The Political Economy of Identity Politics

The Freedom Charter . . . calls for redistribution, but not nationalisation of land; it provides for nationalisation of mines, banks, and monopoly industry, because big monopolies are owned by one race only, and without such nationalisation racial domination would be perpetuated despite the spread of political power.

—Nelson Mandela, "I Am Prepared to Die," 1964

Liberal democrats are coded to debate the relationship between "freedom" and "equality." Valuing both, they forever are arguing about what each means, about how to balance them, and about what it means to speak of political equality when freedom allows the rich to bring more resources to bear on political affairs. Does the influence of wealth in making and enforcing law expose liberal democratic talk of equal opportunity as hollow or is it the necessary outcome of freedom? Can opportunity be equal in societies in which wealth is inherited and can freedom be meaningful in societies in which equality reigns supreme? These theoretical debates and practical conflicts among democratic liberals are real and intense, but they also are conducted within parameters. Liberal democrats of all stripes agree in drawing a principled distinction between the "public" and the "private"; in regarding the public as the realm in which members are equal and the private as the realm in which inequalities emerge as the inevitable consequence of freedom; and in treating equality in the public realm—in citizenship and under the law—as providing important justification for inequality in other realms, notably the economic. Equality under the law performs the indispensable service for liberal democrats of proving that economic inequality is legitimate, that it is the by-product of freedom and equal opportunity.

Consider, therefore, the problems that awaited the African National Congress (ANC) when, along with some junior parties, it was elected to govern South Africa in 1994. Democratic states are suited to justifying economic inequalities, much better suited than apartheid had been, but South Africa's economic inequalities are especially difficult to justify. They did not result from the interplay of freedom and equal opportunity or even from the failure to level playing fields for all of the players. Fields never are perfectly level, of course, but that is not the problem facing the ANC government. The problem is that South Africa's inequalities were made intentionally and systematically, as the raison d'être of white supremacy. The standard justification for the higher living standards of some citizens—that they prove merit, that they are just desserts—do not work for whites in South Africa. Economic inequalities are difficult to explain away and difficult to rectify.

Capital holds the same advantages in South Africa that it holds in most developing societies. It is scarce and mobile, whereas labor is plentiful and stationary. Recognizing these as the facts of life, the ANC, after some hesitation, declared itself in favor of capitalist democracy during negotiations on the new constitutional order. Economically, the ANC government has ditched the anticapitalist rhetoric of the anti-apartheid struggle, defends in principle and upholds in practice the institutions of capitalist society, and is implementing orthodox neoliberal economic policies. Politically, the ANC government respects the constitution and observes democratic forms, promotes stability and enforces order, responds to private interests of various sorts, manipulates racial politics, and calculates party and personal advantage. But the most difficult challenge facing the ANC government is neither to accommodate the demands of capital nor to respect the requirements of democracy. It is to mediate between the two of them.

The ANC sees the fate of capital, in the form of mostly white-owned businesses, and democracy, in the form of mostly poor Africans, as linked by a quid pro quo. As the ANC put its part of the bargain, "The democratic state has to attend to the genuine concerns . . . of private capital if it [is] to ensure industrial stability, sustainable economic growth and a secure political democracy."¹ In exchange, "private capital must recognise that the democratic state...