55
Business and the South African Transition Itumeleng Makgetla and Ian Shapiro Draft: February 20, 2016 Abstract This paper explores the under-appreciated role of business in negotiated transitions to democracy. Drawing on our interviews of key South African business leaders and political elites, we show how business played a vital role in enabling politicians to break out of the prisoners’ dilemma in which they had been trapped since the 1960s and move the country toward the democratic transition that took place in 1994. Business leaders were uniquely positioned to play this role, but it was not easy because they were internally divided and deeply implicated in Apartheid’s injustices. We explain how they overcame these challenges, how they facilitated negotiations, and how they helped keep them back on track when the going got rough. We also look at business in other transitional settings, drawing on South Africa’s experience to illuminate why business efforts to play a comparable role in the Israeli-Palestinian conflict have failed. We end by drawing out the implications of our findings for debates about democratic transitions and the role of business interests in them. Department of Political Science, P.O. Box 208301, New Haven, CT 06520-830. Phone:(203) 432-3415; Fax: (203): 432- 93-83. Email: [email protected] or [email protected]

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Page 1: Business and the South African Transition

BusinessandtheSouthAfricanTransition

ItumelengMakgetlaandIanShapiro

Draft:February20,2016

Abstract

Thispaperexplorestheunder-appreciatedroleofbusinessinnegotiatedtransitionstodemocracy.DrawingonourinterviewsofkeySouthAfricanbusinessleadersandpoliticalelites,weshowhowbusinessplayedavitalroleinenablingpoliticianstobreakoutoftheprisoners’dilemmainwhichtheyhadbeentrappedsincethe1960sandmovethecountrytowardthedemocratictransitionthattookplacein1994.Businessleaderswereuniquelypositionedtoplaythisrole,butitwasnoteasybecausetheywereinternallydividedanddeeplyimplicatedinApartheid’sinjustices.Weexplainhowtheyovercamethesechallenges,howtheyfacilitatednegotiations,andhowtheyhelpedkeepthembackontrackwhenthegoinggotrough.Wealsolookatbusinessinothertransitionalsettings,drawingonSouthAfrica’sexperiencetoilluminatewhybusinesseffortstoplayacomparableroleintheIsraeli-Palestinianconflicthavefailed.Weendbydrawingouttheimplicationsofourfindingsfordebatesaboutdemocratictransitionsandtheroleofbusinessinterestsinthem.

DepartmentofPoliticalScience,P.O.Box208301,NewHaven,CT06520-830.Phone:(203)432-3415;Fax:(203):432-93-83.

Email:[email protected]@yale.edu

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OnMarch21,1960,policeopenedfireonademonstrationagainstSouthAfrica’s

passlawsinSharpeville,fiftymilessouthofJohannesburg,killing69people.The

callousnessofthemassacre–manyvictimswereshotinthebackwhilefleeing–

triggeredamajorescalationintheconflictbetweentheAfricanNationalCongress

(ANC)andtheNationalParty(NP)government.Demonstrationseruptedatmass

funeralsforthevictimsandprotestersmarchedonpolicestationsacrossthecountry.

TendayslaterthegovernmentbannedtheANC,declaredaStateofEmergency,and

arrestedhundredsofactivists.TheANCendeditscommitmenttononviolence,formeda

militarywingUmkhontoweSizwe(“SpearoftheNation”–MK),andsoonlaunchedits

firstattacksongovernmentinstallations.Foralmostthreedecades,repressionand

violentresistancefedeachother.InFebruary1990,whenPresidentFWdeKlerk

announcedtheunbanningofoppositionorganizationsandtheimminentreleaseof

NelsonMandelaandallotherpoliticalprisoners,thecountrywasonthevergeofcivil

war.1Yet,fouryearslaternegotiationsledtosuccessfulelections,consummatinga

peacefultransitiontodemocracy.

Theresultsurprisedtheworld,asitshouldhavedone.Theconflictembodieda

classicprisoners’dilemma,inwhichthebestresultforbothsides–acooperative

solution–isunavailablebecauseeachplayer’simmediateincentiveistodefectno

matterwhattheotheronedoes.ThegovernmentandwhiteSouthAfricansit

representedexpectedthatgivingintooppositiondemandswouldunleashatidalwave

ofswartgevaar(“blackdanger”)heraldinga“totalonslaught”ofcommunismthat

woulddestroycivilizationastheyknewit.2OfficialANCpolicywastocreateanon-

racialdemocracy,butmanywhitesbelievedtheirassetswouldbeexpropriatedand

industriesnationalized,reflectingtheANC’slong-standingalliancewiththeSouth

AfricanCommunistParty(SACP)anditscommitmenttoasocialisteconomy.TheANC

wasstuckwiththerealitythatnonviolentresistancesinceitsfoundingin1912had

yieldedthecreationofapartheidstatein1948,forcedremovalsinthe1960s,violent

repressionofallcallsforchange,andexecutionandimprisonmentofmanyofits

leaders.Anythingotherthancontinuedresistanceseemedguaranteedtobringfurther

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entrenchmentoftheapartheidorder,whichtheNationalPartyshowednosignsof

givingup.TheANC’sdominantstrategywastoresist.

Hencethedilemma.Withthegovernmentincreasinglycommittedtotheuseof

forcetosquashdissent,theANCthoughtitfoolishtorelinquishitsarmedstruggle.And

withtheANCunwillingtoforsakethearmedstruggle,thegovernmentjudgedcontinued

repressionnecessary.Theconflictonthegroundpolarizedbothsides,trappingthem

intoadownwardlyspiralingequilibrium.Theself-reinforcingcycleofrepressionand

resistancemadethecooperativesolutionevermoreelusive.Therewasarealdanger

thatthecooperativepossibilitywoulddisappearentirely.

Thatkindoftragedyhasbeenseenelsewhere.Intheearly1990s,Israelisand

Palestiniansoverwhelminglysupportedtheagreementonatwostatesolutionthathad

painstakinglybeencraftedinOsloandwouldhaveendedtheirdecadeslongconflict.

ButadisgruntledIsraeliright-wingerassassinatedIsraeliPrimeMinisterYitzhakRabin

duringthefinalstagesofnegotiationsinDecemberof1995,andthetalkscollapsed.The

escalatingviolenceandrepressionthatfollowedtooktheOslopossibilityoffthetable,

asPresidentClintonlearnedwhenhetriedtoreviveitinthesummerof2000.Bythen,

peopleonbothsideshadsufferedsomuchthattheirmutualhatredandmistrust

preventedtheiracceptingtermsthattheyhadembracedfiveyearsearlier.3A

comparablescenariowasarealpossibilityinSouthAfrica,resultinginafull-blowncivil

warthatwouldhavebeencatastrophicallycostlyforall.

OurgoalhereistohelpilluminatehowSouthAfricansavoidedthisoutcome,

whichwaswidelyexpectedatthetime.WebegininPartIbyexplainingwhythe

prevailingpessimismwaswarranted.Theprisoners’dilemmaSouthAfrican’sfacedwas

embeddedindecadesofbitterconflict,andthestandardpathsoutofitwereblocked.

Spoilersinbothcommunitieswereunalterablyopposedtothesettlementthat

reformersinthegovernmentandmoderatesintheANChopedtoestablish.Thestakes

werehighandescalating.Surmountingtheobstaclesrequiredleaderswithunusual

capacitiesforempathyandrisk,4buttheydidnotfalloutofthesky.Peoplewithfew

reasonstotrustoneanotherhadtodevelopsuchreasons,andthenactonthemand

keepactingonthem,evenaspowerfulgroupsonbothsidesoftheconflictsoughtto

underminetheirefforts.

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OurthesisisthatSouthAfricanbusinesselitesplayedadecisive,yetunder

appreciated,roleinfacilitatingthisresult.Businessleaderswereunlikelymidwivesof

thetransitionbecausebigbusinesshadaccumulatedmassiveprofitsinahighly

uncompetitiveeconomy,aidedinlargepartbytheoppressiveapartheidregime.Yetthe

country’seconomicelitescametoseethattheirpoliticalleaderswereclingingtoa

statusquothathadbecomeawastingasset.TheycouldhelpBothaandthe

conservativeelementsofwhitesocietyrearrangedeckchairsonasinkingship,leading

toanunforeseeablefutureattheendofabloodyroad.Ortheycouldhelpbuilda

climateoftrustinwhichthepoliticalleaderscouldmovethecountrytowarda

cooperativefuture.Paradoxically,takingthispathwouldmeanopenlydefyingan

increasinglymilitaristgovernmentandreachingouttoenemieswhofordecadeshad

promisedtonationalizetheeconomyandexpropriatetheirill-gottengains.

Howbusinesselitescametoperceivetheirevolvingoptionsisoursubjectin

PartII.Thereweexplainwhytheimperativetoquellescalatingindustrialunrest

changedthethree-partrelationshipamongbusiness,labor,andgovernment,andwhy

theglobalcollapseofcommunismledeconomicelitestoviewatransitiontodemocracy

inanewandmorefavorablelight.InPartIIIwedescribetheformationofabusiness

organization,theConsultativeBusinessMovement(CBM),anddetailitsvariousrolesin

thetransition.WeexplainhowtheCBMcreatedtheclimateandrelationshipsthatwere

essentialtoresolvingthetrustproblemattheheartoftheprisoners’dilemma,andhow

theyworkedtopreventitsresurfacingasinevitablecriseseruptedduringthe

transition.IttookyearsofcostlyeffortbytheCBMleaderstobuildtheirreputationas

honestbrokers,toorganizeandsustaincivilsocietygroupstostempoliticalviolence,

andtoconvincepotentialspoilersnottoboycottandderailthefirstdemocraticelection

inApril1994.

Evolvingbusinessinterestsmadethispossible,butitwasnoteasy.Businessis

nevermonolithic,andvariouslysituatedSouthAfricanbusinesselitesviewedthe

situationandchoicesbeforethemdifferently.InPartIVwetakeuptheresulting

politicalandcollectiveactionproblemsthatbusinessleadershadtosolve,oratleast

manage,amongthemselvesinordertobeeffective.Thisinvolvedtakingadvantageof

theunusualstructureofbigbusiness,whichwashighlyconcentratedbutnonetheless

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integratedacrosstheeconomy.Businesselitesalsohadtodevelopandsustaina

delicatedualrole:theyhadtoensurethatkeyprotagonistsonbothsideswouldsee

themassufficientlyindependenttobetrustworthyduringtheperiodsofgreatest

danger,buttheyalsohadtobeseenascommittedtoachievinganon-racialdemocracy

andwillingtopaysignificantcoststoachieveit.Weunderscorehowimportant,if

challenging,thiswasinPartVviaacomparativelookateffortsbybusinesselitesto

haveasimilarimpactontheIsraelPalestineconflict.Theretheeconomyisdifferently

structured,economicandpoliticalelitesviewthestatusquodifferentlythantheydidin

SouthAfrica,andbusinessleadershavenotmanagedtofashionacomparablerolefor

themselves.

InPartVIweturntotheimplicationsofouranalysisforthestudyofdemocratic

transitions.Therewearguethat,thoughnegotiatedtransitionscanneverbepredicted,

itispossibletoimproveourunderstandingofthefactorsthatmakethemmoreandless

likelytostartandtosucceed.Wecannotsaythattherewouldhavebeennonegotiated

SouthAfricantransitionwithouttheenablingparticipationofbusiness.Butitisdifficult

toimaginehowitcouldhaveoccurredwithouttheactiveinvolvementofsomesemi-

independentgroupwiththeheft,status,andcommitmentthattheCBMbusinesselites

displayed.Politicalleadersonbothsideswhofavoredanegotiatedsettlementneeded

themtobuildandsustaintherequisitetrusttoescapetheirprisoners’dilemma,

hammeroutthetermsofanacceptabledeal,anddefenditagainstthespoilersonboth

sides.ItishardtoseewhoelsecouldhaveplayedthisroleinSouthAfrica,anditis

doubtfulthatnegotiationsincomparablesettingscouldsucceedwithoutcomparable

help.

SeveralscholarsoftheSouthAfricantransitionhavefocusedonfactorsthat

makeitmorelikelythatregimeeliteswillpreferdemocracytoautocracy.5Butitisone

thingtoprefer,oratleastbeopento,anoutcomeandanothertoreachitin

circumstancesthatprevailedinSouthAfricabefore1990.Ourgoalistoilluminatethe

unlikelypaththatledtothatresult.Weexplainhowregimeelitesmanagedtocommit

themselvestonegotiationsduringanongoingconflictthathadbecomelockedintoan

iteratedprisoners’dilemmawherethestatusquowasamutualdefection.This

malevolentequilibriumhadpersistedthroughmultipleiterationsovermanydecades

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andshowednosignsofending.Yetitdid,anoutcomethatdependedvitallyonSouth

Africanbusinessinwaysthathaveyettobefullyappreciated.

I.Theworstkindofprisoner’sdilemma

Acooperativesolution,inwhichbothsidesagreetonegotiate,offeredthe

prospect,butnoguarantee,ofadesirablesettlement.Negotiationscancollapsefor

manyreasons,promptingareversiontoviolentconflictashappenedinIsrael-Palestine

after1995.Evenwhennegotiationsdosucceed,isnotobviousexantewhatagreement

thepartieswillarriveatwhentheycommittothecooperativepath.TheSouthAfrican

governmentwantedconstitutionallymandatedpowersharing,otherprotectionsforthe

whiteminority,strongfederalism,anamnestyprocess,protectionofcivilservicejobs,

andmanyotherthingsthattheANCviewedwithvaryingdegreesofantipathy.Its

agendaconsistedofmajorityrule,economicredistribution,landreform,large-scale

nationalizations,andothermeasuresthatwereanathematothegovernment.Theses

issueswerecomponentsofwhatJamesFearon(1995)describesasabargainingrange:

asetofpossibleoutcomesthattheplayersseeasworthnegotiatingoverinviewofthe

costsoftheongoingviolentconflict.6

Eventscould,ofcourse,haveprovedthemwrong.Neithersideknewwherethey

wouldendupifnegotiationsstarted,andbothknewthattheotherwouldhaveto

extractminimumconcessionsforthegametobeworththecandleforthem–evenifthe

incompleteinformation,bluffing,andgenuineuncertaintythatinvariablyattends

negotiationsmadethisreservationpricehardtoidentify.Thereisalwaysthechance

that,oncethingsclarify,eachside’sreservationpricewillturnouttobeunacceptableto

theother.Thatwouldrevealtheapparentbargainingrangeaschimerical,scuttlingthe

negotiations.Buttheprevailingequilibriumofmutualdefectionwasworse.Itruledout

thepossibilityofanegotiatedsettlement,perpetuatingasituationinwhichneitherside

couldwinunilaterally,yetbothcouldimposesignificantandincreasingcostsonthe

other–erodingeveryone’squalityoflifeandthreateningtheirsecurity.7Continuing

defectionpromiseddebilitatingcivilwar,orperhapsamilitarycouporsomeotherhard

lineauthoritarianorder.

ItisremarkablethatSouthAfricansescapedtheirprisoners’dilemmabecause

thestandardwaysoutofitwereunavailable.Inthetextbookformulation,wheretwo

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prisonersmusteachdecidewhethertoselloneanotherouttoprotecttheirownhide,

theirinabilitytocommunicatekeepsthecooperativesolutionoutofeitherprisoner’s

grasp.Iftheycouldagreetokeepsilent,theprosecutorwouldlacktheevidenceto

imposeanythingmorethanaminorsanctiononboth.Sosheisolatesthem,offering

eachthesamedeal:ratoutyouraccompliceandyougetoffscotfreeifheisfoolish

enoughtotrustyou,andIwillguaranteeyoualightersentenceifyoutalkratherthan

staymumifhetestifiesagainstyou.Whethertheprisonerswouldhavetrustedeach

othereveniftheyhadbeenabletocommunicateisatopicforgametheoryseminars,

butinthetextbookcasetheprosecutorusestheirisolationtoensuretheircontinuing

mutualmistrust.Thismakesdefectionthedominantstrategyforeach,nomatterwhat

theotheronedoes.

ThetwosideswerenotisolatedinSouthAfricainthe1960sandafter,butthey

mightaswellhavebeen.ThemorerepressivetheSouthAfricanstatebecame,theless

reasontheoppositionhadtotrustanythingthegovernmentproposed.Andescalating

blackresistancefedwhitefearsofexistentialannihilation.“Onesettler,onebullet!”was

themuch-publicizedbattlecryofthePanAfricanistCongress(PAC),whichhadbeen

banned,anditsleadersimprisoned,onthesamedayastheANC.

Anyleaderwhoproposedanopeningtotheothersidewouldquicklyhavelost

grassrootssupport.ThiswasillustratedbyInkathaFreedomParty(IFP)leader

MangosuthuButhelezi’smarginalizationintheliberationmovementoncehebegan

makingoverturestothegovernmentinthelate1970s.8In1985,whenMandeladecided

thatthesituationwasgettingsobadthathehadbetterexplorethepossibilityoftalks

withthegovernmentfromprison,herealizedthathewouldhavetokeepthissecret.He

wastakinganenormousriskthatwouldlikelyfinishhimasaleaderintheANCif,as

wasquitepossible,hisgambitbecamepublic.9

TheNPgovernmentwasinacomparabletrap.WhenP.W.BothabecamePrime

Ministerin1978heannouncedaseriesofreforms,buildingonhiswidelyquoted

declarationthatwhiteSouthAfricansmust“adaptordie.”Thereformswerecosmetic,

buttheyraisedexpectationsthat“farreachingchangewasontheway.”10Itsoon

becameclear,however,thatBothacouldnotcedegroundtohisopponents;hewastoo

dependentonthehardlineNPfactionswhobelievedthateffortstocooperatewiththe

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ANCweredangerouslyfutile.BothabacktrackedinAugust1985,dashingthe

expectationswithhis“Rubicon”speechtoParliamentwhichconfirmedthattherewas

noprospectofhisreleasingMandelaornegotiatingrealchangewiththeANC.The

speechreaffirmedthehardlineNPself-imageofanembattledstatecommittedto

protectingwhiteSouthAfricansfromviolentrevolutionariesbentonleadingthe

countryintodestruction.Itdashedoppositionhopesathomeandstrengthenedcritics

of“constructiveengagement”withtheapartheidregimeabroad.11TheUnitedStates

CongresspassedsanctionsoverPresidentReagan’svetothefollowingyear.12

WhateverreformistimpulsesBothahadentertainedweresoonscrapped.He

strengthenedthemilitarybyestablishingtheNationalSecurityManagementSystem

andenhancedthesecurityministries,creatingtheStateSecurityCouncilwithitsown

permanentsecretariat.Comprisedofministersfromthelawandorderdepartments,it

waschairedbyBothapersonallyandsoondisplacedthecabinetasthesiteofkey

decision-makingasthegovernmentpursueda“totalstrategy”againstwhatthey

perceivedasthe“totalonslaught”bytherevolutionaryforces.13Thecircleofhawks

aroundBothacontinuedpushingforanon-cooperativesolution,believingmilitary

confrontationpreferabletogivingintotheotherside.

RobertAxelrod’sresearchoniteratedprisoners’dilemmassuggeststhatthere

areconditionsthatcanpromotecooperation,butthesewerenotpresentinapartheid

SouthAfrica.Axelrod’sinitialcomputersimulationssuggestedthatadominantstrategy

isTitforTat(TFT):cooperateinthefirstroundandthenmimictheotherside.InSouth

Africaafter1960mutualdefectionwasthestatusquo,sothatTFTreinforcedit.As

Axelrodnotes,“Onceafeudgetsstarted,itcancontinueindefinitely.”14

InsubsequentworkAxelrodconsideredwaysoutofthissituation.Playerscan

testthewaterswith“generoustit-for-tat”(cooperatinginthefaceofanopponent’s

defection)and“contritetit-for-tat”(cooperatingwhentheopponenthasdefectedin

responsetotheirearlierdefection.Theycannotdoittoooften,however,orthese“nice”

strategieswillbeinvadedbe“nasty”ones.Thebiblicalinjunctionalwaystoturnthe

othercheekwouldquicklyleadyoutobeplayedforasucker.Evenregularuseoftitfor

twotatsistoogenerous;itwillbeinvadedbynastystrategies.Makingtherestorative

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moveaboutonetimeintenseemsfeasible,however.Itputsadefect/defectiterated

prisoners’dilemmabackonamutuallycooperativeTFTpath.15

Buttheserestorativestrategiesdependontwoconditionsthatwerenotably

missinginSouthAfrica.Thestakesneedtobecomparativelylowbothtomakeiteration

possible(lifeanddeathsituationsarenotiterative)andtopermitpeopletotestthe

waterswithbabystepsbeforemakingbiggerones.16Theyhavetobeabletostickatoe

inthewater,notplungeinheadfirst.InSouthAfrica,bycontrast,thestakeswerehigh

andincreasing.Evenifanorganization,suchastheANCortheNPgovernment,could

viewthesituationasmultiplyiterated,theindividualleadersfacedmassivecostsinthe

eventoffailure,anditwastheywhohaddecidewhetherornottoexploreacooperative

opening.1718

Second,Axelrod’scooperativeTFTequilibriumdependsonuncertaintyabout

thefuture.Ifeveryoneknowswhichwillbethelastround,thenthedominantstrategyis

todefectinthepenultimateround.Buttheneveryoneknowswhichisthepenultimate

round,makingdefectionontheroundbeforethatthedominantstrategy–andsoby

backwardsinductiondefectionbecomesthedominantstrategyfromthestart.

Forestallingthisdynamicdependsnoone’sknowingwhichroundwillbelast.The

situationisespeciallybadwhentherearebothhighstakesandcertaintyabouttheend

game.Thisiswhybankrunsaresohardtostoponcetheystart.Thestakesarehighand

increasingandtheendgame–collapseofthebank–increasinglyobvioustoall.The

resultingpanicbecomesself-fulfilling.

ThesituationthatunfoldedinSouthAfricaresembledabankrunmorethanone

ofAxelrod’svirtuousTFTsimulations.Thestakeswerehighandgrowinganda

catastrophicendresultwasincreasinglylikely.BythetimeprotestsexplodedinSoweto

andotherblacktownshipsin1976,growingnumbersofpeopleonallsidesbelieved

thattheendgamewascomingalltooclearlyintoview.Thousandsstreamedoutofthe

countrytojointheANC’smilitarywinghopingtoliberateSouthAfricabyforce.19Two

yearslater,hardlinerPWBothabecamepresident,committingthecountrytoacourse

ofmilitarizationtoprotectitfromthe“totalonslaught.”Nicknamedthe“BigCrocodile,”

BothausedthemilitarytofighttheANCandengageinproxywarsinnearbystates

whilepouringpoliceintoblackcommunitiesathome.Thefuturelookedincreasingly

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bleakasthepresidentduginhisheelstopreserveaSouthAfricaunderwhitecontrol.If

therewasgoingtobeanyimpetustohalttheescalatingcycleofviolentrepressionand

resistanceitdidnotlooklikeitwasgoingtocomefromthepoliticalleadershipson

eitherside.20

II.ChangingSouthAfricanBusinessInterests

InSeptember1985AngloAmericanChairmanGavinRellyledadelegationto

meettheANC’sexiledleaderOliverTamboatagamereserveineasternZambia.Anglo

Americanwasagiantminingconglomeratethat,accordingtooneestimate,accounted

foraquarterofthecountry’seconomicactivity.21Themeetingwasawatershedevent

thatunnervedthegovernment,provokingPresidentBothatoattackRellyferociously

fordisloyaltyandtoforbidplannedfollow-uptripsbystudentandchurchgroups.22But

businessgroupscontinuedtripstomeetwithexiledANCleadersinwhatsoonbecame

knownastheLusaka“trek”or“pilgrimage”andthoughthegovernmentmadethreating

noisesitdidnotbanthemoutright.23

ItwasagutsymovebyRelly,inflagrantviolationofthegovernment’s

suppressionofcommunismlaws.TheSecurityPolicecoulddetainpeople

incommunicadoforupto180dayswithoutcharges,authoritythathadbeenusedto

holdsuspectedmembersoftheSouthAfricanCommunistParty(SACP)andfellow

travelersforyears–simplyre-arrestingthemonthedayoftheirrelease.Nooneof

Relly’sstaturehadbeendetainedunderthe180daylaw,butthegovernmentregularly

usedittointimidatepeoplewhoshowedaninterestinbannedpoliticalparties,

organizations,andindividuals.24Itwasfarfromclearbeforethetripthattheywould

notactagainsthim.25

Onapersonallevel,theLusakameetingsucceededinunderscoringthe

participants’sharedcommitmenttothecountry’sfuture.Businessleadersdiscovered

thatANCleaderswerenotthewild-eyedterroristsdescribedbythepresident.Their

suitscontrastedwiththebusinessmen’sinformalkhakiattire,signalingtheirintentto

engageseriouslyonSouthAfrica’sfuture.26Returninghome,RellyreferredtotheANC

leadershemetas“myfellowSouthAfricans”onnationaltelevisionafterthetrip.27

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Relly’scontroversialgambitwasthesubjectoftensedebateamongAnglo

executives.SomeopposedtheANC’sstrategyandwereafraidforthemselvesandthe

company,butothersworriedaboutthecostsofnotinterveninginSouthAfrica’s

deterioratingandincreasinglyrepressivepoliticalstalemate.Inonetellingremark,the

headofanAnglosubsidiarystoodupataboardmeetingtoask:“Gentlemen,whichone

ofyouwantsthiscompanytoberememberedastheI.G.FarbenofApartheid?”28But

HitlerhadsecuredsupportfromGermanbusinessleadersbyintimidation;theyquickly

fellintolineafterhejailedafewrecalcitrantexecutivesearlyinthewar.29

Understandably,someatAnglolackedthestomachtoriskthatkindofconfrontation.

HarryOppenheimer,Relly’smentorwhohadsteppeddownasChairmanthethreeyears

earlier,opposedtheplanstrenuouslyandtriedtoforbidit,butRellywentanyhow.3031

Relly’sdecisionreflectedthechangedterrainthatSouthAfricanbusinessfaced

by1985.Traditionally,SouthAfricanbusinesshadavoidedpolitics,embracingthe

conventionalattitudeinauthoritariansettingsthat“thebusinessofbusinessis

business,andleavepoliticstothepoliticians.”32ManyinthewhiteEnglishspeaking

businesselitedislikedapartheidandtheincreasinginternationalopprobriumit

brought,butmost–likeOppenheimer(anoppositionMPfrom1948to’57whenhe

tookoverthecompanyfollowinghisfather’sdeath)–believedthatexpandingtheblack

franchisehadtobegradualandtheydidnotwantaseriousconfrontationwiththe

government.Businesselitesalsobenefitedfromstatecoercion,whichkeptwagesdown

andlaborquiescent.33However,theeconomicfalloutfromapartheidbegan

accumulatinginthe1970s,makingtheirapoliticalstanceincreasinglycostly.34

Theinitialfaultlinewasindustrialpeace.AsmanufacturingexpandedinSouth

Africainthe1960s,thenumberofindustrialworkersgrew.Companiesrelied

increasinglyonalimitedsupplyofrelativelyskilledworkerswhosewageswerekept

lowbyapartheidlaborinstitutions.35Thissituationrepresentedapotentmixforlabor

unrest,butlaborlawsdidnotrecognizeblacksasemployeesandfromthe1950s

forbadeblackworkersfromjoiningregisteredunions.Staterepressionofanti-regime

politicalpartiesinthe1960salsodepressedeffortstoorganizeblackworkers.This

suitedbusinessownersuntiltheeconomytookoffinthe1960s,butitwasatickingtime

bomb.

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Miningwageswerenotattractive.Earningsforblackunskilledworkersin

mininghadstagnatedinrealtermsfrom1911to1970.Astheeconomyboomed,

industrybegantoattractlaborawayfromtheminesandtheapartheidlaborregime

begantochafe.Anglo’spressuretoincreasewagesfinallyledtochangesinthe1970sas

theregionalsupplyofmigrantstightenedandacommodityboomleadtoincreasesin

miningrevenue.Thechamberofminesalsobegancampaigningforinfluxcontrol

reformstostabilizetheirworkforce.36

Industrialmilitancyexplodedintheearly1970s.Thewildcatstrikesthat

eruptedinDurban1973wereminorcomparedtowhatwouldunfoldinthe1980s,but

theyendeddecadesoflaborquiescence,renderingthemines,inparticular,

ungovernable.37LeadersatAnglo,thecloselyalliedDeBeersmininggroup,andother

majorcompaniesthoughtitimperativetolegalizeblackunionssothatcorporatist

settlementscouldbenegotiated.38Theyalsowantedastableworkforcethatwould

enablethemtoholdontoskilledworkers.Fosteringapoolofskilledblackworkers

wouldhavetheadditionalbenefitofboostingdomesticdemand,industrialistshoped,

againstabackdropofdomesticrecession,oilboycottsagainstSouthAfricaandfalling

commoditypricesinthe‘70s.39

Oppenheimerpubliclyvoicedhissupportforblackunionsin1975,articulating

thepositiondevelopedin-housethatthecompanyneededtounionize.Thegovernment

resisted,butafterseveralyearsofbusinesslobbyingandthe1976Sowetouprising

appointedacommissionrunbyafavorablyinclinedacademic.Thegovernment

acceptedtheWiehahnCommission’srecommendationsandin1979,blackunionswere

legalizedandgrewrapidly.IthelpedthatoneofthecommissionmemberswasanAnglo

executive,perfectlysituatedtoadvocatethecompany’sposition.40Withinfiveyears,

blacktradeunionmembershipgrewfrom70,150to300,000by1983.41

Supportingblacktradeunionsalsohelpedbusinessunderminewhiteorganized

labor.Astheeconomygrewinthe1960s,thecolorbar,whichreservedskilledpositions

forwhitesworkers,begantohurtbusiness.Thisconstraintbecamemorecostlyas

industryexpanded,increasingthedemandforskilledworkers.42Recognizingblack

tradeunionsandremovingApartheid’sprotectionswouldhelpbringdownthecostof

whitelabor.43

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Businessleadershadlittledoubtthatunionswouldleadtohigherblackwages

andamorepoliticizedworkforce.44Ontheindustrialfront,asOppenheimerputit,

apartheidkeptwageslowbutmadelaborchronicallyunproductive.45Politically,with

everyotheravenueofpoliticaloppositionclosedoff,itwasobviousthatblacktrade

unionswouldbecomethemagnetsforpoliticalorganizing.CyrilRamaphosa,aleading

ANCpoliticalactivist,ledtheNationalUnionofMineworkers(NUM)formedin1982

andhelpedcreatetheCongressofSouthAfricanTradeUnions(COSATU)threeyears

later.ItsoonbecameweldedintotheANCastheindustrialarmoftheliberation

struggle.46IndustrialistswhohadopposedthelegalizationcametoblameAngloandthe

otherswhohadlobbiedforitoncewavesofmassivestrikesbeganyieldinglargewage

increasesinthelate1980s,butbothatthetimeandinretrospectitsleadersthought

theyhadlittlechoice.47AsWoodemphasizes,bythemid1980sthelaborinsurgency

hadeffectivelydestroyedtheeconomicandpoliticalstatusquoasacontinuingoption.48

Butthisdidnotmeantherewouldbeapeacefultransitiontodemocracy.

Fromthemid-1980s,foreigngovernmentsandbusinessescutmanyeconomic

tieswithSouthAfrica,bolsteringbusinessmotivationtochangethestatusquo.In1985,

internationalbanksbeganrefusingtorollovershort-termdebtwiththeresultthat,

overthenextyear,thecountrywouldhavetopayonebillionUSdollarsinloans.

Inflationroseto16percent,thecurrencytumbledandthegovernmentintroduced

exchangecontrols.By1986,over100multinationalshaddisinvestedfromSouth

Africa.49ThiscreatedsomeopportunitiesforSouthAfricanfirmstodiversifybypicking

uptheirassets,butgrowingisolationina“hothouseeconomy”leftthemfallingbehind

internationalcompetitors.50

Businessleadersalsomadeconnectionswiththeliberationmovementasa

byproductofeffortstoeffortsbybankersandstockbrokerstoattractforeigncapital.

Wheninternationalboycottsbeganrampingupinthe1970s,stockbrokersand

investmentfirmsbegantryingtocountertheireffectsbyinvitingforeigninvestorsto

thecountrytopersuadethemthatSouthAfricahadafuture.Theyorganizeddozensof

tripsinwhichpotentialinvestorstouredminesandfactories,wereintroducedto

governmentofficials,andparticipatedinconferences.Theyalsometwithleadersofthe

liberationmovement,despiteoppositionfromthegovernmentwhoforbadeministers

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fromattendingifanyonefromtheUnitedDemocraticFront(UDF,thelegalfront

organizationfortheillegalANC)waspresent.51

Theinvestmenttripsfailedtogenerateinvestmentorevenstemcapital

outflows,52buttheorganizersdevelopedvaluableconnectionswithANCleaders.Thisis

howSidneyFrankel,ChairmanofJohannesburg’slargeststockbrokers,gottoknow

CyrilRamaphosa,whomhelaterconnectedwithRoelfMeyeratafamousbonding

weekendoverfishingaccidentatFrankel’sfarm.5354Theimportanceofthissingleevent

isdebatable,butitunderscorestherealitythatbusinessleadersdevelopedpersonalties

withANCleadersthatpoliticianslacked,tiesthatbecameimportantlaterwhenthe

governmentfinallywantedtotalkbutdidnotknowwhomtotalkto,andwhenthey

foundthedistancesweretoogreatandneededintermediariestobuildbridgesandfix

themwhentheycollapsed.55

BusinessoverturestotheANCleadershipservedanadditionalpurpose,

connectedtothecollapseofSovietbloccommunism.TheCommunistPartyofSouth

Africa(formedin1921)haddissolveditselfinanticipationofbeingbannedbythe

ascendantapartheidgovernmentin1948andthenreemergedwithintheANCinthe

early1950s.PartofthereasonthatwhiteSouthAfricanbusinesselitessawnoreasonto

challengethegovernmentthroughthe1960sand’70swasthewell-knownSACP

influencewithintheANCleadership.Indeed,Rellyclaimedafterthe1985Zambiatrip

thathissolepurposehadbeen“todevelopajudgmentabouttheimportanceofthis

crummyMarxism,whichtheypurportedtoadvocate.”56

ButthepoliticalterrainchangedasSoviettheempirebegancomingapart.For

onething,theUSSRstoppedfunding,training,andequippingMKintheearly1980s,as

theSovietswentbrokefromthetwincostsoftheAfghanwarandtheStarWars-

inducedarmsracewiththeReaganAdministration.ThisforcedANCleadersseriously

toconsiderreturningtonegotiations,recognizingthatWesternpowersmightpushto

resolvetheSouthAfricaproblemwithoutthem.Therewasanotherimplicationfor

whitebusinesselites.Oncecommunismceasedtobeaseriousthreattheunthinkable

specterofanANCgovernmentstartedtobecomethinkable.Asthethreatof

internationalcommunismfaded,proponentsofapartheidlostakeymotivationtoresist

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democracy.57Asonebusinessmanputit,“Iwokeuponemorningandrealized:wedon’t

havetohaveCuba;wecanhaveBrazil!”58

ThelossofSovietsupportalsomeantthattheANCwouldhavegreatdifficulty

sustainingitsarmedstruggle.MKhadmountedseveralbombattacksintheyears

followingRelly’sLusakatrip.59Somebusinessmenhadrefusedtoparticipateintalks

withtheANCbecauseofitsuseofviolence.ThecountrybecametenserasthePresident

declaredasecondstateofemergency,empoweringpoliceyetagaintodetainpeople

withouttrial.ButevenbeforetheUSSRbeganwindingdownmilitarysupport,some

businessmenwhometwiththeANCacceptedtheirargumentthatgovernmentviolence

wasworse.“ThereweremorepeoplekilledbytheagentsofthisAfricangovernment

thandiedasaresultoftheactivitiesoftheANC,”saidChrisBall,theCEOofBarclays–

thecountry’slargestcommercialbank.“Andtheviolentactivitieswereneveraimed

directlyatcivilians.”60

IfthefaultlineswereshiftingformainlyEnglish-speakingbigbusinesselitesby

themid1980s,thingsweredifferentforpredominantlyAfrikanerNPpoliticiansand

theirrankandfilesupporters.Manyofthemremaineddeeplyinvestedintheir

politicallychargedidentityasanethnicallypurechosenpeople,forwhomracial

compromisewasimpossible.Tobesure,therewerereformistAfrikanersintheNPand

instalwartinstitutionsliketheDutchReformedChurch.61SomeAfrikanerbusiness

groupseventooktheLusakatrek,althoughtwoAfrikanerbusinessmendroppedoutof

the1985RellytripwhenBothapubliclyopposedit.62ButmanyAfrikanerswhosawthe

needforchangeoptedfor“strategiesthatplayedintothereformistpossibilitiesoffered

bythesystem.”63“Enlightened”verligtesbattledconservativeverkramptesforthesoul

oftheNP.Butthishappenedgraduallyandsubtlywithinthecommunity,notthrough

opencondemnationoftheparty’sleadership.

InaparallelprocesstotheLusakameetings,verligteAfrikanersbegan

establishingtieswiththeANCatthebehestofthestate’sintelligenceservices.The

projectwasthebrainchildofMichaelYoung,pressdirectorfortheBritishmininghouse

ConsolidatedGoldfields.YoungmetANCleadersalongwithrepresentativesoftop

companiessuchasBarclaysandminingcompanyRioTintoin1986.64YoungaskedANC

leaderOliverTambohowhecouldhelpandTamborespondedbyaskinghimtobroker

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meetingswithAfrikanersconnectedtothegovernment.6566Young’smoreconservative

boss,whofavoredtheIFP,explainedhisdecisiontookaytheprocess:“Apartheidwasa

formofgovernmentwhichcouldn’tlast.Itwasn’tamatterofrightorwrong.Whatever

theidealistsbelieved,itwaslikesocialism:itdidn’twork.”

Eightthree-daysecretmeetingswereheldoverthreeyears,atthecostof

betweenhalfamillionandamillionpoundstothecompany.67Thesemeetingswere

vitalforbuildingconfidencebetweenANCandAfrikanerpoliticalleaders,aswellas

identifyingareasforfuturenegotiations.Themeetingsalsofacilitatedcontactbetween

ANCleadersandheadoftheSouthAfricanintelligenceagenciesthroughoneofthe

participants,WillieEsterhuyse.68AsEsterhuyse,notes,itbecameobviousthatthe

governmentwouldhavetotalkdirectlytotheANC;everythingelsewasasideshow.But

“leadersanddecision-makershavetobehelpedtoembarkona‘loveaffair’withtrust

andconfidence.”69Businessprovidedthathelp.

III:TheConsultativeBusinessMovement

TheLusakatripledtothecreationoftheCBM.Afewseniorbusinessmenwho

manageditsaffairsweretheactivistcore.Theday-to-dayworkinvolvedestablishing

tiesbetweenthebusinesscommunityandrepresentativesofthemassdemocratic

movement.Buildingontheserelationships,theCBMmadethreenotablecontributions

toSouthAfrica’stransition.First,itcombinedforceswithreligiousleaderstomobilize

civilsocietygroupsforpeaceamidsttheviolenceoftheearly1990swhenpolitical

actorswereunabletofindcommoncause.Second,itprovidedinstitutionalsupport

duringthenegotiationstoendapartheid,usingthisroletokeeptalksontrackand

facilitatetracktwonegotiationswhentheycollapsed.Third,ithelpedmanagepolitical

spoilersdaysbeforetheelectionsin1994,smoothingatensionthathadthepotentialto

derailthetransition.

AlthoughtheCBMbecameasizeableorganization,itneverclaimedtorepresent

theentirebusinessspectrum.TheCBMexistedalongsideotherbusinessorganizations

suchastheUrbanFoundation,establishedin1976byHarryOppenheimerand

AfrikanerbusinessmogulAntonRuperttoadvocatereformstoimprovethesocial

conditionsofblacksinurbanareas.70TheUrbanFoundationcontributedtopolicy

debatesbutwaslessactivistthantheCBM.Moreover,theFoundation’smoderate

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positionearnedtheopprobriumofgroupstoitsleftandright.Blackactivistssawitas

supportingapartheidandthegovernmentvieweditastoocritical.71Otherbusiness

groupsincludedchambersofcommerceandemployerrepresentativegroups.These

groupstookstancesonpolicyissues,suchaslaborlegislationorrestrictionsonthe

internalmovementofblackpeople,buttheirmandatewasmorenarrowlyfocusedon

businessconcerns.Moreactivistbusinessleadersfeltthattheprimaryconcernof

conventionalbusinessgroupswas“nottoantagonizegovernment”.72

FormationoftheCBM

Thepaceofengagingwithanti-apartheidactivistsslowedaftertheLusakatrip.

Onenewspaperattributedtheapparentdeclineofbusinessoppositiontoapartheidtoa

governmentinvestigationdesignedtointimidatebankerChrisBalloveraloanthathad

fundedadvertisingonbehalfoftheANC.Bothaorderedtheinquiryhimselfand

appointedaSupremeCourtjusticetoconductitaftermaking“veiledinnuendosabout

[Ball]inparliament.”73ThejudgefoundnoevidencethatBallknewthattheloanwould

fundproANCadvertising,butjudgedhimguiltyanyway,promptinganoutcryfromthe

legalfraternity.FormerjudgeturnedbusinessmanMervynKingorganizedapaid

newspapernoticesignedbysome40chiefexecutivessupportingBall,suggestingthat

thatthecampaigntointimidatebusinesshadlimitedimpact.74

BusinessleaderscontinuedsecretmeetingswiththeANC.Theyapproached

businessconsultantChristoNeltoaskhimtocontact“legitimatebroad-basedblack

leadership”ontheirbehalf.75BallhadpreviouslyhiredNeltotransformattitudes

towardracewithinthebank.NelwasalsopartofamostlyAfrikanerdelegationthat

visitedtheANCin1987.TwojournalistswhohadexcellentcontactshelpedNelsetup

meetingsbetweenbusinessleadersandthetopbrassoftheanti-apartheidmovement,

includingUDFheadAlbertinaSisulu.Thebusinessmenfacedlessdangerthantheir

activistpartners,manyofwhomwereinhiding.Butsomebusinessmenwereharassed

fortakingpartinthetalks.76

EighteenmonthsoffurtiveinvolvementledtothecreationoftheCBMinAugust

of1988.Some80leadersofbusinessandpro-democraticgroups,mostlyfromtheUDF

andtradeunions,metfortwodaysinBroederstroom,thetrainingsiteofamining

companyroughlyanhour’sdrivefromJohannesburg.Athoroughaccountofthe

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meetingproducedbytheCBMpaintsaportraitofatenseandattimesuncomfortable

encounterthatsucceededbecausekeyindividualsweredeterminedtofindcommon

groundandmovetheprocessforward.77

Thebusinessmenagreedtoformanorganizationinresponsetopressurefrom

theliberationmovementactivists,arecurringdemandthattheymadeagainatthe

encounter.“Justrememberthatvisionsandstatementsmakepeopleenthusiastic,”Nel

recallsUDFleaderAzharCachaliatellinghim,“Structuresmovethem.Wecannotafford

toonlymeetwithindividualsbecausewhentheindividualsgo,nothingstaysbehind.”78

ButthebusinessleadersatBroederstroomwerenotofonemind.Theystruggledto

agreeonacommonsetofprinciples,andafewrefusedtosupportanynameusingthe

word“democracy.”Eventuallytheyarrivedatanameandsetofmutuallyacceptable

goalsandprinciples.Theseincludedacommitmenttoanon-racialdemocracyandto

continuingconsultationwithallinterestgroupsanddemocraticmovements.79

TheCBMstaffeditssecretariatwithpeoplefrom“liberalandstudentactivists

circles,”whichgaveitcredibilitywithblackleadersandencouragedtheorganizationto

“venturewherethemorematurebusinessleaderswouldhavehesitated.”80This

includedpeoplelikeChristoNel,whowasthefirstteamleader,andTheunsEloff,CEOof

theorganizationfrom1990.LikeNel,EloffvisitedtheANCinDakar.Hereturnedhome

toatorrentofcriticismfromfellowAfrikanersandresignedasaDutchReformed

Churchminister.Eloff’ssocialostracismandprincipledstanceonapartheidearnedhim

therespectofmanyactivists.AnotherANCstudentactivist,ColinColeman,whowould

laterbecomeheadofGoldmanSachsforsub-SaharanAfrica,washiredbytheCBMin

1989.81Nel,EloffandColemanreportedtoasmallteamofseniorbusinessleaders.They

couldactwithoutconsultingthebroadermembership.Asaresult,theorganization

earnedareputationforbeingmorefleetoffootthanotherbusinessassociationsand

federations.82

Byearly1989,theCBMhadattractedover100businessestoitsranks.Itsfirst

memberswereEnglishspeakingbut,onceafewprominentAfrikanersjoinedthe

organization,moresignedup.TheCBMsetupregionalofficesandorganizedmeetings

aroundthecountrywithrepresentativesofpoliticalpartiesacrossthepolitical

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spectrum,fromtheAfrikanerhardrighttoblacknationalists.83TheCBMalsoheld

meetingswiththeUDFinthecountryandANCleadersabroad.84

TheNationalPeaceAccord

Threeandahalfthousandpeoplediedinpoliticalviolencein1990,theyear

Mandelaleftprison.85Thousandsmorediedoverthenextfewyears,primarilyinthe

areasthattodaycomprisetheKwaZuluNatalandGautengprovinces.Muchofthe

conflicttookplacebetweenANCandIFPsupporters,withthestateplayingtheroleofa

“thirdforce”behindthescenestosowdiscordamongblacks.86Repeatedeffortsto

brokersettlementsnationallyandlocallyfailedintheabsenceofthird-party

enforcementcombinedwiththeactionsofstatesecurityactorsworkingtofoment

instability.87TheCBMwasvitalinensuringthatthispoliticalviolencedidnotscuttlethe

negotiationstoendapartheid.

InApril1990,ANCleadersthreatenedtowithdrawfromtalksabouttalksonthe

newconstitutionifPresidentdeKlerkfailedtomeetaseven-pointultimatum,which

includedstepstheybelievedwouldhelpquelltheviolence.88DeKlerkrespondedby

callinganationalpeaceconferencethefollowingmonththatdrewsome200delegates

fromacrossthepoliticalspectrum.Butitremainedasideshow.Convincedof

governmentcomplicityintheongoingviolence,theANCanditssupportersboycotted

themeeting,NewspapersreportedthatMandelawouldbewillingtoattenda

conferenceonlyifneutralpartiesorganizedit.89

TheCBM’sColinColemanandFrankChikane,headoftheSouthAfricanCouncil

ofChurches(SACC),leaptintothebreachtosecurebuy-inforasecondconferencein

thedaysbeforedeKlerk’ssummit.Bothbusinessandthechurcheshadmootedtheidea

ofapeaceprocesswithkeystakeholdersbefore,signalingtheiravailabilitytofacilitate

suchadialogue.ButtheIFPvetoedtheSACCasthesolefacilitatorsofanyprocess.They

considereditpartoftheproblemgivenitstiestotheANC.90Afacilitatingcommittee

waseventuallysetupbybothbusinessandchurchgroups,andthesecondconference

wentaheadinJuneyieldinganationalpeaceaccordandnational,regional,andlocal

peacecommitteesthreemonthslater.9192BarlowRandexecutivedirectorandDeKlerk

confidantJohnHallchairedthenationalcommittee.93

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Businesscontributedfinanciallytothepeaceprocessandbysharingdispute

resolutionexperiencefromothercontexts.94JohnHalldrewonpersonaleffortstocalm

unrestinthesmalltownofMiddelberg,wheremanagersofaBarlowsubsidiaryhad

heldtheirownpeaceforumtheyearbefore.95Thisinitiativebroughttogethervarious

actors,rangingfromwhiteelectedofficialstoANC-aligned“comrades”inthetownships,

andledtoaseriesofprojectsthathelpedquelltheviolencethreateningthecompany’s

businessinthearea.96Moreover,businessmenlikeAndreLamprechtbroughtlessons

fromtherealmofindustrialrelations,motivatingtheinclusionofelementssuchas

internaldisputemechanisms.97

TheNationalPeaceAccorddidnothaltallpoliticalviolence,butpoliticianslater

acknowledgeditsimportanceinprovidingthemwithspacetoengageintalksabouta

politicaltransition.98TheAccordhadthefortuitousbyproductofbolsteringtheCBM’s

credibilityasnon-partisanandcommittedtopeacefulchange.99IndividualsintheCBM

secretariat,inparticular,gainedthetrustofpoliticalleadersonbothsides.Thiswould

beavitalresourceoncerealnegotiationsstarted.

MultipartyTalksonaNewConstitution

TheCBMplayedacriticalroleintheconstitutionaltalks.Thefirstround,called

theConventionforaDemocraticSouthAfrica(CODESA),beganinDecember1991atthe

JohannesburgWorldTradeCenter.Some400delegates,representing20different

groupsincludingthegovernmentparticipatedinthefirstsession.CODESAconsistedof

aseriesofworkinggroupsthatdeliberatedoverthenextfewmonths.TheCBM

providedsecretariatsupportalongwithcivilservantsfromthedepartmentof

constitutionaldevelopment,butitsmostimportantworkwasback-channelshuttle

diplomacyamongpoliticalleaderswhentalksbrokedown.100“Itdidnothappenoften

butinthosetwoyears,firstwithCODESAandthenafterwardswithmultiparty

negotiatingprocess,weoftensawaclashcoming,”saidEloff,theCBM’schiefexecutive,

“Wewouldthenjustalertsomeofthebusinessleadersandtheywouldtrytousetheir

contactstosaycanwedosomething,canwehelp?”Businessleaderssometimes

approacheddiplomats,especiallyambassadors,tohelpintervenetoprevent

breakdowns.OthersrecallEloffasanastutemanagerofdifficultmeetingswhogained

credibilityfromhisreputationasanAfrikanervilifiedbytheestablishment.101

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WhentheCODESAtalksbrokedownfollowingamassacreinJune1992,theCBM

tackledsomeoftheintractableissues.102Thepowersofprovincialandlocal

governmentswereparticularlyfraught,especiallyfortheIFPandhomelandleaders

whowantedtoprotecttheirlocalbastions.“Butheleziwantedafullfederation,the

NationalPartywantedlessandtheANCdidn’twantanythingtodowithfederation,”

saidEloff.TheCBMinvitedinternationalexpertsandtechnicalexpertsfromthe

differentpartiestodraftareportondecentralizationandfiscalarrangementsina

federalsystem.Thewordingondecentralizationintheinterimconstitutioncame

straightoutoftheirreport.103

Inthethirdroundoftalks,whichbeganinApril1993,theCBMheadedthe

secretariatwithanexplicitmandatetohelpthepartiesresolvestickingpoints(Eloff

1999:332).BythentheCBM’ssecretariathadestablishedarapportwiththekey

playersandhadgainedthetrustnecessarytohelpnegotiatorsfindcommonground.

Oncetheinterimconstitutionwassigned,Eloffservedasthedeputyexecutivedirector

forthetransitionalstructuresetuptorunthecountryuntilelectionday.

BringingtheIFPintotheElections

TheCBMplayedakeyroleingettingtheIFPtoparticipateinthefounding

elections.Soonafterthemulti-partytalksresumedin1993,aprominentANCleader

ChrisHaniwasassassinated.Tostaveoffapopularupheaval,theANCandNPmadea

firmcommitmenttoholdelectionswithintheyear.TheIFPandwhiterighthadwalked

outofthenegotiations.Colemanrecallsthatexcludingthesegroupsfromtheelections

represented“animmensedangertothecountry…andtheunityofthecountryafterthe

election.”ButtheIFPwantedthedateoftheelectiontobesubjecttodebate,hopingto

pushitfurtherintothefuture.TheANCandNPrefused.Colemanwascentralin

bringingininternationalmediators,ledbyBritishForeignSecretaryLordCarrington

andformerUSSecretaryofStateHenryKissingertowhosoughttoresolvethisissuea

monthbeforetheelections.Theeffortfailedandthemediatorsleft.Colemanrecalls

thinking,“Wehadthepotentialforincredibleviolencetooccurwith,effectively,ten

daysleftbeforeApril27,1994.”104

OnemediatorwhoknewButheleziwell,KenyanprofessorWashingtonOkumu,

stayedbehind.OkumupersuadedButhelezitoparticipateintheelection.105

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Immediately,ColemanbroughtCBMheavyweightsonboardandflewaroundthe

countryonanAngloAmericanjettoworkoutanagreementthatwouldensuretheIFP’s

participation.“Weliterallyhadhours,notdays,todealwiththis.”StickerswiththeIFP

nameandlogowereprintedintheUK,flowntoSouthAfrica,stuckatthebottomofthe

ballotandflownaroundthecountry.TheIFPparticipatedintheelectionsandbecame

partofthenewdemocraticgovernmentafter1994.

IV:ExternalandInternalChallenges

Tobeaseffectiveastheywere,businessleadershadtowincredibilitywiththe

ANC.ThepersonaltrustrelationshipsthattheybuiltupthroughtheLusakatreks,peace

committees,andtheongoingCBMactivitiescouldonlytakethemsofar.Business

leadersalsohadtobeconvincingthattheywerecommittedtorealchange.Unlikethe

GroupofSevenbusinessorganizationsinNorthernIreland,whichproclaimed

neutralitythecontendingcamps,theCBMstakeditsfutureonregimechange.106The

advantagesapartheidhadgivenwhitebusinesstookthepossibilityofneutralityoffthe

table.Whatevertheirgripesaboutitscostsandinefficiencies,SouthAfricanbusiness

hadmadebillionsinprofitsbysustainingoneofthemostracistandunequalcountries

onearth(SouthAfricahadandhasoneofthehighestGinicoefficientsintheworld).

MandelacalledAngloAmericanoutonitsreluctanceseriouslytochallengethesystem

in1953,insistingthatitslimpsupportforchangewasacynicalefforttodivertthe

liberationmovement“withfinewordsandpromisesanddivideitbygivingconcessions

andbribestoaprivilegedminority.”107Businessleadershadtobecomecredibleas

activelycommittedtochange,anddemonstratethattheyhadboththewillandthe

capacitytotakeonthepowerfulforcesthatwouldresistthem.Theirhonestbrokerrole

before,during,andafterCODESAwasvital,butithadtobereconciledwiththefactthat

theywerealsomanifeststakeholders.

Therewasnooneelsetoplaythisrole.TheKissinger-Carringtonfailure

reflectedtherealitythatunlesstheingredientsofasettlementareclosetohandamong

theprotagonists,outsiderslackleveragetoimposeit.Churchgroups,whichhave

mediatedinothersettings,mirroredthedivisionsthatthenegotiationshadto

overcome.TheSouthAfricanCouncilofChurcheswasalliedwiththeANC,creating

difficultieswiththeIFPaswesaw.TheDutchReformedChurchembodiedtheevolving

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tensionsanddivisionsamongAfrikaners.Aftermuchtortureddebateitsleadership

declaredapartheidasinin1989,butthedecisionprovokedmajorconflictandturmoil

withintheirranksandtheystillrefusedtoendorseoppositiontoapartheid.108109Inthis

SouthAfrica’swhitechurcheswerelikechurchesintheAmericanCivilWar,where

everydenominationsplitintopro-unionistandpro-secessionistcongregations.110

EsterhuyseobservesthatwhileSouthAfricanchurchleaderslikeArchbishopTutu,

AllanBoesak,ImamSolomans,andNazeemMohamedbecomeoutspokenonblack

socioeconomicrightsby1988,theAfrikanerwhitechurcheswere“lightyears”behind

them.Thisconvincedhimthat“withintheAfrikanercommunity,allhopehadtobe

pinnedonbusinessleaders.”111

Thestandardaccountofbusiness’simpactondemocratizationturnsonthreatof

exit.Whenexitcostsarehighforeconomicelites,usuallybecausetheirassetswouldbe

trapped,weexpectthemtoresistdemocratization.Especiallyinahighlyunequal

country,therichhavenointerestingivingthevotetopeoplewhowilltaxawaytheir

wealth.112Thisonlystartschangingascapitalmobilityincreasesandthethreatofexit

canforestallredistributivetaxation.Atthatpointtherichbeginlosingtheirinterestin

resistingdemocracy.113Thisiswhylandedaristocraciesopposedemocracywhereas

industrialcapitalistsdonot,andwhyrichcountriesfailtodemocratizewhentheyare

heavilydependentonspecificassetslikeoil,mining,oragriculture.114

InSouthAfrica,however,althoughthebigconglomerateswerequitediversified

aswediscussbelow,theywereheavilyinvestedinassetspecificindustries,notably

mining.Businesselitesstoodtolosesubstantiallyfromempoweringlabor,asindeed

happenedthroughthelegalizationofunions–whichtheynonethelesssupportedaswe

saw.Auniversalfranchisewouldpresumablyhavecomparableeffects.Capitalmobility

wasfurtherconstrainedbystrictcapitalcontrols,115andbythehighpersonalexitcosts

forindividuals.Unlikemostcolonialelites,theirfamilieshadoftenbeeninSouthAfrica

formanygenerations.Emigrationdidoutstripimmigrationforthefirsttimein1977,116

butthosewholeftweremainlypeoplewithpersonalnetworksabroad.117Bythemid

1980s,thosewhowerestilltherehadplentytolosebyleaving.Conventionalwisdom

wouldthereforepredictthattheywouldsupportthegovernment.Yetsignificant

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playersthrewtheirweight,earlyanddecisively,onthesideofchangeaswehaveseen.

Thiswasessentialtotheircredibility,butwhydidtheydoit?

Theanswerliespartlyinwhiteelites’realizationthatthestatusquowasa

wastingasset.Hirschman(1970)tellsusthatwhenexitiscostlyvoicebecomes

correspondinglymoreimportant.118Theconventionalaccountmightberightthatthose

forwhomexitwasexpensivewouldresistdemocratizationiftheycould.Butifthey

couldnot,thenthenextbestthingistheTocquevilliansolution:getbehindthe

inevitablesothatyouarebetterpositionedtoshapeitscourse.119Thishelpsexplain

whySouthAfricanbusinessleadersinvestedsomucheffortinreshapingANC

perceptionsofwhatwashappeningtotheworldeconomy,whatSouthAfrica’splacein

itwouldandcouldbe,andwhytheyshouldabandontheirsocialisteconomicagenda.It

wouldtakeworktoensurethatBrazilratherthanCubabecamethemodel,workthat

whitebusinesselitesrealizedtheyhadtoundertake.

ThemeetingsbetweenwhitebusinesselitesandtheANCabouteconomicswere

notformalnegotiations,buttheymirroredthepoliticaltalksinonerespect.Negotiated

transitionstodemocracycanoccurwhenneithersideisstrongenoughtoimposean

outcomeunilaterally,butthereisapotentialcoalitionbetweengovernmentreformers

andoppositionmoderatesiftheycanescapetheirprisoners’dilemmaandreachan

agreement;convince,coopt,ormarginalizepotentialspoilersontheirrespectiveflanks

toacceptit;andbuildenoughcivilsocietysupportforthenewdispensationtomakeit

stick.120Analogously,neitherwhitebusinessnortheANCwereinapositiontoimpose

theireconomicvisionsonthecountry.121

Hencetheeconomicparallel.Thechallengewasforcentristsonbothsidesto

buildenoughtrusttofindamutuallyacceptableeconomicunderstanding;convince,

coopt,ormarginalizepotentialspoilersonbothsides;andbuildsufficientpublic

supportfortheneweconomicordertomakeitsustainable.InthewordsofUDFactivist

CasCoovadia:“Whilewerecognizethatbyandlargebusinessissupportiveofapartheid

andtheybenefittedfromapartheid,wealsorecognizethatbusinessisacriticalplayer

andwillbeacriticalplayerpostapartheid,andthattherearepocketsofbusinesswe

canworkwithwhocanbehighlyinfluentialinthecurrentgovernment.”122Inshort,the

businessmeetingswiththeANCandthepeacecommitteeswerejustasvitaltothe

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outcomeastheirdiplomatic-cumpoliticalroleassecretariatofCODESAand

backchanneldiscussionsafterCODESAcollapsed.

Thebusinessleaderswhowantedtonegotiatebelievedtherewerepragmatic

leaderstoworkwithintheANC.“TheleadershipoftheANCwouldbemoreinterested

inaviableandvibrantSouthAfricaneconomythantheywouldbeintheMarxianform

ofeconomy,”GavinRellydeclaredafterhisLusakatrip.“Theywerepeoplewhocanbe

talkedtoandIamnotsorigidaboutmyownpointofviewthatIamnotcapableof

beingtalkedtoeither.”123124WorkingwiththeANCdidnotmeanadoptingitsviews.

“Therewerestillveryconservativeevenreactionarypeopleinbusinessaswellas

peopleontheothersideofthespectrum,”remarkedSpicer,whoparticipatedinthe

CBMonbehalfofAnglo.“Whattheywerealllookingforwasapragmaticwaytohave

changethatallowedthemtogetonwiththebusinessofdoingbusiness.”125Business

alsowantedadiscussionofthepost-apartheideconomybuttheANCwasnotprepared

totacklethattopicyet.

Thingschangedintheearly1990s,whentheANCbeganconfrontingpost-

communistglobalrealities.Thenengagementwithbusinessoneconomicpolicybecame

possible.SomeofthetalksinvolvedCBMleaders.Otherswerewiththeinternational

businesscommunity,suchasthethreeSouthAfrica-focusedforumsorganizedbythe

WorldEconomicForum(WEF)inSwitzerlandintheearly1990s.Mandelatoldhis

biographerthathebacktrackedonhiscommitmenttonationalizationafterhearingloud

andclearthatthiswouldforestallinternationalinvestmentinSouthAfricainapost-

apartheidworld.126

Theeconomicdiscussionsfedintothepoliticaldynamic.AngloAmerican

executiveBobbyGodsellwasoneofaseveralbusinessleaderswhousedtheirextensive

laborrelationsexperienceinpoliticalnegotiations.Henotedthatthattheinclusive

decision-makingpracticesthatemergedinthisperiod“modeledforthegovernmentthe

possibilityofnegotiationsthatcouldleadtoanewandacceptablepoliticalorder,rather

thansimply'defeat’.”127Thiswasonemorewayinwhichbusinessleadersreshapedthe

terrainonwhichpoliticalleaderswouldnegotiate.

MostEnglish-speakingbusinessleaders,evenbigbusinessleaders,hadlong

beenalienatedfromthecentersofpoliticalpower.128HarryOppenheimernevermetor

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spokewithJohnVorsterinhisthirteenyearsasPrimeMinister.129Englishbusiness

leaderswerealsowaryofNPeconomicpolicy,withitsstrongcommitmenttoand

burgeoningparastatalspublicemploymentofAfrikaners.Itsinterventionistapproach

tothemarketteeteredontheedgeofnationalizationintheeyesofwhitebusiness,

cominguncomfortablyclosetoANC’sideologicalstance.Thisdifferenceineconomic

outlookreflectedthecontrastingculturalworldsofAfrikanerandEnglishspeaking

elites,whoattendeddifferenthighschoolsanduniversitiesandmovedinseparate

socialcircles.130Thereweresomeexceptions.Businesshadtheearoftradeand

industryministerDawiedeVilliersandyoungdeputyministerslikeRoelfMeyerand

LeonWessels,whowouldlaterbecomemajorplayers.131ButforthemostpartEnglish

businesselitesfoundpoliticalleadersinsulatedanduninformed.132

Asignificantaspectofwhiteelites’swillingnesstoembracedemocraticchange

concernscostsofrepressionthatarenotcapturedinpurelyeconomicmodels.Some

wereconvincedthatapartheidwasmorallyindefensible,andtheyfeltobligedtoget

helpridofit.Manyalsobeganchafingatitstollonthequalityoflife.Benhabiband

Przeworskisuggestthatthediminishingmarginalutilityofincomemakespeople

increasinglywillingtotradeitoffforotherthings,notablypoliticalfreedom.133

BenhabibandPrzeworskihaveinmindthewillingnesstotoleratesomelevelof

redistributivetaxationasthepriceforprotectingpropertyrightsandotherbourgeois

freedoms,butsustainingauthoritarianregimesthatrepressthepooralsocompromises

thosefreedoms.

AstheSouthAfricanconflictescalated,sodidthecostsofrepressionforwhite

elites.Compulsorymilitaryservicefortheirteenagesonswentfromninemonthstoa

yearin1972andthentwoyearsin1977,withmorefrequentandlengthycallbacks.134

After1976thisbeganmorphingintodistastefulanddangerouscrowdcontrolinthe

townships,nottomentionfightingrealwarsinNamibiaandAngola.Statesof

emergencymeanttheerosionofcivicfreedoms,fearofthesecuritypolice,andever-

moreintrusivecensorship.Sanctionsandinternationalpariahstatusmadetravel

irksome.Minorbycomparisonwiththerepressionbeingexperiencedbyblacks,these

costsofrepressionwerenonethelessincreasingwithnoendinsight.Thedesiretobe

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ridofthempressedinthesamedirectionastheimperativetoshapeunstoppable

change.

Butthegovernmentwasboundtoresistbecausewhiteswhowerenotin

business,mostlyAfrikaners,wereamajorNPconstituency.Manyofthemfaced,and

presented,challengesthatarenotcapturedintheeconomicmodels.Tobesure,someof

whatAfrikanershadatstakewaseconomic.Farmershadland.Governmentworkers

hadjobs.Thosethingscanbemanagedtosomeextent–astheyeventuallywere–by

constitutionalguaranteesandprotectionofcivilserviceemployment.Butidentity

politicsareanothermatterbecauseitinvolvesindivisiblegoods.

Unlikedivisiblegoods,whichfacilitatepluralistpoliticsandcompromise,

indivisiblegoodsproducewinnertakeallpolitics.135Apartheid’sstalwartssaw

themselvesasaraciallypurechosenpeople,committedtoexclusivecitizenshipinan

ethnicstate.Yetanegotiatedpartitionwasnotaviableoption.Theapartheideconomy

dependedonmigrantlaborfromBantustansthatwerenotthemselveseconomically

viable.Asaresult,therewasnoremotelyequitablepartitiontowhichAfrikanerswould

agreevoluntarily.136Whitebusinesseliteswereboundtofacehardgovernment

oppositionwhentheybeganseriousoverturestotheANCthatthreatenedthislarge

partofitssupportbase.AnydoubtaboutthatwasscotchedintheMay1987general

election,inwhichtheNationalPartyincreaseditsoverwhelmingmajorityinParliament

to123outof166seatsandthebreakawayhardrightConservativeparty(whichhad

beenformedin1982toopposethegovernment’splanforaTricameralParliamentthat

wouldgivelimitedrightstoIndiansandColouredsinseparatechambers)won23seats,

replacingtheProgressiveFederalPartyastheofficialopposition.137

Apartheidrestedonprinciplesthatthatledtoapoliticsofindivisiblegoods,but

theANC’scommitmenttonon-racialismheldoutthepromiseofamoreinclusivefuture.

SouthAfricanshadseenIdiAminforceUgandanAsianstofleein1972,surrendering

thousandsofbusinessestootherUgandansandthestate.TheANC’sphilosophyofnon-

racialism,underscoredbyitscomparativelydiverseleadership(anironicconsequence

ofthemostlywhiteSACPleadershipwithintheANCelite),gavewhiteelitessome

reasontothinkthattheycouldworktogethertowardsacommonfuture–morelike

BrazilthanUganda.

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Bigbusinesswasalsofortuitouslystructuredtoresistgovernmentintimidation.

Theeconomywascomparativelydiversified,138butownershipwashighlyconcentrated

inthehandsofafewlargeconglomerates.In1988,fivebusinessgroupscontrolled

fourthfifthsoftheJohannesburgstockexchange,withtheAnglo-AmericanGroupand

DeBeersalmosthalf(45.3percent)ofthat.139OrganogramsofAnglo-Americaninthis

periodshowasprawlingempirewithownershipoffirmsinmining,media,textiles,

automobiles,banking,propertyandchemicalswithatotalof1,350subsidiaries.140141

SouthAfricaalsohadahighlydevelopedfinancialsector,comprisingthecontinent’s

largestbanksanditsonlymajorstockmarket.

Historically,Afrikanershadlivedontheperipheryoftheindustrialand

commercialeconomies.TheNPpoliticalleadershipcamefromtraditionalAfrikaner

circles.Oncomingtopowerin1948,theNPtriedtochangethat,bypromoting

corporationsownedbyAfrikaners–particularlyinthefinancialsector.142But

Afrikanersworkedmainlyinfarming,smallbusiness,themilitary,thepolice,andcivil

service,andmostNPleadershadlittlebusinessexperience.Thismadethemrelative

price-takerswithrespecttobigbusiness.Thegovernmentwasnotinapositionto

intimidateSouthAfricanbusinessleadersasHitlerhaddonewithGermanbusiness.

HadtheyhadtriedtoseizeAnglo,theywouldnothaveknownwheretostart.Nodoubt

thisisagoodpartofthereasonthat,thoughtheycomplainedabouttheLusakaand

treksandenforcedprohibitionsagainstothergroupsthatmetopenlywiththeANC,

theyleftbusinessalone.143

Thesmallnumberoflargeplayersalsohelpedbusinesssolvewhatwould

otherwisehavebeensubstantialcollectiveactionchallengesinitsownranks.Thekey

playerswhomovedforwardwiththeinformalmeetingsthatbecamethecoreofthe

CBM[ChrisBall(CEOofBarclaysBank),NealChapman(CEOandChairmanofSouthern

Life),MikeSander(CEOofAECI),ChrisWyk(CEOofTrustBank),ZachdeBeer

(DirectoratAngloAmerican),MervynKing(Chairman,Tradegro),WillemvanWyk(MD

ofIscor)andAntonMostert(ex-judgeadvocate)]144constitutedwhatRussellHardin

referstoasaKgroup,whereKisthesizeofanysubgroupthatstandstobenefitfrom

providingacollectivegoodregardlessofwhethertheotherscontribute.145

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InthiscasethemajorbusinessplayerswereaKgroupinthreesenses.In

Hardin’seconomicsensetheyinternalizedthecostsoffurnishingthecollectivegood:

theyfundedmeetings,thecostsofservingasCODESA’ssecretariat,theirsubsequent

shuttlediplomacy,andhelpedfundinfrastructureforthefirsttheelection.The

presenceofaKgroupalsomeantthattheycouldlimitdecision-makingcostswithinthe

CBMbymovingdecisivelywhenscoresofplayerswhomightdisagreeabouttacticsor

strategymighthaveledtoparalysis.146OncetheCBMwasestablished,thesecretariat

ranthingsinclosecoordinationwithasmallgroupofseniorbusinessmen.147A1997

CBMmemonotedthatthisgroupwasa“soundingboard”and“quickdecision-making

mechanism”thatwas“verynecessary,especiallygiventhehighdegreeoffluidityof

circumstancesatthetime,”148InthissensetheCBMenjoyedtheadvantagesoffnot

beinghighlydeliberative.149150

Third,theywereakindofpoliticalKgroupinthattheygavecovertosmaller

playerswhomightotherwisehavebeenintimidatedbythegovernment.Ball,who

approachedexecutivesfromsmallerfirmstomeetwithanti-apartheidgroups,

estimatedthattwo-thirdsofthemrefused.Butwhenaskedwhetherhepersonally

feareddetention,heexplainedthathewastoovisibletohavetoworry.“Toputinjail

theheadofthelargestbankinthecountrywhohadnotbrokenthelawwouldhave

beenquiteproblematicforhim[Botha].”151GavinRelly’s1985Zambiagambitwas

comparable.ANCNECmemberPalloJordan,whowasthere,notedthatbymeetingthe

ANCleadershipinexile,Relly“createdthepossibilityforotherorganizedbodies,

politicalandincivilsocietyinSouthAfrica,tomeetanddiscusswiththeANCwithout

fearofprosecution…Thefloodgates,inaway,wereopenforanyonewhowas

interestedenoughtocomeandmeettheterroristsbecauseGavinRellymetthem.He

wasn’tprosecutedsowhycan’tsomeoneelsecomeandnotbeprosecuted?”152

V:ComparativeConsiderations

Onereasontherehasbeensolittleattentiontotheplaceofbusinessin

democratictransitionsconcernsskepticismofthewholeenterprisethathas,somewhat

disparagingly,becomeknownastransitology.Allpathstodemocracydependon

contingencies.Negotiatedtransitionsinparticularexhibitathread-the-needlequality;

manyfactorshavetolineupfavorablyattherightmoments,andtherearealwaysmore

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waysforthemtofailthantosucceed.Andexogenousfactorscanbedecisive,aswehave

seenhere.Withoutthecollapseofcommunisminthelate1980s,therequisite

realigningofinterestsandmotivationswouldnothaveoccurredamongthewhite

establishmentortheANC.Staterepression,supportedbypowerfuleconomicelites,

wouldarguablyhavebeenthelikelierresponsetothelaborinsurgenciesofthe1970s

andtheANCmighthavestuckwitharmedstruggle.Itisnotsurprisingthatscholarslike

Przeworskiet.alconcludethatthereislittlesystematictosayabouttransitions,and

thatthebetterfocusisonhowlikelydemocraciesaretosurvive–nomatterhowthey

comeabout.153

Weareskepticaloftheskepticism.Predictingtheoutcomeofnegotiated

transitionsisindeedamug’sgame.Aswellasexternalfactors,theydependonthe

availabilityofleaderswithunusualhumanskillsandthewillingnesstotakegreat

personalrisks.154Thisisalsoinherentlyunpredictable.Butotherthingsalsoaffectthe

likelihoodoftransitions.Junget.alnote,forinstance,thatthatitisvanishinglyunlikely

thatagovernmentwillnegotiateatransitionunlessitssupportersbelievethatthe

statusquoisunsustainable.155WhenJerryAdamsemergedasanIRAleaderwho

seemedtohavetherequisiteleadershipskillsin1983,therewasmuchspeculationover

thepossibilityofanegotiatedsettlement.ButbecauseMargaretThatcher’smajorityat

WestminsterdependedontheUnionistMPsinUlster,farfrombeingawastingassetthe

statusquowasindispensible.ThatwouldchangeonceLabourcametopowerin1997,

atwhichpointhavinganappropriateSinnFeinleaderdidmatter.Anagreementstill

couldnotbepredicted,butitisworthunderstandingwhyitbecamepossible.

Herewehaveseenthatactivebusinessinvolvementintransitionnegotiations

washugelyimportant,perhapsevenvital,totheirsuccess.Itishardtoseehowpolitical

leadersinSouthAfricawouldhavebeenabletobuildorsustainthenecessarytrustto

breakoutoftheirprisoners’dilemmaforlongenoughtostarttalks,sustaintheminthe

faceofspoilerswithotheragendas,orbuildenoughsupportfrombelowtoimplement

anagreement.Thisistosaynothingoftheimportanceofrecastingbusiness’sownrole

frombeinganimplicatedbeneficiaryofapartheidintoacredibleagentofprogressive

changewhosememberswerewillingtomakesubstantialsacrificestobuyindustrial

andpoliticalpeace.Withouttakingthenecessaryrisksonthatfront,byactively

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supportingeconomicchangeanddefying–ifnotconfronting–governmenthardliners

overpoliticalchange,CBMleaderswouldnothavebecomecrediblefacilitatorsof

negotiations.

Understandingtheroletheyplayedhelpsevaluatetheprospectsforsuccessof

comparableeffortselsewhere.Forinstance,inMayof2013,attheregionalWEF

meetinginJordan,IsraelitechbillionaireYossiVardiandPalestinianoilmagnateMunib

al-MasriunveiledBreakingtheImpasse(BTI),a“strictlynon-politicalandindependent”

groupofbusinessleadersdedicatedtosettlingtheIsrael-Palestinianconflict.156BTI

receivedstrongbackingfromWesternleadersandWEFPresidentClausSchwab,who

declaredatitslaunchthat“themajorityonbothsidesoftheIsraeli–Palestinianconflict

yearnforpeaceandprosperity,andtheBTIprovidesafocusforthisenergy.”157The

groupclaimssome300members,accountingforsome30percentoftheGDPofIsrael

andthePalestinianAuthority(PA).BTI“callsonpoliticalleaderstoattachthehighest

prioritytowardsachievingatwo-statesolution”thatwillendtheconflict.Thegroup

“takesituponitselftobacksuchanendeavorandtogarnerdomesticandinternational

supportforit.”158BTI’smostvisibleactivitytodatehasbeenadvertisingcampaigns

exhortingpoliticalleaderstonegotiateatwostatesolution.Therealsoappeartohave

beensomesecretmeetings,thoughitisunclearwhohasparticipated.159

Evaluatinganinitiativeinitsinfancyischallenging,buttheSouthAfrican

experiencesuggestsfewgroundsforconfidencethatBTIwillhelpresolvethe

Palestinian-Israeliconflict.Foronething,BTI’smainagendaappearstohavebeen

holdingmeetingsattheWEFandotherinternationalvenues,andforIsraeliand

PalestinianbusinessleadersseparatelytolobbytheIsraeligovernmentandthePA

leadershiptonegotiateanagreement–withoutBTImembersthemselvesgetting

involved.Itishardtoseewhatvaluetheseactivitiescanadd.SouthAfricanbusiness

madeadifferencebyengagingthedeadlockedgroupsonthegroundtoconvincethem

thattherewasaviablefuturethattheyhadhithertodismissed.Itisunclearwhether

anythinganalogousispossibleintheMiddleEast,orjusthowitwouldchangethe

politicalequation.Butbusinesscannothaveanimpactwithoutengagingthe

constituenciestowhichdeadlockedpoliticiansrespond.

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MostBTIactivityhasbeenontheIsraeliside,withPalestinianbusinesseselites

whosupporttheinitiativeconfrontingseriouslegitimacychallengesontheArab

street.160Tellingly,in2015theBTIwebsitecouldbereadonlyinHebrewandEnglish.

ThisreflectstherealitythatIsraelibusinessleadersdonotseethemselvesashaving

potentialPalestinianconstituencies.ArelateddifficultyconcernsBTI’sdeclarationof

neutrality.JustasbusinessneutralitywouldhavebeenineffectiveinSouthAfrica,

Israelibusiness,widelyseenbyArabsashavingbenefittedfromdecadesofoccupation,

cannotexpectPalestinianstoembracethemasneutral.AsonePalestinianmemberof

BTIputit,“Israelibusinessleaderslackthecouragetopushtowardpeace–nottowards

compromise.”161BTI’sunequivocalembraceofatwostatesolutioninanycasebeliedits

neutralityatatimewhengrowingnumbersofPalestiniansandtheirleaders,including

Fatahleaders,weredeclaringitunviableandcallinginsteadforabinationalstate.162

AseconddifficultyisthatnoneoftheBTIfoundingstatementsorpressreleases

envisagearolefor–orevencontactwith–Hamas.163ThismirroredthestanceofIsraeli

andWesternpoliticians,butitignoredrealityontheground.164TheSouthAfrican

analoguewouldhavebeenforbusinessleaderstoinsistondealingonlywiththeIFPon

thegroundsthattheANCwasaterroristorganization.InMiddleEast,thecostsof

refusingtodealwithHamaswerethrownintosharpreliefinAprilof2014,whenU.S.

SecretaryofStateKerry’ssponsorednegotiationsthatBTIhadbackedcollapsedandthe

PAleadershipandHamasannouncedtheformationofaunitygovernment.Atthatpoint

BTIactivistGadPropper(directorandformerCEOofOsemInvestments,oneofIsrael’s

largestfoodmanufacturers)concededthathedidnotopposenegotiatingwithHamas

because“peaceissomethingyoumakewithenemies.”ButheinsistedthatHamasmust

firstabandonterrorismandrecognizeIsrael.Otherwise,“there’snoroomfor

negotiations.”165

Propper’scommentsunderscorethegulfbetweenBTIthinkingandwhatwould

actuallyhavetohappentobreaktheimpasse.Ifin1985SouthAfricanbusinessleaders

hadconditionedtalkingtotheANC,likethegovernmentoftheday,onitssuspending

thearmedstruggleandrecognizingoftheNPgovernment,talkswouldneverhave

begun.Indeed,theANCneverrecognizedthegovernment’slegitimacy.WhentheANC

didsuspendthearmedstrugglethreemonthsafterthegovernment’sdecisiontorelease

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allpoliticalprisonersandlegalizeallpoliticalorganizations,theydidsounilaterally.

TheANCrejectedallNPdemandsforMKtodecommission,andneverpromisednotto

reinstatethearmedstruggle.Wisely,theCBMandthegovernmentcontinuedthetalks

withtheANCanyhowuntiltheyreachedasettlement.166

Preconditionsaretheenemyofsuccessfulnegotiations.Theyinvariablybecome

targetsforspoilerswhowantthetalkstofail.167Constituentsoftenboxpoliticiansinto

preconditionsanyhow,butbusinessleaders,whodonothavetorunforoffice,have

moreflexibilitytogowherepoliticianscannotorwillnotgo.Buttheymustbewillingto

taketherisksofthinking,andactingon,theunthinkable.SouthAfricanbusinessdidthis

inthe1980s.Tohaveanimpact,BTIleaderswouldhavetotakecomparablerisksinthe

MiddleEast.

Arelatedissueconcernswhathappenswhenthepoliticalconditionsdeteriorate.

AfterIsrael’sOperationProtectiveEdgeinthesummerof2014,whichleftsome2,300

Palestiniansand71Israelisdead,itbecamehardtodiscernmuchBTIactivity.This,too,

wasdiscouraginginlightofSouthAfricanexperience,wheresomeoftheCBM’smost

importantworkwasdonewhenthepoliticalsituationwasatitsbleakest.Itwas

PresidentBotha’s1985RubiconSpeech,signalingintransigentNPresistancetochange,

thatconvincedmanybusinessleaderstogetinvolvedinthefirstplace.Itwaswhen

CODESAfellapartthatCBMleadersengagedintracktwodiplomacyaimedat

resuscitatingtalks.ItwaswhentheIFPwasboycottingandtryingtoderailthe1994

electionsthatCBMshuttlediplomacywentintooverdrive.Runningads,asBTIwas

doinginmid2015,thatdeclare“Withoutanagreementwewillnotbeabletopreserve

theJewishDemocraticNatureofIsrael”and“WithoutanAgreementwewillnotbeable

toLowertheHighCostsofLiving”signalnosenseofurgencyorinterestinanypointof

viewotherthantheIsraelione.168

Thisdifferenceisnotsurprising.Israelibusinesshasnotbeendesperateenough

tointernalizetherelevantcostsortaketherelevantrisks.TheIsraelieconomyhas,by

mostmeasures,beenincomparativelygoodshapesincethe2008financialcrisis.Israeli

businessdoesnotdependsignificantlyonPalestinianlabor,makingitmuchless

vulnerablethanwasSouthAfricanbusiness.169Israelhasnotfacedsignificantsanctions.

ThisenvironmentisradicallydifferentfromSouthAfrica’sdeteriorationinthe1980s.

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Thecostsofrepressionhavenoterodedthebenefitsthatflowfromthestatusquo

enoughforbusinessleaderstotaketherisksinvolvedinpushingforrealchange.The

costoffoodishardlycredibleasmotivationtoembarkontheriskypathtowards

negotiationswithlong-timeadversaries.BouillonreportsthatIsraelibusiness

involvementintherunuptotheOsloaccordsintheearly1990failedpartlybecausethe

businesseliteswhoparticipatedwereinterestedinpeaceonlyontheirterms,toget

boycottslifted,andgainaccesstoregionalmarkets.170Todate,thesameseemstobe

trueofBTI.

Ademographicoxymorondoesindeedthreatentheviabilityofa“Jewish

democracy”makingthepoliticalstatusquounsustainableinthemediumterm,butitis

farfromclearthatademocraticalternativewillwintheday.Significantpartsofthe

IsraelirightappearincreasinglywillingtosacrificedemocracytoretainaJewishstate,

orperhaps–thoughfewwillsaythis–toengageinannexationandethniccleansing.171

IfthereisaMiddleEasternanaloguetoSouthAfricans’decisiontoembraceaunitary

democracy,itisunclearwhowouldsupportit.Evenifsomeinthebusinesscommunity

weretoentertainit,thereisnothingremotelyresemblingaKgroupwithinBTI.This

makesitdoubtfulthatanyonecouldshiftitscenterofgravityinanysuchrisk-

embracingdirection.Butpartitionismostlikelynotaviableoptionanymoreeither,

giventheentrenchedandgrowingsettlercommunityintheWestBankandthereality

thatthePalestinianeconomywouldnotbeviable.

OurfocusonbusinessintheSouthAfricantransitionshedslightontwodebates

aboutdemocratization,onepoliticalandoneeconomic.Thepoliticaldebateconcerns

whetherdemocracyemanatesprimarily“fromabove”asapactamongelites,or“from

below”–theconsequenceofanorganizedinsurgency.Junget.alrejectedthisdebateas

artificialinthatsuccessfultransitionsinvolvebothdecisiveactionfromaboveatkey

juncturesandbuildingsupportfrombelowtolegitimatetheemergingorder.172But

Junget.almissedtheroleplayedbybusinessatbothlevels.Theprisoners’dilemma

underlyingthenegotiationscreatedtheneedforathirdpartythatwasenoughofa

stakeholdertowanttoworkforacooperativeoutcome,butsufficientlyindependentto

betrustedbybothsides–especiallywhenthegoinggotrough.Businesswasuniquely

placedtoperformthatrole.

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Withrespecttopressurefrombelow,theinsurgencyhadmadetheeconomic

statusquounsustainablebytheearly1970s.173Butthisdidnotmakeatransitionto

democracyinevitableorevenlikely.Acoup,protractedcivilwar,orsomenewbrutal

regimemighthaveresultedinstead.Afterall,whenIanSmith’sgovernmentunilaterally

declaredindependence(UDI)fromBritaininSouthernRhodesia1965,therewasno

effortbywhiteRhodesianbusinessleaderstofosterthedemocratictransitionthat

HaroldWilson’sgovernmentinLondonwasdemandingasthepriceforindependence.

Instead,underthreatofseveredeconomictiesandsanctions,theybackedarepressive

newwhiteminorityregimeagainstinternaloppositionandtheUK.Inreturn,after

SmithdeclaredUDI,hisgovernmenthelpedbusinessweatherthesanctionsby

stockpilingtobacco,subsidizingindustrialdiversificationandagriculture,andusing

publicemploymenttosavejobs.174175

Creativeinterventionbybusinessleadershelpedforestallthiskindofoutcome

inSouthAfrica.Indeed,wesawthattheirinteractionswithinsurgentleaders,whilenot

formalnegotiations,mirroredthestructureofthepoliticalnegotiations.The

legalizationofblacktradeunionsthatbusinesssupportedinthe1970s,andthe

corporatistmanagementofindustrialrelationsitusheredin,helpedcreatethisnew

order.Itbecameatemplateforfuturedealingsbetweenbusinessandlaborbothinthe

economyandintheserviceofpoliticalchange.

Theeconomicdebateconcernswhetherdemocracyarrivesonthebackofthe

bourgeoisie,asMoore(1966)maintainedor,asscholarslikeRueschmeyer,Stevens&

Stevens(1992)contend,onthewingsoftheproletariat.176Theviewthatemergeshere

hasmoreincommonwiththescholarshiponcorporatismandtheroleofcrossclass

alliancesincreatingwelfaresstates.177Theseliteraturesbeginbyrecognizingthatfirms

andunionsoftendonotoperateintheinterestsof“capital”and“labor.”Stigler(1971)

pointedoutlongagothatfirmslobbyforregulationsthatunderminecompetitionin

theirindustriesandPeltzman(1976)addedthatthestate’sresponsivenessis

conditionedbypoliticalconstraints.178Bythesametoken,unionsseeklaborlawsthat

shieldtheirmembersfromlabormarketcompetition–whichhascostsfornonunion

laborandtheunemployed.Corporatistarrangementsareessentiallycollusive

agreementstogetgovernmenttohelpfirmsandunionspursuetheircommoninterests

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whileexternalizingthecostsontoothers.Itwouldbeanoverstatementtosaythatin

SouthAfricabusinessesandworkersplannedtocreatearegimethatwoulddothat.But

ithasbeenabyproductoftheircourtshipandmarriagedatingbacktothe1970s.

Thiscooperationbetweenbigbusinessandinsurgentunionsstandsareminder

thatgoodthingsdonotalwaysgotogether.Vitalasthatcooperationwastothepeaceful

demiseofapartheid,thedownstreameffectshavebeenmixed.Oneconsequencehas

beenalabormarketregimethatcontributestoexceedinglyhighlevelsof

unemploymentandmarginalizeslaborthatisoutsidethecorporatistbargaining

structures.179180Fourdecadesafterthewildcatstrikesthatusheredinbusinesssupport

forblackunionsandledtothecreationoftheNUMandthenCOSATU,aseriesofwildcat

strikeseruptedintheminesatMarikana,outsideRustenburgintheNorthWest

Province.Itculminatedinahorrificpolicemassacreof34miners.181Thestrikeswere

triggeredbyperceivedsweetheartdealsbetweenNUMrepresentativesandtheLonmin

mineownersattheexpenseoffrontlineworkers.182183Commentatorswerequickto

pointtothebitterironyofthislegacyoftheliberationstruggle,whichwouldhavebeen

unimaginabletoitsarchitectshalfacenturyearlier.184

VI.Conclusion

Itwasclearbythe1980sthatapartheidwasnotsustainable,butitwasnot

obviousthatchangewouldhappensosoonorwithoutmorecarnageandadescentinto

full-blowncivilwar.Ifthathadhappened,thereisnoreasonforconfidencethatthe

conflictwouldhaveendedinthecreationofademocracy.Yetinitiatingtalkswasabold

movethatcouldeasilyhavebackfiredforbothsides,destroyingthelivelihoodsand

evenlivesofthosewhotooktherisks.Stayingthecoursewasalsohard,withmassacres,

assassinations,andrecriminationsrepeatedlythreateningtoderailtheprocess.

Politiciansoneachsidepreferredpeacetodestroyingthecountrythroughrepression

orwar;neitherpartycouldachievethisoutcomeunilaterally.

Businessplayedavitalroleinhelpingthepartiesnegotiateitinstead.Byforging

connectionswiththeanti-apartheidmovement,businessleadersdevelopedtrust

relationshipsthathelpedgetthepoliticalelitestothetable,andwhichbusinesslater

utilizedtoplayanessentialintermediaryrolewhentalkscollapsedandviolenceflared.

Bysignalingtheiroppositiontoapartheid,businessleadersforced“enlightened”

Page 37: Business and the South African Transition

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governmentelitestorealizetheircommitmenttoapartheidwasillfated.And,though

businessleaderswereneverinvolvedinformalnegotiationsontheeconomy,they

convincedANCleaderstomoderatetheireconomicpolicy.Thisalsomadecompromise

withthegovernmentmorelikely.

Critically,thesmallgroupofpowerfulbusinessleaderswhotookpartinthe

processwerenotneutralthirdparties.Onthecontrary,theywereheavilyinvestedin

thesystemandhadagreatdealtolosefromfurthereconomicdeclineonthebackof

politicalupheaval.Thisbothmotivatedthemandgavethemthecredibilitytohelpthe

politicalactorsintheirstumblingeffortstobuildthetrustneededtocooperate.

BusinessleadersdidnotnegotiateSouthAfrica’stransition,butitmightwellnothave

happenedwithoutthem.Bankrunsareforestalledbydepositors’insurance;athird

partyguaranteethatgivesdepositorsenoughconfidencenottoescalatethecrisisintoa

catastrophe.Therearenothirdpartyguarantorswhenpoliticalconflictstartsescalating

towardcivilwar,butSouthAfricanbusinessleadersimprovisedwhatmighthavebeen

thenextbestthing.

Studyingregimechangeisabitlikestudyingearthquakes.Predictingwhenthey

willhappenishopeless,butplatetectonicscantellusalotaboutwheretheyareliable

tooccurandhowdangeroustheyarelikelytobe.Studyingtransitionstodemocracy

addsanotherchallenge:evenifwecanbeconfidantthataregimewilleventuallyfail,it

mightnotbereplacedbyademocracy.Thatoftendependsonunpredictablefactors.

Fewwouldclaim,forinstance,thatSouthAfricacouldhavetransitionedtoademocracy

intheearly1990swithouttherareleadershipskillsofNelsonMandelaandF.W.de

Klerk.Butnoonecouldhavepredictedthattheywouldbeintherightplaceattheright

timetoconsummatethedealthattheydid.Thisistrue,butwecanstilltrytoisolate

factorsthatmakedemocratictransitionsmoreorlesslikelyintheeventthatthe

contingenciesdounfoldfavorably.Nobodycouldhavenegotiatedademocratic

transitioninSouthAfricain1970.185Ourgoalherehasbeentoexplainhowandwhy

SouthAfrica’spoliticalgeologychangedenoughtomakeitpossibletwodecadeslater,

andtospelloutitsimplicationsforothertransitionalsettings.

Ourcentralfocushasbeenononeofthetectonicplates:business;principally

whitebigbusiness.Thereasonisnotthatitwasthemostimportant,butratherthatits

Page 38: Business and the South African Transition

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importancehasnotbeenfullyappreciated.Businessplayedmajorrolesinreshapingthe

perceptionsandagendasonbothsidesofthepoliticaldivide;increatingsocialsupport

foratransitiontotheneworder;inbuildingtrustandthenrepeatedlyrebuildingit

whennegotiationsstaggeredandcollapsed;inmanagingspoilerswhosoughttoscuttle

thetransition;andinensuringthatthefoundingelectionstookplaceasscheduledand

thatallpartiesacceptedtheresult.Thisdoesnotreadilytranslateintosomepercentage

ofthevarianceinexplainingdemocratictransitions,butitdoeshelpusseewhythere

areobstaclestotransitionsthatnooneelsewilllikelybeabletoremove.Understanding

whatittookforSouthAfricanbusinesstosucceedhelpsusevaluatepotential

transitions,bothwherebusinesshasbeeninvolvedandwhereithasnot.

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Notes

1Byconventionalmeasuresofbattledeathsper1,000ofpopulation,partsofthecountrycrossed

thethresholdintocivilwarinthemid1980s.Bytheearly1990stheconflictintheeasternpartofthe

countrycertainlyhadcrossedthethreshold,seeNicholasSambanis,“WhatIsCivilWar?Conceptual

AndEmpiricalComplexitiesOfAnOperationalDefinition,”JournalofConflictResolution48(2004):

814-58.

2PrimeMinisterPWBothafirstused“Totalonslaught”inaspeechinParliamentin1978.It

quicklybecameshorthandfortheperceivedSovietagendaforSouthAfricaduringtheColdWar,see

WillieEsterhuyse,Endgame:SecretTalkstoEndApartheid(CapeTown:Tafelberg,2012),p.32.

3CourtneyJung,EllenLust-OkarandIanShapiro,“Problemsandprospectsfordemocratic

settlements:SouthAfricaasaModelfortheMiddleEastandNorthernIreland,”inIanShapiro,ed.,

TheRealworldofDemocraticTheory(Princeton:PrincetonUniversityPress2011),80-142,pp.110-

114,133-40.

4JamesReadandIanShapiro,“TransformingPowerRelationships:Leadership,Risk,AndHope,”

AmericanPoliticalScienceReview108,no.1(2014):40-53.

5SeePeterB.Rosendorff,“ChoosingDemocracy,”EconomicsandPolitics13,no.1(2001):1-28;

CarlesBoix,DemocracyandRedistribution(Cambridge:CambridgeUniversityPress2003);Daron

AcemogluandJamesA.Robinson,EconomicOriginsofDictatorshipandDemocracy(Cambridge:

CambridgeUniversityPress,2006).

6JamesFearon,“RationalistExplanationsforWar,”InternationalOrganization49,no.3(1995):

379-414.

7Huntington(1991)callsdescribesconflictsas“transplacements”andPrzeworski(1991)calls

them“extrications.”Forfurtherdiscussion,seeIanShapiro“Democraticinnovation:SouthAfricain

comparativecontext,”WorldPolitics,Vol.46,No.1(October1993):121-50.

8ButhelezialsolostfavorwithhisformeralliesintheANCaftertransformingandtheZulu

culturalmovementInkathaintoanethno-nationalistparty,seeAllisterSparks,TomorrowisAnother

Country:TheInsideStoryofSouthAfrica’sRoadtoChange(Chicago:UniversityofChicagoPress

1996).

9Asheputitinhisautobiography:“Ifwedidnotstartadialoguesoon,bothsideswouldbe

plungedintoadarknightofoppression,violence,andwar…Bothsidesregardeddiscussionsasasign

ofweaknessandbetrayal.Neitherwouldcometothetableunlesstheothermadesignificant

concessions…Someonefromoursideneededtotakethefirststep.IchosetotellnooneofwhatI

Page 40: Business and the South African Transition

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wasabouttodo…Iknewthatmycolleaguesupstairswouldcondemnmyproposal,andthatwould

killmyinitiativeevenbeforeitwasborn,”seeNelsonMandela,LongWalktoFreedom:The

autobiographyofNelsonMandela(Boston:Little,BrownandCompany,1994),457-8.

10HermanGiliomee,“SurrenderwithoutDefeat:AfrikanersandtheSouthAfricanMiracle,”

Daedalus126,no.2(1997):113-46.

11FortheANC’sreactiontotheRubiconspeech,seeOliverTambo,“ResponsetoP.W.Botha’s

‘Rubicon’speech,”Lusaka,August16,1985.

https://www.nelsonmandela.org/omalley/index.php/site/q/03lv03445/04lv04015/05lv04016/06l

v04025/07lv04026.htm[11-03-2015].OntheresponseamongwhiteSouthAfricansseeHerman

Giliomee,“TheRubcionrevisited,”PoliticsWeb:NewsandAnalysis,20August,2008.

http://www.politicsweb.co.za/news-and-analysis/the-rubicon-revisited[11-03-2015].

12Thevetooverride(whichrequiresatwothirdsvoteinboththeHouseandtheSenate)made

theComprehensiveAnti-ApartheidActof1986lawonOctober2,1986.

13MargaretLee,“TheRepublicofSouthAfrica,”ConstantineDanopoulousandCynthiaWatson,

eds.,inThePoliticalRoleoftheMilitary:AnInternationalHandbook,(Westport,CT:GreenwoodPress,

1996),374-390,p.379.

14RobertAxelrod,TheEvolutionofCooperation(NewYork:BasicBooks,1984),p.138.

15JianzhongWuandRobertAxelrod,“HowToInterpretNoiseInTheIteratedPrisoner’s

Dilemma,”RobertAxelrod,ed.,inTheComplexityofCooperation(Princeton:PrincetonUniversity

Press,1997),33-39.

16IanShapiro,PoliticsAgainstDomination(Cambridge:HarvardUniversityPress,2016),pp.14-

20.

17AsMandela,LongWalktoFreedom,noted,failurewouldhavemeantoblivionforhim:“My

isolationfurnishedmyorganizationwithanexcuseincasematterswentawry:theoldmanwas

aloneandcompletelycutoff,andhisactionsweretakenbyhimasanindividual,notarepresentative

oftheANC.”Mandela,LongWalktoFreedom,pp.457-59,466-67.

18ReadandShapiro,TransformingPowerRelationships:Leadership,Risk,AndHope.”

19WilliamsRocky,“TheOtherArmies:ABriefHistoricalOverviewofUmkhontoWeSizwe(MK,

1961-1994),”MilitaryHistoryJournal11,no.5,(2000).

20Woodprovidesamodelofstrategicinteractionbetweenelitesandinsurgentsbutdoesnot

characterizeitasaprisoner’sdilemma.Rather,conflictisParetooptimalinitiallyandasinsurgent

mobilizationtransformstheplayers’payoffsovertime,itevolvesintoanassurancegame.Elisabeth

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JeanWood,ForgingDemocracyfromBelow:InsurgentTransitionsinSouthAfricaandElSalvador

(Cambridge:CambridgeUniversityPress2000),pp.213-18.

21AnthonyButler,CyrilRamaphosa(Johannesburg:JacanaMedia,2008),p.117.

22SheilaRule,“Bothascornsplanstotalkwithrebels,”NewYorkTimes,September9,1985

http://www.nytimes.com/1985/09/09/world/botha-scorns-plan-for-talks-with-rebels.html[07-13-

2015];AlanCowell,ThosetripstoLusakaaresendingsignalstoPretoria,”NewYorkTimesNovember

3,1985http://www.nytimes.com/1985/11/03/weekinreview/those-trips-to-lusaka-are-sending-

signals-to-pretoria.html[07-13-2015].

23Thesetripsincluded:adelegationfromtheProgressiveFederalParty,aliberalparty

representedinparliament,inOctober1985;eightuniversityofStellenboschstudentsinNovember

1985;AnglicanChurchdelegationinDecember1985;studentuniongroupsinMarchandApril1986;

CatholicbishopsdelegationinApril1986;organizedblackbusinessinMay1986;UniversityofCape

TownandUniversityoftheWesternCapedelegationinSeptember1986.HughMacMillan,The

LusakaYears:TheANCinExileinZambia,1963to1994(AucklandPark,SouthAfrica:JacanaMedia,

2013).

24JohnDugard,HumanRightsandtheSouthAfricanLegalOrder(Princeton:PrincetonUniversity

Press,1978),p.155.

25WillieEsterhuysereportsthatBothaplannedtoarrestthepredominantlyAfrikaans-speaking

delegateswhometwiththeANCinSenegalin1987,suggestingthattheintelligenceagencybossNiel

Barnardpersuadedhimagainsttheidea,Esterhuyse,Endgame:SecretTalkstoEndApartheid.

26InterviewwithPalloJordan,July162013.

27NealChapmanandPeterWrighton,“CivilSociety:TheRoleOfBusinessAndTheChurchesIn

FacilitatingTheTransition,”inSouthAfricaat10:PerspectivesbyPolitical,BusinessandCivilLeaders

(CapeTown:Human&Rousseau,2004),29-44.p.32.

28MichaelHiltzik,“ThepoliticsofprofitinSouthAfrica,”LosAngelesTimes,July9,1990.

http://search.proquest.com/latimes/printviewfile?accountid=15172[07-13-2015].

29Tooze,Adam,TheWagesofDestruction:TheMakingandBreakingoftheNaziEconomy(New

York:Penguin,2008),pp.99-134.

30DespiteHarryOppenheimer’soppositiontothetrip,hewasconsideredtobepoliticallyleftof

GavinRelly.Rellysupportedtheideaofatricameralparliament,whichOppenheimeropposed,see

StefanKanfer,TheLastEmpire:DeBeers,Diamonds,andtheWorld(NewYork,NY:FarrarStraus

Giroux,1993),pp.347,354.

31SaulDubow,Apartheid:1948-1994(Oxford:OxfordUniversityPress,2014),p.244.

Page 42: Business and the South African Transition

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32TheunsEloff,“TheBusinessCommunityAfterApartheidAndBeyond,”IanShapiroandKahreen

Tebeau,eds.,inAfterApartheid:ReinventingSouthAfrica?(Charlottesville:UniversityofVirginia

Press,2011),105-35,p.106.

33Wood,ForgingDemocracyfromBelow:InsurgentTransitionsinSouthAfricaandElSalvador,p.

6.

34Moreover,theANChadlimitedinterestinestablishingtieswithliberalparliamentarians,

realizingthatanydialoguetoendapartheidwouldhavetotakeplacewiththeNationalParty.There

wasnoroomfortheliberalProgressiveParty,whoseanti-apartheidstanceinparliamentmeantthat

itwasalienatedfromtherealleversofpower.TheANCthusneededcontactsthatcouldhelpthem

penetratetheAfrikaans-speakingestablishment,observesWillieEsterhuyse,anAfrikaneracademic

whometwithexiledANCleadersonbehalfofthestate’sintelligencewing.Hemakestheadditional

pointthattheANCperhapsfeltagreaterkinshipwiththesocialdemocraticphilosophyoftheNP

thantheEnglish-speakingliberalpoliticians.Esterhuyse,Endgame:SecretTalkstoEndApartheid,35.

35GaySeidman,ManufacturingMilitance(BerkleyandLosAngeles,California:Universityof

CaliforniaPress,1994),pp.73,90.

36NicoliNattrass,“BusinessandEmployersOrganisationsinSouthAfrica,”OccasionalReport5,

EmploymentandTrainingDepartment(Geneva:InternationalLabourOrganization,1997),pp.11-

12.

37ElisabethWoodshowsthatintheearly1970s,strikingworkerscomprisedabouttwopercent

ofallworkers.Whilethiswasupfromclosetozerostrikeactivityinthedecadebefore,strikes

subsequentlyroseinthe1980s.Herdatashowthepercentofstrikingworkerssoaredtoahighof

over10percentafter1985,stabilizingatlevelsaroundthreetofourpercent.Wood,Forging

DemocracyfromBelow:InsurgentTransitionsinSouthAfricaandElSalvador.

38Angloarguedforallworkerstohavetradeunionrights,includingforeignnationsinSouth

Africa.Itwastheonlyminingcompanytodo,accordingtoAngloexecutiveBobbyGodsell(written

replyfromBobbyGodselltoquestions.21January2013).

39Seidman,ManufacturingMilitance,pp.128-130.

40Butler,CyrilRamaphosa,pp.116,124-5.

41HaroonBhorat,KarmenNaidooandDerekYu,“TradeUnionsinSouthAfrica,”CélestinMonga

andJustinYifuLin,eds.,TheOxfordHandbookofAfricaandEconomics:PoliciesandPractices

(Forthcoming)(OnlinePublication:OxfordUniversityPress,2014),p.3.

41JeremySeekingsandNicoliNattrass,Policy,Politics,andPovertyinSouthAfrica(London&

Johannesburg:PalgraveMacMillan,2015),pp.53-79.

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42SeidmanManufacturingMilitance,pp.84-5.

43Butler,CyrilRamaphosa,pp.114-5.

44Godselllaterconfessedthatperhapstheynaivelyfailedtorecognizehowintensethepolitical

clashwouldbe,seeButler,CyrilRamaphosa,p.125.

45“I’veneverthoughtthatthepolicyofracialdiscriminationhadbeenagreatbenefittobusiness

becausewhileitmayhavehadtheeffectofkeepingwageslow,italsohadtheeffectofkeepinglabor

exceptionallyinefficient.Ibelievethatapartheidissomethingthatworksagainsttheinterestof

economicdevelopment,notforit.”MarilynBerger,“HarryOppenheimer,91,SouthAfrican

Industrialist,dies,”NewYorkTimes,August21,2000

http://www.nytimes.com/2000/08/21/business/harry-oppenheimer-91-south-african-

industrialist-dies.html[07-13-2015].

46InLusaka,GavinRellyaskedtheANCtokeeptheirfingersoutofthetradeunionmovement,to

whichANCexecutivecommitteememberMacMaharajrepliedthatitwastoolate,seeMacMillan,

TheLusakaYears:TheANCinExileinZambia,1963to1994,p.202.

47AngloexecutiveMichaelSpicerrecalledHarryOppenheimer’sviewonunions,saying,“Hesaid

thatinamodernindustrialeconomyit’smuchmorefunctionaltodealwithorganizedlaborthan

withdisorganizedlabor.We’dhadtheexampleofthestrikesinDurbanin1973,aseriesofother

strikesinthe1970sshowingwhatdealingwithdisorganizedlaborwaslike.Hesaidthegains,

despitethefactthattheunionswillbepoliticizedwillultimatelyinthelongtermbegreaterthanthe

problems.”InterviewwithMichaelSpicer,January10,2013.

48ElisabethJeanWood,“AnInsurgentPathtoDemocracy:PopularMobilization,Economic

Interests,andRegimeTransitioninSouthAfricaandElSalvador,”ComparativePoliticalStudies34,

no.8(2001):862-888.

49FrankCurtis,“ForeignDisinvestmentandInvestment–SouthAfrica1960-1986,”Zbigniew

Konczacki,JaneParpartandTimothyShaw,eds.,inStudiesintheEconomicHistoryofSouthernAfrica

(NewYork,NY:FrankCass&Co.Ltd,1991),175-210,p.199.

50InterviewwithMichaelSpicer,January10,2013.

51InterviewwithSidneyFrankel,March20,2013.

52Privateinvestmenttumbledfromaboutsixpercentofallcapitalstockintheearly1980stoless

thanfourpercentinthemid-1980s.Short-termcapitalflowsalsotookaseriousknock;in1985,the

countryexperiencedanetlossofUS$15billion(in1990dollars)andremainedinnegativeterritory

fortherestofthedecade,seeWood,ForgingDemocracyfromBelow:InsurgentTransitionsinSouth

AfricaandElSalvador,pp.153,156.

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53MeyerallegedlygotafishhookstuckininhisfingerwhichRamaphosaremovedwithapairof

pliersaftergivinghimashotofwhiskeyandsaying“you’llhavetotrustme.”

54Sparks,TomorrowisAnotherCountry:TheInsideStoryofSouthAfrica’sRoadtoChange,pp.3-4,

177-9.

55TheMeyer/Ramaphosarelationshipmatterednotonlybecausetheyturnedouttobethe

principalNPandANCnegotiators.WhenthenegotiationscameclosetocollapseaftertheBoipatong

massacreinJune1992,theirjointeffortswerevitalinde-escalatingtheviolence,seeEsterhuyse,

Endgame:SecretTalkstoEndApartheid,p.294.

56MichaelHiltzik,“ThepoliticsofprofitinSouthAfrica,”LosAngelesTimes,July9,1990.

http://search.proquest.com/latimes/printviewfile?accountid=15172[07-13-2015].

57Wood,ForgingDemocracyfromBelow:InsurgentTransitionsinSouthAfricaandElSalvador,15.

58Anonymousinterviewwiththeauthor.

59In1985,theANC’smilitarywingsetoffabombataseasidetownaroundChristmasthatkilled

fivecivilians.In1986,anotherbombkilledthreepeople.

60InterviewwithChrisBall,July16,2015.

61HermanGiliomee,TheAfrikaners:BiographyofaPeople,2nded.,(Charlottesville:Universityof

VirginiaPress,2010),pp.487-585.

62MacMillan,TheLusakaYears:TheANCinExileinZambia,1963to1994,200.

63Esterhuyse,Endgame:SecretTalkstoEndApartheid,p.20.

64ThiswasoneofseveralmeetingsorganizedbyjournalistAnthonySampsonandformereditor

DavidAstor,seeRobertHarvey,TheFallofApartheid:TheInsideStoryfromSmutstoMbeki

(HampshireandNewYork:Palgrave,2001),p.15.

65TheANCaskedChrisBallfollowinghistriptoLusakabefore1985tohelporganizemeetings

withthegovernmentbutmoreconservativegovernmentleadersrefusedtheproposal(Interview

withChrisBall,July16,2015).

66Harvey,TheFallofApartheid:TheInsideStoryfromSmutstoMbeki,p.23.

67Ibid.,p.20.

68Ibid.,p.127.

69Esterhuyse,Endgame:SecretTalkstoEndApartheid,p.333.

70RupertheadedtheRembrantGroup,oneofthecountry’sfivemajorconglomerates.

71Butler,CyrilRamaphosa,p.107.

72Butler,CyrilRamaphosa,p.273.

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73Membersofthelegalcommunityhavesubsequentlythiscaseanhistoricalillustrationofthe

executive’sabuseofthejudiciary.

74ChrisBall,incorrespondence.

75Ballrecalls,“I’llneverforgetatonestageaskingChris,“So,arethereanyparticularleadersthat

youhaveinmind?”Hiscommentwas,‘Ifweknewtheleaderswewouldn’tbeaskingyoutomake

contactwiththem.’Soascrazyasitsounds,1985-86wedidn’tactuallyknowwhowasit.”Interview

withChrisBall,July16,2013.

76“Afteroneofthelatenightmeetingsoneofthebusinessmenwasfollowedandtwonightslater

hishomewasattackedwithgunfire,”twobusinessmenlaterrecounted.“Withinthesamefortnight,

Christowaspulledofftheroadbyhoodedgunmenwhofiredathimashestoodbesidehiscar,”

ChapmanandWrighton,“CivilSociety:TheRoleOfBusinessAndTheChurchesInFacilitatingThe

Transition,”p.33.

77Forsome,thedeterminationtopersistarosefromaveryrealsensethattimewasrunningout

foranegotiatedtransition.AsonebusinessmansaidofNelsonMandelaatthemeeting,“Whatscares

meisthatthereisa70-year-oldclocktickingawayatPollsmoorPrisonandwhenthatclockstops

thistypeofopportunitymaynolongerexist,”seeMaxduPreez,GavinEvansandRosemaryGrealy,

eds.,TheBroederstroomEncounter:BusinessmeetstheUDFandCOSATU(Johannesburg,Consultative

BusinessMovement,1988),p.5.

78InterviewwithChristoNel,March20,2013.

79DuPreezet.al,TheBroederstroomEncounter:BusinessmeetstheUDFandCOSATU,p.78.

80TheunsEloff,“TheConsultativeBusinessMovement:1988-1994.ASubmissiontotheTruthand

ReconciliationCommission,”Unpublishedreport,December14,1997,pp.9-10.

81InterviewwithColinColeman,March05,2013

82GuyStanding,JohnSender,andJohnVeeks,RestructuringtheLabourMarket:TheSouthAfrican

Challenge(Geneva,Switzerland:InternationalLabourOrganization,2000),p.170.

83InterviewwithColinColeman,March05,2013andinterviewwithChristoNel,March20,2013

84InterviewwithColinColeman,March05,2013

85SAIRRtableinO’Malleyarchives

https://www.nelsonmandela.org/omalley/index.php/site/q/03lv02424/04lv03275/05lv03294/06l

v03321.htm

86TheTRClaterconfirmedwidespreadallegationsthatthestatehadarmedandtrainedtheIFP,

ranitsownhitsquads,andspreadmisinformationabouttheliberationmovements,seeAudreyR.

ChapmanandPatrickBall,“LevelsofTruth:Macro-TruthandtheTRC,”AudreyR.ChapmanandHugo

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vanderMerwe,eds.,inTruthandReconciliationinSouthAfrica:DidtheTRCDeliver?(Philadelphia,

Pennsylvania:UniversityofPennsylvaniaPress,2008),143-168,p.167.87CraigCharney,“CivilSociety,PoliticalViolence,andDemocraticTransitions:Businessandthe

PeaceProcessinSouthAfrica,1990to1994,”ComparativeStudiesinSocietyandHistory41,no.1

(1999):182-206,p.187.

88PeterGastrow,BargainingforPeace:SouthAfricaandtheNationalPeaceAccord(Washington,

D.C.:UnitedStatesInstituteofPeace,1995),p.18.

89Kraft,Scott,“SouthAfricaisAnkle-DeepinBlood,”LATimes,May25,1991

http://articles.latimes.com/1991-05-25/news/mn-2013_1_south-africa[07-19-2015]

90Wren,ChrisopherS,“UnrestMediatorNamedbyDeKlerk”,May26,1991.

http://www.nytimes.com/1991/05/26/world/unrest-mediator-named-by-de-klerk.html[07-19-

2015]

91BusinessleadersreportedlyreachedoutdirectlytoButhelezitosecuretheIFP’sinvolvement,

thoughaccountsvaryregardingwhoinbusinessplayedthisrole.Gastrowsuggeststheinclusionof

SeanCleary,abusinessmanandpoliticalconsultant,securedtheIFP’ssupportfortheprocess,see

Gastrow,BargainingforPeace:SouthAfricaandtheNationalPeaceAccord.OthersmaintainthatJohn

HallandBobbyGodsellofAnglo-AmericanwereabletopersuadeIFPleaderMangosuthuButhelezi

toattendthemeeting,seeKimonPhitidis,“BarloworldCaseStudy,”Unpublishedreport,2006,20.

92Gastrow,BargainingforPeace:SouthAfricaandtheNationalPeaceAccord,pp.22-4.

93BarlowRandalsoletthedelegatesuseitsheadquartersforthemeeting.

94TheDanishandBritishgovernmentsalsocontributedsubstantialfunds.Itisunclearwhatthe

relativecontributionwasanditmaybethatthebulkofoperationalcostscamefromforeign

governments,seeGastrow,BargainingforPeace:SouthAfricaandtheNationalPeaceAccord,53.

95AccordingtoaBarlowmanager,ArchbishopTutu,whosurprisedtheparticipantsbyattending

theMiddelbergforum,concludedwithaprayerandtheremarkthat“ifwhatwashappeningin

Middelburgcouldberepeatedthroughoutthecountry,thanSouthAfricawouldhaveagreatfuture

aheadofit,”seePhitidis,“BarloworldCaseStudy,”p.17.

96“CaughtintheCrossfire,”leaderarticle(nobyline),FinancialMail,June14,1991.

97InterviewwithAndreLamprecht,March19,2013.

98InterviewwithRoelfMeyer,March20,2013.

99Thebusinesscommunitydidcomeundersomecriticismforsupportingtheprocessunevenly

andnotcommittingresourcesinthehardesthitareas.Theseconcernsunderscorethechallengesof

organizingadiversecommunitywithdifferentlevelsofresourcesandunderstandingsoftheir

Page 47: Business and the South African Transition

-46-

responsibilitytohelpblackcommunities,seePhiroshawCamayandAnneJ.Gordon,“TheNational

PeaceAccordanditsStructures,”SouthAfricaCivilSocietyandgovernanceCaseStudyNo.1.Co-

operativeforResearchandEducation.Johannesburg,SouthAfrica,2000;Charney,“CivilSociety,

PoliticalViolence,andDemocraticTransitions:BusinessandthePeaceProcessinSouthAfrica,1990

to1994,”p.195.

100InterviewwithColinColeman,March05,2013

101InterviewwithCasCoovadia,November21,2012.

102CODESA’ssecondroundbeganinMay1992butsooncollapsedaftertheBoiphatongmassacre

ofabout50membersofaninformalresidenceinJune,killedbyhostel-dwellersaffiliatedwiththe

IFP.TheANCstormedout,accusingthegovernmentofcomplicityinthemurder.Communication

betweenkeymembersofthenegotiationsteamcontinued,however,andnegotiationsresumedin

April1993.

103InterviewwithTheunsEloff,November19,2012.

104OtherintervieweesdenythattheNPandANCagreedtointernationalmediation.Interview

withRoelfMeyer,March20,2013.

105OkumuwarnedButhelezithathewouldfacethemilitaryonslaughtofthenewgovernmentif

hepersistedinviolentresistance.Butheleziagreedtoparticipateintheelectionsonthecondition

thatthenewdispensationrecognizedthesovereigntyofthekingdomofKwaZuluandthat

internationalmediationoccurredaftertheelection.InterviewwithColinColeman,March05,2013.

106TheGroupofSevenrefusedeventotakeapositionintheMay1998referendumonthehard

wonGoodFridayAgreementthathadbeennegotiatedamongthekeyplayers.PortlandTrustReport,

TheRoleofBusinessinPeacemaking:LessonsfromCyprus,NorthernIreland,SouthAfricaandthe

SouthCaucasus(London:PortlandTrust,2013),pp.24-5.

107Butler,CyrilRamaphosa,p.122.

108GregMyre,“Afrikanerchurchwon’tdenounceApartheid,”WashingtonPost(March18,1989)

http://www.washingtonpost.com/archive/local/1989/03/18/afrikaner-church-wont-denounce-

apartheid/02940f2b-3128-45f6-bbbf-a142a7a2232e/[07-20-2015].

109BarryBotha,TheAfrikaner’sEmancipation:FreeingSouthAfricansfromtheirApartheidMindset

(Indiana:iUniverse,2008),163-5;HermanGiliomee,TheAfrikaners:BiographyofaPeople

(Charlottesville:UniversityofVirginiaPress,2003).

110DavidGoldfield,AmericaAflame:HowtheCivilWarCreatedaNation(NewYork:Bloomsbury

Press,2012).

111Esterhuyse,Endgame:SecretTalkstoEndApartheid,pp.136-7.

Page 48: Business and the South African Transition

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112AllanMeltzerandScottRichard,“ARationalTheoryOfTheSizeOfGovernment,”Journalof

PoliticalEconomy89,no.5(1981):914-927.

113Forasurveyofadditionalobstaclestodownwardredistributionincapitalistdemocracies,see

IanShapiro,TheStateofDemocraticTheory(Princeton:PrincetonUniversityPress,2003).

114BarringtonMoore,TheSocialOriginsofDictatorshipandDemocracy:LordandPeasantinthe

makingoftheModernWorld(Boston:Beacon,1966);Carles,DemocracyandRedistribution,pp.38-44,

78-88.

115Capitalcontrolswouldnotberelaxeduntil1995,andtheANCgovernmentonlybegan

allowingSAcompaniestoshifttheirprimarylistingstotheLondonexchangein1998,seePatrick

Bond,2012.“Financialization,corporatepower,andSouthAfricansubimperialism,”RonaldCox,ed.,

inCorporatePowerandGlobalizationinU.S.ForeignPolicy.Routledge(London:Routledge,2012),

114-32.

116LeonardThompson,AHistoryofSouthAfrica3rded(NewHaven:YaleUniversityPress,2000),

p.221.

117Emigrationfiguresareoftenunreliable,butdatafromtheSouthAfricanInstituteforRace

Relationsshowsthat47,000peopleemigratedin1977and1978,twicethenumberineachyearas

insubsequentyears.Factoringinimmigrationinflowsrevealsthatthenetlosswasabout3,000

people.Thisdoesnotincludeblackeconomicmigrants.SAIRRfiguresinSallyFrankental,andOwen

Sichone,“Statesofemergency:Urbanresistanceandviolence,”SouthAfrica'sdiversepeoples:A

referencesourcebook(SantaBarbara,CA:ABC-CLIO,2005).

118AlbertHirschman,Exit,Voice,andLoyalty:ResponsestoDeclineinFirms,Organizations,and

States(Cambridge:HarvardUniversityPress,1970).

119DeTocqueville’s(1969[1835,1840])agendainwritingDemocracyinAmericawastoconvince

theFrenchAristocracythatflatoutoppositiontodemocracywouldfail,andthattheywouldbe

betterofflearningfromtheAmericansthatembracingdemocracywouldenablethemtoshapit’s

futurecourse.SeeespeciallythePrefacetothe12thedition,publishedin1848.AlexisdeTocqueville,

1969[Vol.I:1835,Vol.II:1840]DemocracyinAmerica,J.P.Mayer,ed.,(NewYork:PerennialClassics,

1969).

120SamuelHuntington,TheThirdWave:DemocratizationintheLateTwentiethCentury(Norman&

London:UniversityofOklahomaPress,1991);AdamPrzeworski,DemocracyandtheMarket:Political

andEconomicReformsinEasternEuropeandLatinAmerica(Cambridge:CambridgeUniversityPress,

1991);CourtneyJung,EllenLust-Okar&IanShapiro,“Problemsandprospectsfordemocratic

settlements:SouthAfricaasaModelfortheMiddleEastandNorthernIreland,”IanShapiro,ed.,in

TheRealworldofDemocraticTheory(Princeton:PrincetonUniversityPress,2011),80-142.

Page 49: Business and the South African Transition

-48-

121SeeWood,ForgingDemocracyfromBelow:InsurgentTransitionsinSouthAfricaandEl

Salvador,p.5.

122InterviewwithCasCoovadia,November21,2012.

123ItwascleartotheANCinLusakathatpartofbusiness’sagendawastosteeritclearof

communism,recallsanANCmemberpresentatthemeetingwholaterwentontooccupyasenior

governmentroleafter1994(personalinterview,November23,2012,offtherecord).ForAnglo

executiveMichaelSpicer,theLusakameetingsrevealedthat“theANChadnomoderneconomic

thinking.”TheFreedomCharterwas“atbest,FabianSocialist;atworst,Stalinist”andeitherwaya

thirty-yearolddocument,saidSpicer.InterviewwithMichaelSpicer,January10,2013.

124Kanfer,TheLastEmpire:DeBeers,Diamonds,andtheWorld,p.354.

125Personalinterview,23Nov2012,offtherecord.

126AnthonySampson,Mandela:TheAuthorizedBiography(NewYork,NY:Knopf,1999),p.429.

127WrittenreplyfromBobbyGodselltoquestions.21January2013.

128TonyBloom,amajorSouthAfricanbusinessman,isquotedassayingthat“English-speaking

businesshasaboutasmucheffectongovernmentpolicyasaping-pongballbouncingoffastone

wall.”JesmondBlumenfeld,SouthAfricainCrisis(Kent:CroomHelm,1987),p.39.

129WrittenreplyfromBobbyGodselltoquestions.21January2013.

130Butler,CyrilRamaphosa,pp.120-1.

131MeyerandWesselsbothwouldbothbecomeseniorministersinthe1990s.

132InterviewwithSidneyFrankel,March20,2013.Butbusinesswasnotalwayssensitivetothe

constraintsofpoliticians,saidaformerverligtecabinetministerunderBotha.Theyoftenpresented

plansthatechoedoppositionviewsandviolatedgovernmenttenets,whichwas“untenable”.He

preferredtheapproachofpeoplelikestockbrokerSidneyFrankelandsomeAfrikanerbusinessmen

whometwithrisingstarsinthegovernmenttochatabouttheirexperiences,detailsthathecoulduse

indebateswithmoreconservativecabinetmembers.Interviewwiththeauthor,March23,2013,off

record.

133JessBenhabib,andAdamPrzeworski,“ThePoliticalEconomyofRedistributionunder

Democracy,”EconomicTheory29(2006):271-290.

134J.A.Kalley,E.Schoeman&L.E.Andor(Eds),SouthernAfricanPoliticalHistory:achronologyof

keypoliticaleventsfromindependencetomid-1997(Westport:Greenwood,1999),pp.357,425.

135IanShapiro,PoliticsAgainstDomination(Cambridge:HarvardUniversityPress,2016),pp.46-

61.

Page 50: Business and the South African Transition

-49-

136Amulti-partycommissionsetupinearly1993todeterminenewregionalboundariesbefore

theelectionsexplaineditsdecisionnottodelimitaregionforanAfrikanerhomelandbecausethe

Afrikanergroupsthatitconsultedhadbeenunabletoagreeonalocation,seeRachelJacksonand

TumiMakgetla,“RedrawingtheMapforDemocracy,”ForeignPolicyOctober11,2013.

137WilliamSmith,“SouthAfrica:Alurchtotheright,”Time,May18,1987.

http://content.time.com/time/magazine/article/0,9171,964393,00.html[07-20-2015].

138A2010OECD/UNstudyratesSouthAfricaandTunisiaasthetwomostdiversifiedeconomies

ontheContinent(OECD/UN2010:20).

139JoeGerson,“CorporateandFinancialStructures,”MerleLiptonandCharlesSimkins,eds.,in

StateandMarketinPost-ApartheidSouthAfrica(Boulder,CO:WestviewPress,Inc,1993),161-201,p.

165.

140Seeappendixfortheorganogram.

141Butler,CyrilRamaphosa,117;RobinMcGregor,1993.McGregor’sWhoOwnsWhom:Front

MatterThirteenthEdition(CapeTown:Juta&Co.Ltd,1993).

142BenFineandZavarehRustomjee,ThePoliticalEconomyofSouthAfrica:FromMinerals-Energy

ComplextoIndustrialization(London:Hurst,1996),pp.148-9.

143Thoughtherewereothersecretmeetingsthatthegovernmentknewaboutandeven

participatedin,seeEsterhuyse,Endgame:SecretTalkstoEndApartheid.

144TheunsEloff,“TheConsultativeBusinessMovement:1988-1994.ASubmissiontotheTruth

andReconciliationCommission,”Unpublishedreport,December14,1997,p.2;DuPreezetal.,The

BroederstroomEncounter:BusinessmeetstheUDFandCOSATU,p.3.

145RussellHardin,CollectiveAction(Baltimore,MD:JohnsHopkinsUniversityPress,1982),p.41.

146Thereluctanceofthebroaderbusinesscommunitytoincurthecostsofmeetingwiththe

leadershipoftheanti-apartheidmovementdidslowdowntheeffortsoftheKgroup.InJune1987,

only12businessleaderswerewillingtoputtheirnamestoapublicappealforthestateofemergency

tobelifted,anactionrequestedbytheirUDFcounterparts,andtheletterdidnotgoahead.Laterthat

year,aplanned20-asidemeetingbecameasix-asidewhentwothirdsofthebusinessdelegation

decidedtoleaveaheadofthearrivaloftheUDFandtheirallies.Themeetingstilltookplaceandby

thenextyear,businesswasabletoorganize40privatesectorrepresentativestomeetforaweekend

encounterwithpro-democracyactivists.Eloff,“TheConsultativeBusinessMovement:1988-1994,”

p.3.

147Atfirstitwastwoandthenfourseniorbusinessmen.Ibid.,p.10.

Page 51: Business and the South African Transition

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148TheCBM’ssuccesspointsoutatensioninorganizingbusiness.Bigbusinesscanoften

commandtheattentionofpoliticalelitesbutdialogueinstitutionsprioritizeinclusivity.Asone

executiveobserved,“Boththenandnowtherewerelotsofveryseniorbusinesspeoplethatsaid,“We

don’tneedthesebodies.IcancallthePresident…I’mnotgoingtositinlong-windedmeetingswith

otherpeople.’…Thatwasoftenfunctionalforthatindividualcompanybutdysfunctionalforthe

collectivebusinessinterest.”InterviewwithMichaelSpicer,10January2013.

149Businesselitestraditionallywereusedtobeing“moreindividualistic,self-motivatedandfast

moving”thantheircounterparts.Representativesofpro-democracyorganizations,bycontrast,

operatedaccordingto“anentirelydifferentprocessdictatedbyconsultation,andadherencetomore

clearlydefinedlong-termstrategy,”seeDuPreezet.al,TheBroederstroomEncounter:Businessmeets

theUDFandCOSATU,pp.35-36.

150HenryHansman,TheOwnershipofEnterprise(Cambridge,MA:HarvardUniversityPress,

1996).

151InterviewwithChrisBall,July16,2015.

152InterviewwithPalloJordan,July16,2013.

153AdamPrzeworski,MichaelAvarez,JoseCheibubandFernandoLimongi,Democracyand

Development:PoliticalInstitutionsandWell-BeingintheWorld,1950-1990(Cambridge:Cambridge

UniversityPress,2000),pp.89,91-103.

154Read&Shapiro,“TransformingPowerRelationships:Leadership,Risk,AndHope.”

155Junget.al,“Problemsandprospectsfordemocraticsettlements:SouthAfricaasaModelfor

theMiddleEastandNorthernIreland,”p.124.

156RimelHabibi,“IsraeliandPalestinianbusinessleaderssupportSecretaryKerry’seffortsand

DCtalks,”WorldEconomicForumnewsrelease(July29,2013)

http://www.weforum.org/news/israeli-and-palestinian-business-leaders-support-secretary-kerry-

s-efforts-and-dc-talks[07-22-2015].

157KlausSchwab,“BreakingtheimpasseintheMiddleEast,”ElArabiyaNews(May29,2013)

http://english.alarabiya.net/en/views/news/middle-east/2013/05/29/Breaking-the-impasse-in-

the-Middle-East.html[07-23-2015].

158BreakingtheImpassewebsite.http://www.breakingtheimpasse.org/en/about-bti[07-22-

2015].

159JohnReed,“IsraeliandPalestinianexecutivesinMideastpeaceinitiative.FinancialTimes(May

23,2013)http://www.ft.com/intl/cms/s/0/6be56356-c389-11e2-8c30-

00144feab7de.html#axzz3gdTvdSdU[07-22-2015];GreerCashman,“IsraeliandPalestinianleaders

Page 52: Business and the South African Transition

-51-

joinforces,”JerusalemPost(March25,2014)http://www.jpost.com/Business/Business-

Features/Israeli-and-Palestinian-business-leaders-join-forces-346383[07-22-2015].

160SeeJalalAbukhater,“OutrageasPalestiniantycoonMunibMasrihostsIsraelisettlermogul

withEgypt’sAmrMoussaandJordanex-PM,”TheElectronicIntifada(November5,2012)

https://electronicintifada.net/blogs/jalal-abukhater/outrage-palestinian-tycoon-munib-masri-

hosts-israeli-settler-mogul-egypts-amr[07-31-2015]

161InterviewwithZahiKhouri,ChairmanofPalestinianInvestmentTourismCompanyandCEOof

PalestinianNationalBeverageCompany.January3,2016.Khouriaddedthatinhisjudgment

Palestinianbusinessleadersdifferedinthattheywerecommittedtopeace.FoundingBTImember

MosheLitchman(GeneralPartnerofIsraelGrowthPartners)notedthattheneutralitystancewas

necessarytokeepthediversemembersofBTIonboard,butthatitlimitedtheirabilitytopush

politicianstowardspecificgoals.Interview,December31,2015.

162DaliaHatuqa,“Israeli,Palestinianbusinessleadersseektobreakimpasse,”Al-Monitor

PalestinePulse(May24,2013)http://www.al-monitor.com/pulse/originals/2013/05/israel-

palestine-economic-forum-business.html[07-22-2015].

163AtaNovember2013BTIconferencesponsoredbytheMiddleEastInstituteinWashingtonDC,

bothMunibAl-MasriandYossiVardideclinedtoansweraquestionfromIanShapiroaboutany

possibleroleforHamas.SeetranscriptoftheBTIkeynoteluncheon,November26,2013.

http://www.mei.edu/content/transcript-breaking-impasse-keynote-luncheon[07-23-2015].

164ReluctancetospeaktoHamaswasconfirmedinaJanuary4,2016interviewwithBTImemberEdouardCukierman(managingpartnerofCatalystinvestments)whosaidthatnodirectdialogis

possiblewithHamas,whichwouldinanycasenotpermitanyonefromGazatoparticipateinBTI.

AnotherfoundingBTImember,formerIDFBrigadierGeneralMichaelHerzog,observedthatcreating

aGazanegotiatingchanneltoHamaswhilecuttingoutthePalestinianAuthoritywouldbeharmfulto

Abu-Mazen,theonlyleaderinapositiontopushtowardatwostatesolutiononthePalestinianside.

HerzogthoughtthattheIsraeligovernmentwouldinanycaseinterveneifanyIsraelibusinessleader

triedtospeaktoHamasleaders.Interview,January3,2016.165Niv,Elis,“Breakingtheimpasseatanimpasse?”JerusalemPost(May14,2014)

http://www.jpost.com/Business/Business-Features/Breaking-the-Impasse-at-an-impasse-352207

[07-22-2015].

166Eventually,ontheeveofthe1994elections,MK,thearmedwingsoftheotherresistance

groups,andthehomelandarmiesweremergedwiththeSADFtoformtheSouthAfricanNational

DefenseForce.(Stott2002).Stott,Noel.2002.“FromSADFtoSANDF.”UniversityofWitwatersrand

ViolenceandTransitionSeries7http://www.csvr.org.za/wits/papers/papvtp7.htm[07-22-2015].

Page 53: Business and the South African Transition

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167EllenLustandIanShapiro,“Players,preconditions,andpeace:Whytalksfailandhowthey

mightsucceed,”IanShapiro,ed.,inTheRealWorldofDemocraticTheory(Princeton:Princeton

UniversityPress,2011),143-56.

168BTIransomecommercialsintherun-uptothe2015elections,butinterviewswithMoshe

Litchman(December31,2015)andMichaelHerzog(January3,2016)revealedthatBTIhadallbut

givenuponthepoliticalprocessandwasinsteadpursuingjointeconomicventureswithPalestinians.

169PalestinianworkersmakeuproughlythreepercentofallpeoplewithjobsinIsrael.The

Palestinianstatisticsbureaureportedin2015that110,300PalestiniansworkedinIsraelandthe

Israelisettlements.Moreover,thesearerelativelyunskilledjobs;about65percentofPalestinians

workedinconstruction(PalestinianCentralBureauofStatistics2015).PalestinianCentralBureauof

Statistics,“PressReleaseontheResultsoftheLabourForceSurvey.January-March2015Round,”

May19,2015.

http://www.pcbs.gov.ps/site/512/default.aspx?tabID=512&lang=en&ItemID=1397&mid=3172&wv

ersion=Staging[August6,2015]

TheIsraelieconomyemploysover3millionpeopleandsotheproportionofPalestinians

employedinIsraelisaboutthreepercent.MarkFedlman,“LabourForceSurveyData,Marchand1st

Quarterof2015,”April30,2015,Jerusalem,2.

http://www1.cbs.gov.il/hodaot2015n/20_15_110e.pdf[August06,2015]

170MarcusE.Bouillon,ThePeaceBusiness:MoneyandPowerintheIsrael-PalestineConflict

(London&NewYork:I.B.Taurus,2004),pp.105-12,166-72.

171ForalarminglyhighlevelsofIsraelisupportforethniccleansingseepollresultsreportedby

GideonLevyin“Survey:MostIsraeliswouldn’tgivePalestiniansthevoteifWestBankwasannexed,”

Haaretz(July23,2015)http://www.haaretz.com/news/israel/survey-most-israeli-jews-wouldn-t-

give-palestinians-vote-if-west-bank-was-annexed.premium-1.471644[07-15-2015].

172Junget.al,“Problemsandprospectsfordemocraticsettlements:SouthAfricaasaModelfor

theMiddleEastandNorthernIreland.”

173Wood,“AnInsurgentPathtoDemocracy.”

174IthelpedthatcountrieslikeSouthAfricaandPortugalmaintainedtradewithwhatwasthen

Rhodesia.RobertMcKinnell,“SanctionsandtheRhodesianEconomy.”TheJournalofModernAfrican

Studies7,no.4(1969):559-581.

Further,thegovernmentspentuptotenpercentofitsbudgetonsubsidiestoagriculture.Feeling

thepinchfromsanctions,organizedbusinesslaterurgedthegovernmenttosettlewiththeBritish.

Still,thevastmajorityofwhiteRhodesiansralliedbehindSmith’swhovowedtoprotectthemfrom

communismandBritain’sdesiretoerodethecountry’sindependence,seeRobertC.Good,The

Page 54: Business and the South African Transition

-53-

InternationalPoliticsoftheRhodesianRebellion(Princeton:PrincetonUniversityPress,1973),pp.82,

159,215.

175Good,TheInternationalPoliticsoftheRhodesianRebellion,pp.215,218.

176Moore,TheSocialOriginsofDictatorshipandDemocracy;DietreichRueschmeyer,Evelyne

HuberStevensandJohnD.Stevens,CapitalistDevelopmentandDemocracy(Oxford,UK:PolityPress,

1992).

177PeterSwenson,FairShares:Unions,Pay,andPoliticsinSwedenandWestGermany(Ithaca:

CornellUniversityPress,1989);PeterSwenson,CapitalistsAgainstMarkets:TheMakingofLabor

MarketsandWelfareStatesintheUnitedStatesandSweden(Oxford:OxfordUniversityPress,2002).

178GeorgeStigler,“TheTheoryofEconomicRegulation,"BellJournalofEconomicsand

ManagementScience3(1971):3–18;SamPeltzman,“TowardAMoreGeneralTheoryOfRegulation,”

JournalofLawandEconomics19(1976):211-40.

179StudiesvarywidelyintheirestimationofunionwagepremiainSouthAfrica,withmorerecent

studiesplacinggreateremphasisoncontrollingforselectioneffects.Anexampleofthisisa2012

studybyBhoratetal,whichfindsthattheunionwagepremiumisabout6%,thebargainingcouncil

premiumfornon-unionworkersisabout10%and22%forunionworkersinpublicbargaining

councils.Previousstudiesfindpremiamuchhigherandinexcessof20%.Bhoratetal.,“Institutional

WageEffects:RevisitingUnionandBargainingCouncilWagePremiainSouthAfrica.”

180JeremySeekingsandNicoliNattrass,Policy,Politics,andPovertyinSouthAfrica(London&

Johannesburg:PalgraveMacMillan,2015),pp.53-79.

181Atotalof44peoplediedduringtheentirestrike.

182Inareportbasedprimarilyoninterviewswithworkers,PeterAlexanderconcludesthat

Marikanawasa“rankandfilerebellion,notaninter-uniondispute,”seePeterAlexander,“Analysis

andConclusion,”PeterAlexander,LukeSinwell,ThapeloLekgowa,BotsangMmopeandBongani

Xezwi,eds.,inMarikana:AViewfromtheMountainandaCasetoAnswer(AucklandPark,South

Africa:JacanaMedia,2013),136-162,p.137.

183Alexander,“AnalysisandConclusion.”

184JohnKane-Berman,“Violencearelicfromthepeople’swartomakeSAungovernable,”Business

Day(August20,2012).http://www.bdlive.co.za/opinion/2012/08/20/violence-a-relic-from-

peoples-war-to-make-sa-ungovernable[07-22-2015].

185Indeed,WalterSisulutoldAnthonySampsonthatcivilwarwouldnothavebeenavoidedeven

ifMandelahadbeenreleasedaslateas1985.DelaywasnecessaryfortheAfrikaners“tosoberup,”

seeHarvey,TheFallofApartheid:TheInsideStoryfromSmutstoMbeki,p.102.

Page 55: Business and the South African Transition

-54-

Appendix

(Source:McGregor1993Frontmatter)

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