and rewarding supporters or to achieve specific short-term objectives
such as reducing the budget deficit (p. 42). Systemic privatisations are intended to reshape the entire society by fundamentally altering economic and political institutions and
by transforming economic and political interests. Systemic
privatization seeks to lower peoples expectations of what
government can and should be held responsible for, reduce
the public sectors oversight and enforcement infrastructure
and transform the interest group landscape to make it less
supportive of governmental growth (p. 43).
During the late 1980s, Hentz (2000) suggests that privatisation was used as a (successful) exit strategy by the
erstwhile National Party government. In effect, Hentz (2000)
argues that the privatisation policy adopted by the apartheid
state during the 1980s was a political tactic used to satisfy
a political constituency. The neoliberal approach adopted by
the National Party could be termed a tactical privatisation,
using Feigenbaum et al. (1998) typology. I would suggest
that Hentz is partly correct. Privatisation was being deployed
by the United States, United Kingdom and the World Bank
globally during the 1980s. The apartheid state maintained

7
close ties with these countries and global financial institutions. I maintain that the National Party government had
subscribed to the neoliberal discourse that was deployed by
the institutional apparatus of the global north during the
period leading up to the demise of apartheid.
The privatisation attempted by the National Party regime could only be tactical, due to the denouement of
apartheid, i.e., there were temporal constraints to what could
be achieved. This does not detract from the stated intention of the apartheid governments privatisation program:
Privatisation means the systematic transfer of appropriate
functions, activities or property from the public to the private
sector, where services, production and consumption can be
regulated more efficiently by the market and price mechanisms (emphasis added) (Republic of South Africa, 1987,
p. 8). However, the assimilation of the ANC into a neoconservative economic philosophy implied that the space for
systemic privatisation was created in a post-apartheid era.
The GEAR policy mapped out an unequivocally marketoriented growth strategy. In doing so it set the parameters
for the National Partys privatisation initiative to take on a
systemic character.
Privatisation took on a systemic character. An institutional structure was setup to promote closer relations with
the private sector. The Municipal Infrastructure Investment
Unit (MIIU) was established for the purpose of enabling
the penetration of private capital into the provision of basic
services. The Municipal Systems Act, the Municipal Structures Act and a host of documents relating to public-private
partnerships created the space for an increasing role of the
private sector in the provision of public services.
The frameworks enabled the devolution of decision making to the local-level. Since 1997 a number of local authorities have exercised the option of outsourcing of services;
concessions and so-called Build Operate Train and Transfer
or BoTT schemes. The record of private company involvement is a poor one with specific reference to disadvantaged
communities.
Privatisation has occurred on a wide scale throughout
South Africa. There have been water and sanitation concessions in Nelspruit, in the Mpumalanga Province, Queenstown, in the Eastern Cape Province and on the Dolphin
Coast in KwaZulu Natal Province. In Johannesburg, the
water and electricity utilities have been corporatised. In
Cape Town, in the Western Cape Province and Durban, in
KwaZulu Natal Province, water and sanitation concessions
to multi-national companies are being negotiated. The states
housing policy has followed the same route. In 1993 the
Housing Ministry decided to sell-off its housing stock, in
effect to privatise the housing stock. The approach was similar to Thatchers housing program in the 1980s an attempt
to create a peoples capitalism (Hanke, 1987).
With the privatisation of basic services, the means of
production of services are in the hands of capitalists who
now operate facilities on the basis of profit. Processes of
concentration the acquisition of services contracts, outright
acquisition of services provision infrastructure etc. are occurring on an increasing scale throughout South Africa with

the rationalisation of municipalities (during the last local

government elections there was a rationalisation of municipalities from over 800 to 284), more opportunities for private
sector provision of services are arising. Public-private partnerships are the new buzz-words. These new initiatives are
being dressed up in the garb of black-empowerment and
entrepreneurialism. However, these so-called local partnerships are controlled by multi-national corporations. There
is a process of centralisation of basic services provision
capital as these little fishes are eventually gobbled up by
the bigger fishes which in turn are chomped upon by the
sharks. It is estimated that 70 percent of the worlds water
supply is controlled by four multi-national corporations. The
implications are far-reaching indeed. Thousands of jobs are
at stake as rationalisation takes place. Fewer jobs for labour,
but the demands placed on those employed are greater as
they are flogged to work more intensively (or efficiently in
private sector lexicon). It is a given that jobs will be lost
a ploy commonly used by owners who have newly acquired
facilities is to rationalise labour in order to show a quick
return on investment to shareholders. Contracts which have
been bought with the blood of labour become nullified and
have to be re-negotiated. Workers usually have to settle for
less and are offered short-term contracts without benefits.
In February 2001, 150 workers were fired by a company
to which the Johannesburg City Council had privatised its
fleetservices and maintenance. After negotiations with the
South African Municipal Workers Union some jobs were reoffered. However, contracts had to be re-negotiated. The
Union discovered that the company was part of a bigger
group of companies whose policy is to create subsidiaries
to which they outsource everything, as such no worker had
a permanent job. Numerous protests have taken place, as
workers take to the streets dissenting against impending job
losses and loss of benefits.
Sadly, the self-same protestors who are employed today
will form the relative surplus population of tomorrow. Rationalisation will lead to thousands being unceremoniously
booted out of their jobs. They become part of what Marx
refers to as the floating relative surplus population either
being re-employed under very different working conditions
or occupying casual jobs in other branches of production.
These people get shunted from one branch of production to
another. Many of floating relative surplus population find
themselves with little or nothing to lose, thus turning to a
life of crime becoming part of the lumpenproletariat
vagabonds, prostitutes and criminals. What happens when
people cannot afford basic services?
Chatsworth struggles
The Constitution of South Africa is unique in that it enshrines in its Bill of Rights, access to adequate housing and
sufficient water (Republic of South Africa, 1996). In other
words these rights are recognised as universal and cannot be
applied subjectively, i.e., privatised. However, these socioeconomic rights have been systematically undermined and
violated at the grassroots level. Critics have almost without

8
exception placed the blame firmly at the door of governments macroeconomic policy position. The question arises:
How can socio-economic rights of the citizens of South
Africa be respected if the Bill of Rights and macro-economic
policy are at odds? Two words in the Bill of Rights has
created sufficient space for maneuver: access to adequate
housing and access to sufficient water (emphasis added).
The word access also carries enormous power. Thus the
government can provide RDP houses and 6 kiloliters of free
water and not be in violation of its citizens rights. In Durban,
however, citizens rights not to be evicted from their homes
and their access to water have been violated. In this section
these issues are taken-up with reference to a community in
the former black township of Chatsworth, which falls within
the Durban Metropolitan Area.
Approximately 1520 km to the south-west of central
Durban lies the township of Chatsworth (Figure 1). Chatsworth was proclaimed, in 1959, under the aegis of the Group
Areas Act of 1950, as a township for the Indian race group
by the Durban City Council. Ironically fourteen thousand
people were displaced from what was to become Chatsworth. Construction of the township began in 1962 with the
first inhabitants moving in shortly thereafter. Construction of
the township was completed in the early 1970s. Chatsworth
has a population of approximately 300,000 people. It is
characterised by a sterile, stultifying, modernist landscape.
Inhabitants had three massed produced options: flatted houses, row houses and semi-detached double storey
buildings. The development of flat type dwellings were
regarded as an efficient use of physical space. However, there were disadvantages. Tenure was based on
rental and non-ownership. Maintenance costs would be
higher because the Council would have to pay a contractor utilizing artisan labour. Furthermore, experience
had shown that tenants tended to abuse rented property.
Supervision would incur additional costs to the council.
Having taken these factors into consideration, the Council decided against the large-scale construction of flatted
houses. Sub-economic units of this type were only built
in parts of Unit Two (Bayview) and Unit Three (Westcliff)
for the low-income groups (Subramony, 1993, p. 58).
A total of 20,214 housing units with 405 blocks of flats
consisting of between 6 and 8 units each were built in Chatsworths 9 neighbourhood units (Figure 2). When Chatsworth
was built, there were a number of open spaces left undeveloped. Since the early 1990s, with the repeal of the
Group Areas Act, these spaces have been filled-in by informal development. Informal settlements such as the Joe
Slovo; Cocobar; Crimby; Lusaka and Bottlebrush settlements now adjoin the established residential areas in the
township. While the informal settlements represent areas of
extreme poverty and deprivation, there are areas within the
established township which are in a similar if not a worse
situation. Pockets of poverty exist in flats or tenements such
as those in Westcliff and Bayview. The nature of the tenure
arrangement in the flatlands means that the Council acts
as the landlord. However, since the Council is a public body,
the provision of housing becomes a basic service. Therefore,

those living in the tenements have a package of basic services which includes water, electricity, refuse removal and
housing.
The policy positions during the denouement of apartheid
were decidedly neoliberal in character. For example, the De
Loor Commission on housing advocated home-ownership
for all (Gilbert, 2002). This revealed a movement from
basic-needs to commodification. It was evidence of the
formal subsumption of housing into the private sphere of
capitalist accumulation. This approach was adopted with
minor changes by the new government (cf. Gilbert, 2002;
Bond, 2000). Indeed the Ministry of Housing could report
that by the end of 2000 over 370,000 council homes had been
transferred to tenants.
The local variant of the governments strategy to selloff the state housing stock was a decision taken in 1996 to
sell council flats under sectional title. The National Housing
Subsidy Discount Benefit Scheme was to be used to promote
the sale of the flats. The Discount Benefit Scheme offered a
subsidy of R7,500 ($ 1,000) to tenants who wanted to buy
their flats. The scheme has not achieved its objectives. By
June 2000 only 10% of stock had been sold off. The Metro
Housing Unit indicated that in terms of the Council policy
and the Discount Benefit Scheme indigent tenants who were
in arrears (rent, water and electricity) could not purchase
their flats until they had settled their debts with the Council.
Furthermore, in the majority of cases, a residual amount was
still payable after the Discount Benefit Scheme grant and
indigent tenants were still unable to afford this in many cases
(Metro Housing, 2000). The Council decided that only those
who had arrears of R1,000 ($ 135) or less would be eligible
to purchase their flats.
The flats were to be sold under sectional title as part of
bodies corporate. As a consequence, the administrative responsibilities were to be removed from the Council to the
bodies corporate. Rental to the Council would be replaced
by a levy to the body corporate. According to calculations
by the Council, the body corporate option would result in an
increase of approximately 5% in costs. The Housing Department constituted a team of officials to make presentations
to groups of tenants on the process of the establishment of
bodies corporate. Tenants in arrears are viewed as a major
obstacle to the sale of council flats. It was estimated that
20% of the tenants would elect to remain tenants because
they could not afford to purchase their flats. Eviction of these
tenants would imply that the Council automatically became
a member of the bodies corporate should a 100% take-up
not be achieved. The Council resolved that in the event those
tenants decided against purchasing their flats, they would be
liable for both rent and the levy to the body corporate. This
situation would obtain until the tenants were relocated. The
Council also resolved to pay levies to the bodies corporate
until 100% occupancy was achieved (South Central Council Agenda, 19990729, pp. 1517). The establishment of
bodies corporate did not remove the issue of administration
charges. A number of well-established real estate agencies
are suggested to the bodies corporate to manage the entity.
Legal contracts define relationships between members of the

Figure 1.

body corporate; the municipality and the body corporate and

management agencies and the body corporate.
The Council used a slightly different approach to the
residents of the flats in Bayview and Westcliff. As a direct consequence of the protracted struggle by the residents
against eviction the Council valuation of each flat was set at
R7,500. This, despite the fact that no house in Chatsworth
cost more than R2,500 to build. The subsidy from the National Discount Subsidy Scheme was R7,500. Thus, those
residents who chose the body corporate option would get

their dwellings for free. Residents still had to pay a R600

transfer fee. There were conditions. Arrears had to be settled.
The Council made provision for prospective owners to sign
mortgage arrangements to settle debts. Tenants would be accountable to banks at a stroke of a pen. Further, once part of
a body corporate,
constitutional fetters to evicting people no longer applied. These were civil matters, where the sheriff could
eject people on behalf of the banks or other property
owners without regard to human dignity . . . By getting

10

Figure 2. Chatsworth

rid of the houses that it rented out, Council would remove

an important mobilising subject . . . By privatising living
arrangements, collective memories of struggle would be
replaced by the immediacy of dealing with banks and
other lending institutions as individuals
(Desai, 2000, p. 48).
Organised protest by the community frustrated the Councils
attempts to promote the body corporate approach.
The strategy of the Council is essentially spatial. The
Council acts as a conduit for the capitalist appropriation of
space. In effects it facilitates the formal subsumption of the
mobilising object (flats) into the capitalist dynamic. Space
is now privatised. Private property, the essential building
block of capitalism is realised with the formation of the
body corporate. Ownership may well pass onto formal financial institutions as residents seek to upgrade or simply put
up dwellings as collateral. The formation of bodies corporate is an initial insinuation, a formal subsumption, into a
wider project to create stable, politically moderate, spaces.
The formation of the body corporate deterritorialises central and local state discipline. Discipline is reterritorialised
at the scale of the tenement. Bentams panopticon colonises the collective imaginary of the (prison) body corporate.
This is real subsumption, the management of the capitalist
mode of production. New relationships are created with the
formation of the body corporate: the generation of rents, the
micro-management of cost recovery through a new spatial
relationship based on the propinquity of the disciplinary apparatus. The rabble, anti-Masakane, ubuntu bashers have
no place in this bourgeois utopia, they must be displaced

to be replaced by the displaced ubuntu practitioners: the

responsible citizen who pays for services.
While strategies to off-load the governments housing
stock the process of commodification - has been continuing
apace, there has been a similar process of commodification of other basic services such as water and electricity.
The cost of water to domestic consumers is a case in
point. Since 1996, the average increase in the water tariff has been 19.195% per annum. In 2001 the water tariff
increased by 33.54%. Since 1995 water tariffs have increased by 183.81%. And this while Durban Metro Water
Services (DMWS) has improved the efficiency of its operations (Montaigne, 2002). Electricity charges have gone up
by 149% since 1995 (Durban Metro Electricity, 2000). It
is the poor in communities such as Bayview and Westcliff
which have been hardest hit.
Furthermore, the economic downturn has exacerbated
the problems of flat dwellers. The economic strategy followed by the government has led to the closure of a number
of clothing and textile factories (from approximately 450 to
around 150). The South African Clothing and Textile Workers Union (SACTWU), had a membership of 148,830 in
1996. By March 2002, this figure had shrunk to 103,792,
which represents a 30% decline. Many workers from these
areas have been thrown onto the streets.
The GEAR strategy followed by the government has had
a devastating impact upon the most disadvantaged people.
Firstly, tariffs which protected the clothing and textile industries have been removed, resulting in cheap imports flooding
the South African market. South African industry has been

11
unable to respond to sudden loss of protection, as a result many companies have closed down. There hasnt been
a proactive response by the government, other than castigating local industry for not being competitive enough.
This however, is part of the capitalist dynamic. It is globalisation at its efficient best those companies unable to
compete are either taken-over or have to close down. What
happens is that workers are thrown out of the system, becoming part of the reserve army of labour or the relative
surplus population. Ongoing work in Chatsworth has suggested that this phenomenon is clearly apparent. Skilled and
semi-skilled garment workers, leather workers and machine
operators have been either put out of work or transformed
into flexi-workers a casualisation of labour has occurred.
Their incomes are drastically reduced. They have not been
re-trained and are basically surplus to capitals requirements.
The closure of many factories has meant that there are fewer
jobs to compete for. People working in factories are forced
to work more intensively for lower rewards because of the
specter of the growing relative surplus population.
A socio-economic survey undertaken by the Institute for
Black Research (IBR) revealed the following: 76% of the
residents in Bayview and Westcliff were living below the
poverty datum line, 58% were unemployed, 42% were surviving on welfare grants of approximately R300 per month.
The majority of household heads were single mothers or old
age pensioners. The report suggested that arrears in rental
and services charges were due to a genuine inability to meet
payments rather than a culture of non-payment. The survey
found that
only 28.4% of the residents of employable age (18 to
60 years) were in formal employment, almost 40% were
unemployed. 17.9% are housewives, but desperately in
need of gainful employment. So employment is around
58%. 11.7% of the residents of employable age are dependent on welfare, which averages about R300 per
month. Furthermore, 41.6% of heads of households are
on welfare grants, 24.8% are unemployed and 31% are
in formal employment. The majority of household heads
subsisting on welfare grants are single mothers and pensioners over 60 years of age. It is hardly surprising
that households experience difficulty in paying rent and
services charges (Concerned Citizens Group, 1999,
p. 1).
It becomes increasingly apparent that global neoliberalism
in its hybrid scalar informed incarnation, craving a spatial
fix, is intent on destroying communities historically constituted through struggle (See Desais (2002), rendition on
post-apartheid community struggles). However, the spatial
fix is also the poisoned chalice for neoliberalism in its various scalar incarnations, because communities are engaging
in counter-hegemonic discursive struggle.
The community of Chatsworth is not unfamiliar with
struggle. Theirs is a struggle which has a historical geography. The bizarre eccentricity of apartheid acted as a
crucible for the collective history of people of Indian origin
in various movements: from particular areas of India, to the
East coast of South Africa, specifically Natal to townships

such as Chatsworth. Here the fabric of struggle and space

and spatial struggle was woven its racial character the
product of apartheid. For example, in July 1989, there were
clashes between police and the protestors from Chatsworth.
They were protesting the increases in rent tariffs (Mercury,
1989). In July 1994, just after the first democratic general
election, notices of eviction were served on 950 tenants who
were in arrears with rent, water and electricity payments.
Subsequently, there was a 4% increase in electricity tariffs.
Water and electricity disconnections soon followed. Durban
uses a consolidated billing system. This means that rates,
rent, water and electricity are included on one statement.
Arrears are calculated by crediting rentals, first; thereafter
water and lastly, electricity. Therefore, the electricity supply
is initially terminated in the disconnection process followed
by the water supply and finally by eviction. Rents, water
and electricity cannot be treated separately. They are linked
through the consolidated billing system. The withdrawal of
the state from the provision of any of these services impacts
on the other services and is in effect an act of privatisation.
Eviction is the private appropriation of a socially owned
good. The history of Chatsworth is replete with horror stories detailing the cruel inhuman treatment of Indian people
who were thrown out (some quite literally) of their (unwanted) homes (cf. Desai, 2000). Housing officials applied
the letter of the law stringently.
Increased tariffs by a post-apartheid administration
meant that by 1996 there were 573 and 417 tenants in the
Bayview and Westcliff areas of Chatsworth, respectively,
in arrears (Post, 1996). A decision was taken by the South
Central Council to write-off service arrears up to June 1996
(South Central Council Agenda, 19970529, p. 22). The
rationale seemed to be driven by the spirit of the Kempton
Park agreement (South Central Council Agenda, 1997
0529, p. 21). (The Kempton Park agreement was signed
between the apartheid government and the liberation movement committing themselves to a democratic South Africa).
The specter of arrears did not disappear, however. The establishment of a Hardship Fund, in March 1993 to help those
families with no income (later increased to R600 and R1,200
per month presently), did little to prevent the escalation
in arrears. The Hardship Fund used an arbitrary quantitative means test of poverty and showed little understanding
of the structural causes of arrears. Arrears, notwithstanding, the Executive Director (Corporate Financial Services)
reported that Council financed projects were operating at
a surplus! (South Central Council Agenda, 19980423,
p. 8). Nonetheless, the Council approved a 6% increase in
rent for 1998. The Council reported that rents were calculated according to a formula comprising the following
inputs: capital charges; administration; wages and sundries;
maintenance contribution and loss of rent contribution. The
capital charges refer to the historical cost of construction
of the dwellings. Construction was financed from central
government transfers, during the 1960s. In effect the inhabitants of Chatsworth were financing their own dislocation.
Perversely, the people of Chatsworth are being coerced into
settling an apartheid debt. Moreover, the plausible argument

12
that a substantial number of the inhabitants, 26% who have
lived there for over 30 years and over 50% who have paid
rentals for more than 16 years (Concerned Citizens Group,
1999), have paid many times the historical costs of their
dwellings suggests that a process of cross-subsidisation,
whereby the poor subsidise the rich has long been the norm.
Furthermore, around 15% of rent go towards rates. Tenants
are not to be charged for rates according to paragraph 7 of
a 1965 Sub-economic Housing Scheme Agreement of Tenancy (Concerned Citizens Group, 1999). It is evident that
hidden costs have contributed to arrears.
In 1999, just before the second general election in a free
South Africa, the Concerned Citizens Group (CCG) consisting of prominent leaders from the Indian community was
formed to garner the approximately 1 million Indian votes.
The CCG was aligned with the ANC. The Indian vote was
viewed as a key factor in the struggle for political power in
KwaZulu Natal. Leaders of the CCG met with staunch resistance when they arrived in Chatsworth. Many allegations
were made by community members regarding evictions, water and electricity disconnections and unemployment in the
area. A subsequent socio-economic survey conducted by the
IBR revealed widespread hardship. As a consequence, the
CCG stopped campaigning for the ANC and set itself firmly
against ANC neoliberal policy. The CCG quickly mutated
into an organisation, some would argue a conduit, to articulate the grievances of the poors (See Desai, 2002, for a
genealogy of this characterisation). It should be borne in
mind that the CCG was not the first such organisation in the
area. The Flatdwellers Action Committee was a fore-runner
to the CCG. It was formed by people who were in arrears
with their service payments and facing eviction.
The CCG together with the Bayview Flat Residents
Association (BFRA) and the Westcliff Flat Residents Association (WFRA) presented the socio-economic survey to
the City Council. A number of suggestions were made to
the Council regarding rental arrears, transfer of dwellings to
residents, the provision of water and electricity and general
improvements to the area. The Council considered the report at a meeting on 10081999, and provided its Director
of Housing with the brief to explore alternative housing for
indigent tenants. The CCG was also invited to participate in
the Housing Liaison Working Group, a body that provides
input on Council housing policy. However, at a meeting of
the Housing Liaison Working Group the representative of
the CCG staged a walkout. It was quite clear according to
the CCG that the Housing Liason Working Group was working against poor communities by supporting evictions. The
tenor of a Council report on interactions with the CCG was
decidedly hostile, with a decision being taken not to liaise
with the CCG unless they were part of the Housing Liaison
Working Group. The Councils hard-line approach could
be read in a number of ways. Firstly, the Housing Liaison
Working Group was part of a discursive apparatus to foster
consensus and defuse awkward situations before they got
to the Council. Secondly, the Council had already decided
on the fate of those who were in arrears. It was apparent
that the cancellation of the arrears of tenants was not an op-

tion the Council suggested that the debt recovery process

continues. Ultimately, the Council wanted the flats off their
books. The Council emphasised that alternative housing be
found for those who could not afford to settle their arrears.
The alternative was the tiny RDP houses which were even
smaller than the flats. Housing legislation, the Prevention of
Illegal Eviction from and Unlawful Occupation of Land Act
(Act 19 of 1998) prevented the Council from evicting tenants
without first providing alternative housing.
The Prevention of Illegal Eviction from and Unlawful
Occupation of Land Act (Act 19 of 1998), notwithstanding,
there were a number of confrontations between Council staff
and the police, who were attempting to evict people from
their homes on the one hand and flat residents and members
of the CCG on the other. It is important to note that the
CCG played an important role in galvanizing the community
to strategically engage the Council. These were not simply
fragmented happenings, but strategic interventions and insinuations directed at winning material benefits and forcing
the Council to re-think its policy. Workshops were held
for community leaders educating them about the different
incarnations of neoliberalism. Alliances were also formed
horizontally, with communities engaged in similar struggles,
such as those in Isipingo and Mpumalanga township (located
about 40 km west of central Durban). Out of this a regional
co-ordination structure developed the Concerned Citizens
Forum. Alliances were also formed nationally with organisations in other regions, such as the Anti-Privatisation Forum
in Johannesburg and the Anti-Eviction Campaign in Cape
Town. The struggle against neoliberalism has thus taken on
a geography whose goal is the recreation of the spaces of
liberation.
Conclusion
Negri and Hardt (2000) refer to the growing superfluity of
the nation state as Empire that is (re)constituted at a global
scale and ruled by proxy through the multi-lateral organisations such as the World Bank and the IMF. Empire is
the global capitalist state. But Negri and Hardt privilege the
global scale. While at an abstract level, there is an homogenisation process at work Marxs formal subsumption
it is at the local level, the scale of the everyday individual,
household, community that Empire is being contested and
rethought.
I have attempted to understand neoliberalism at different
geographical scales: the global, national and local scales. I
subscribe to the view that neoliberalism is capitalism operating on a global scale (Harvey, 2000). It is clear that when
the liberation movement was unbanned in the early 1990s, it
became an open target for the influences of global capital. A
process of primitive accumulation had to take place. Since
the era of colonisation was supposedly over, the separation
of the ANC from its policy of nationalisation (ownership
of the means of production) had to take place insidiously.
The manner in which this was achieved, I would submit
was discursively use of highly technical languages and
expertise. It is evident that the ANC did not totally embrace

13
World Bank policies. But, I would submit that the ANC
was influenced by a discourse of neoliberalism which had
already colonised institutions such as the World Bank. It is
little wonder that Alan Gilbert could muse perhaps South
Africa merely showed that there are much more powerful
hegemonic forces operating than the World Bank (Gilbert,
2002, p. 1911). I would suggest that the process of discursive
primitive accumulation was ultimately realised through the
ANC governments espousal of the GEAR policy.
The general law of capitalist accumulation suggested by
Karl Marx refers to the growing poles of a rich minority
on one end and the majority of the poor at the other end.
This law is not set in stone but subject to flux and flow. The
economic crisis is South Africa is part of this dynamic. The
impact of this law is apparent in the growing pool of the
under- and unemployed. In South Africa, this component of
the working class is doubly oppressed, in both the sphere
of production and the sphere of reproduction (at home).
There seems to be a spatial dimension to this law. Areas
which are inhabited by the poorest people are now targets
for the withdrawal of basic services, for example the Chatsworth area in Durban. The uniqueness of the South African
situation, demands that due consideration be given to the
impact of apartheid. Apartheid geographically locked-in racial inequalities. The poorest areas under apartheid were the
black areas. There is no difference almost a decade since
its demise. The reluctance of the post-apartheid state to progressively engage with this issue will ensure that apartheid
remains inscribed in the South African landscape, this time
not as race, rather as class. Moreover, the local state is
facilitating the real subsumption of the working class into
a capitalist dynamic. However, there is the growth of an
incipient class consciousness among the oppressed, a collective consciousness being shaped through struggle over the
everyday. Increasing mobilisation is occurring as spaces of
oppression are used as the seedbed for a space of liberation.

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