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Sanford School of Public Policy

Urban Poverty Workshop, December 4-5, 2014

The New South African Debt Economy

Anne-Maria Makhulu, Cultural Anthropology (Duke University)

(DRAFT - do NOT cite or circulate without author permission, © 2014)

Abstract

This paper argues that urban poverty in South Africa has to be understood historically, that is, in

the context of long enduring policies of land dispossession, peasant proletarianization, and urban

removal that stripped black South Africans of rural land, forcing blacks into the orbit of

industrial work, while simultaneously denying a newly-minted migrant laboring class rights of

urban citizenship. Post-apartheid efforts at “reconstruction and development”—addressing

problems of land hunger and homelessness—have eschewed these deeper historical problems

turning instead to market mechanisms for redress. These have taken a variety of forms: housing

provision without substantial land redistribution; self-adjustment and the repayment of odious

apartheid era debt; the raising of interest rates to effect market integration, causing, in turn, the

collapse of certain key areas of the lower middle class mortgage market; the adoption of cost

recovery as a driver of municipal governance; and finally, jobless growth. These policies

together have driven largely poor black South Africans onto the peripheries of the country’s

cities, into informal settlements, and beyond the formal employment sector into survivalist

activities within the informal economy. The existence of informal settlements under apartheid is

undeniable, but the post-transition turn to liberalization of South Africa’s markets has come in

tandem with the expansion of peri-urbanism and informal economic activities. Since 1994,

inequality has deepened, unemployment has increased, and poor South Africans have found

themselves gradually taking on larger debt burdens. If, following Maurizio Lazzarato, the

central organizing logics of twenty-first century life consist in a relationship between debtor and

creditor—as a new form of absolute power—of financial power, South Africa sits at the

epicenter of a new debt economy that has particularly deleterious consequences for the urban

poor.

Introduction: Cape Town’s Limits

The poor [are those] whose means are barely sufficient for decent independent life…

according to the usual standard of life in this country.

—Charles Booth, 1889

Between the late 90s and early to mid-00s I would become fairly well acquainted with a number

of families on Cape Town’s southeastern perimeter, specifically, in the area of Philippi East—a

sprawling series of contiguous squatter camps that local government now referred to as “human

settlements,” presumably modeling their reformist language after the UN Millennial

Development Goals. The southeastern perimeter of the city and Lansdowne Road in particular,

the arterial that runs its length, persists in reflecting most deeply the legacy of apartheid

segregation and urban management. It is home to the city’s African population, mostly Xhosa

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speakers, black migrants from across sub-Saharan Africa, and coloureds (Afrikaans speaking

people of European, African, Asian, and indigenous descent). Though apartheid legislation no

longer prevails, this dumping ground to which hundreds of thousands were dispatched remains

utterly peripheralized even as the city draws much of its blue collar workforce from its ranks and

Africans and coloureds by their sheer numbers dominate. Marginality is a “myth” (Perlman

2010; cf. Roy 2003) inasmuch as areas such as these have long sustained the city and remain

central to its social, economic, and cultural life. Which is in no way inconsistent with the notion

that spatial-political marginalization has also been the very condition of concentrated poverty

and the necessary turn to informal and unregulated activity.

Among the many people I got to know, the Mfeketos figured prominently in the day to

day of fieldwork. By 2006, Edith, her husband, Solomon, their four children, and a

granddaughter lived in a small Reconstruction and Development Programme (RDP) house set

back from the main road leading out of Lower Crossroads and onto Sheffield Road. Previously a

small informal settlement Lower Crossroads now boasted a population of approximately 8,000.1

The house was organized around a central living space, two bedrooms, and a kitchen, and while

the front of the house was built from brick, the rooms in the rear were pieced together from the

remains of a much older structure, mostly assembled from corrugated iron, cardboard, and plastic

sheeting. This part of the house dated back to the 1970s when the family lived in Old Crossroads

(now its own township and ward district located approximately a mile away). The practice of

recycling building materials is not uncommon and across the city, in both formal townships and

informal settlements, the sedimentations of the city’s history of violence and displacement are

particularly visible in the ways that shacks (ityotyombe) and brick homes (endlini) are very often

conjoined.

This combination of new and old, bricks and mortar, cardboard and tarpaulin are the most

immediate expression of a legacy of past housing restrictions and current policies that are

nominally “colorblind” yet nevertheless confine black and brown people to the city’s limits.

Responding in significant measure to the limitations of post-1994 planned housing delivery,

these “hybrid” homes offer a stopgap. In some provinces budgets have been either over- or

under-spent; public funds have gone to private contractors operating with minimal oversight; and

in general, despite government targets—famously, the claim to one million low-cost homes in

the first five years of democracy—enormous backlogs remain while the quality of completed

homes, their size and structural integrity in particular, is highly questionable.2

John Matshikiza, a journalist at the Daily Mail and Guardian, describes the peculiar

relationship of the townships to the vision of a post-millennial South Africa:

The townships are not shrinking or being dissolved into the greater reality of South

African urban culture of the Third Millennium. On the contrary, they are growing. A

million new township houses have been added to the existing stock by our new Rainbow

Government since 1994. Each unit seems to be even tinier than the housing units we

grew up in—attracting to themselves the colloquial name of ‘vez’inyau, meaning “show

1 Personal communication Gugulethu Sokothi (derived from BKS data source). Also See Ward 35 demographic

profile derived from 2001 Census data

(http://www.capetown.gov.za/en/stats/2001census/Documents/2006%20Ward035.htm, accessed October 24, 2013). 2 As previously noted in the Introduction, the Western Cape Province faces some of the greatest challenges in

housing delivery with a backlog estimated at close to 500,000 making this the province with the greatest increase in

housing demand.

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your feet”—[because] the dwelling is so small that when you sit with your back to the

wall at one end of the house, your feet will be sticking out at the other.3

If the state counts or reckons its progress in numbers of units built, a South African public

focuses on size. Vez’inyau is one expression of the miniaturization of post-apartheid

reconstruction and development (cf. Scott 1998), while Unos (Fiat cars), Smarties (similar to

M&Ms) and even “kennels” are also invoked in describing the RDP starter homes. Two decades

of neoliberalization have reinforced the monetarist logic that drove development even before

1994 and partly explains problems of quality and size. Funded with shallow subsidies

(approximately R16,000 per unit for the first decade following democratization),4 there were

never the incentives to build well and large. It is little wonder that the townships to which

Matshikiza refers have not only proliferated—that they should not only be the source of

deepening class and race based exclusions—but that they should so powerfully recall the past

too. Rebecca Ginsburg reminds us that in the 1950s the state built “quickly and

ruthlessly…Construction crews placed floors directly over boulders, stones, and anything else in

their paths. Some houses were left with field grass growing inside and cement often remained

hanging between unevenly laid bricks” (Ginsburg 1996:129).

Given the scale of dispossession and displacement under apartheid post-apartheid efforts

at delivering housing seem negligible. In the period post-1948, approximately 3.5 million South

Africans were forcibly removed,5 while mandatory construction friezes in African areas created

artificial housing shortages and discouraged urban settlement. These policies complemented a

longer-standing process of land seizure (following the 1913 Natives Land Act) that stripped

Africans of rights in private property and secure land tenure across urban and rural areas.6 All

this is well acknowledged as a starting place in understanding the post-apartheid city. That being

said, I am most centrally concerned in this paper with the deleterious consequences of the new

focus on markets and the resultant failures of vision in transforming the apartheid city. This

“less ambitious goal of public and private intervention” is consistent with the movement away

from top-down reformist strategies of the post-war period and the “championing [of]

privatization of housing supply… and micro-entrepreneurial solutions to urban poverty” (Davis

2006:71; also see de Soto 2000). As we know, free market strategies tend to encourage “private

and personal responsibility and initiative” (Harvey 2001:108) and thereby deny collective

obligation, which in a place like South Africa would be the only way to confront a much longer

history of colonial dispossession.

In the absence of collective action and obligation to reckon with the South African past,

individuals, women in the case of this paper, seem most often to bear the greatest responsibility:

for community, for kin, and for household. They expertly reckon both material and social costs

of life and depend on networks of mutual reliance. This follows in a long tradition of domestic

management, thrift, and financial resourcefulness in African communities (Bähre 2007b). Even

in the early days, in the 1970s, with the illicit establishment of places like Crossroads squatter

camp, despite the absence of formal infrastructure, there were undertakers, makeshift churches,

3 See “Johannesburg: Shanty City, Instant City,” John Matshikiza, Open Democracy, December 13, 2002,

http://www.opendemocracy.net/people-africa_democracy/article_835.jsp, accessed December 13, 2013. 4 For the period of the late 1990s when the Rand was already dropping in value, R16,000 was approximately $2,500. 5 See Department of Rural Development and Land Reform (http://www.ruraldevelopment.gov.za/1913-land-act-

centenary#.Uswwu_bTQ_4, accessed December 22, 2013). 6 Since 1994 black ownership of land has increased from 13 percent to 16 percent. See “‘Good Response’ to Land-

Reform Initiative,” Abhik Kumar Chanda, Mail & Guardian, August 16, 2006.

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schools, and crèches—all signs of a nascent entrepreneurialism and self-sufficiency. More

ubiquitously, the local spaza shop—the corner store run from a private home—has long sold

bread and milk and sweets, homemade foods, and other conveniences.

Edith ran just such a sweet and snack shop from her front yard and could often be found

preparing small fried foods and seasoned chicken feet, which her husband then sold from an

outdoor stand along with loose cigarettes, small packets of crisps, and an assortment of sweets.

This “survivalist” business provided the family with its main source of income bringing in the

equivalent of a few dollars a day.7 Spaza shops occupy a precarious niche within the larger

township economy: at once responsive to extreme competition from local shopping malls (the

Shoprite near Lower Crossroads is less than half a mile away), as well as to smaller concerns,

mostly owned by foreign nationals including Somalis, Ethiopians, and some Zimbabweans.

“Foreigners” are perceived to be hard working—ready to throw in given the relative stability and

prosperity afforded them in South Africa—and people argue that they tend to undercut the local

competition, remaining open later into the evenings and catering to the whims of customers.

Predictably perhaps, South Africans misidentify immigrant small business owners as the source

of larger problems of structural unemployment and occasionally such sentiments fuel violent

attacks against suspected illegals or makwerekwere, as was the case in 2008.8 The fact that

South Africans resort to violence in reasoning their redundancy arguably depends on a broader

problem of state legitimated violence as well (see for example Neocosmos 2011). The kind of

state legitimated violence that brought on South Africa’s mass structural unemployment in the

very first place.

Capital on the Limits

For many residents of Lower Crossroads, so-called “informal” businesses make up in no small

part for the lack of wage-paying jobs, raising fundamental questions about the salience of the

“informal” as an analytic in explaining hybrid zones of productive activity within the national

economy (the largest in Africa) yet whose associated workforce is regarded as largely

superfluous to the formal labor market. This relationship between formal and informal sectors

echoes a broader regional and Continent-wide phenomenon: of forces of globalization that have

resulted not so much in the seamless integration of national economies into the global system,

but rather to “capital flows and markets [at] once lightening fast, [patchy] and incomplete”

(Ferguson 2006:49). Such configurations remind us that rather than failing to meet the endpoint

of the developmentalist telos that such unevenness is inherent to a new and sophisticated world

system (Ferguson 2005:380).

Arendt writing of the concept of superfluity in The Origins of Totalitarianism—of

workers drawn from all over the world by South Africa’s gold rush and industrial revolution—

observed these would otherwise have had little “use or function” (Arendt 1994:189) in the labor

market had it not been for the color of their skins and the preferential treatment afforded white

workers. For Arendt there existed a logical continuity between forms of surplus labor and

surplus populations—populations conceived as subjects for elimination. In this sense, Arendt

7 For an interesting discussion of the dollar a day calculation of poverty see Reddy 2004 “A Capability-Based

Approach to Estimating Global Poverty” in “Dollar a Day: How Much Does it Say?” a special issue of In Focus, a

publication of the International Poverty Centre, United Nations Development Programme. 8 A pejorative for foreigner, makwerekwere ostensibly mimics the sound of those who speak other languages. See

for example http://mg.co.za/article/2008-09-07-cape-town-relocates-xenophobia-refugees, accessed January 5, 2014.

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anticipated Foucault’s biopolitical state, even while the concept was never more than implicit in

her own work.

Echoing Arendt’s observations about the late nineteenth century, by early millennium

households all across South Africa, including on Cape Town’s periphery, were caught in the

crosshairs of market reform leaving many without formal employment and nostalgic for a past of

financial certainties, minimal as these must have been. Solomon Mfeketo’s story was hardly

unusual. He had lost his job in a leather tannery in December 1999 when he was retrenched as

the industry downsized. Even then, five years into South Africa’s democratic transition,

unemployment rates were rapidly increasing (reaching 38.6 percent in 1998),9 and by the end of

that first decade approximately one million jobs had been lost in mining, manufacturing, and

agriculture. These retrenchments were consistent with the state’s implementation of structural

reforms (ironically, self-imposed), while deregulation saw the financial sector expand to

approximately 21 percent of GDP even while employing only a small fraction of the active

workforce (see OECD 2002)10.

There are many interventions to be made in the debate over the success or failure of post-

apartheid economic policy—whether rapid growth has sustained or undermined development or

whether eschewing job creation has in fact dealt a fatal blow. It is certainly fair to say the poor

have been sidelined by a “mode of globalized economics that produces socioeconomic growth

without a commensurate increase in regular wage-paying work” (Murray 2011:149-150). For all

that, volatility in the South African economy and the fact of growing inequality seem particularly

pressing issues. Both strike hardest at the already vulnerable—those without shelter or jobs, the

city itself as a site of both surplus production and struggles over access to surplus, which is

deployed in developing urban infrastructure and in turn enabling the conditions for speculation.

At the other pole, lack of access to capital produces spaces in which neither adequate

infrastructure nor a formal housing market (on which to speculate) exist as in those many

peripheral zones that border the city of Cape Town. These dual forces have not only produced

marginality; they have sustained preexisting marginal relations predating 1994.

Many of South Africa’s economic problems first emerged during the crisis years of the

1970s (a period of over-accumulation of capital) and have worsened with the country’s belated

insertion into the world financial system (cf. Arrighi 1994; Harvey 2003b). Financialization

tends to intensify pre-existing uneven relations inasmuch as specific circuits of capital have a

propensity to expand at much faster rates than others and in so doing create two quite distinct

areas—the one speculative (and hence volatile), the other given to decline (Ashman, Fine and

Newman 2011a). In an economy previously organized around “uneven and combined

development”—as Left scholars were already arguing in the 1970s given the relation of the labor

9 While 2013 third quarter estimates of unemployment hover at 25 percent (see

http://www.statssa.gov.za/publications/P0211/P02113rdQuarter2013.pdf accessed December 13, 2013) for the

period with which the latter half of my field research was concerned 2001 Census data are particularly relevant.

Data disaggregated for Ward 35 (see

http://www.capetown.gov.za/en/stats/2001census/Documents/2006%20Ward035.htm, accessed December 13, 2013)

indicate that approximately 48 percent of people between the ages of 15 and 65 were employed during the period. It

should be emphasized, the South African government has opted for a “narrow” definition of unemployment

covering those seeking jobs, rather than all those of working age desiring job. Notwithstanding this fact, that almost

52 percent of working age people in Ward 35 were unemployed at the time speaks volumes of the unevenness in

joblessness rates across the country and the ways in which unemployment is concentrated in informal settlements

and rural areas. 10 See http://www.oecd.org/dataoecd/48/38/1826412.pdf, accessed December 1, 2013.

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reserves to the country’s cities (see for example Wolpe 1972, 1975)—financialization

exacerbates historically produced unevenness.11 Taken together (a history of radical inequality

and financialization), South Africa has become not only one of the most unequal societies but, in

response and of necessity, the protest capital of the world. Volatile or unstable in two senses

then—in the political and economic sense—the South African economy has sustained fully six

currency crashes between 1996 and 2011 and a sizeable real estate bubble. The latter has led to

an expansion of the consumer credit market, mortgages for the most part (see for example Desai

and Pithouse 2004), and to unsustainable lending driven by consumerism. For ordinary

borrowers high interest rates set by the Reserve Bank—a strategy for belatedly integrating South

Africa into the global financial system—have generated unserviceable levels of debt (cf.

Lazzarato 2011) and in many instances served as the grounds for eviction from homes with

underwater mortgages. In this sense, there is a direct relationship between financialization and

homelessness.

As labor intensive industries (and the production of real goods) gave way to a focus on

financial markets—and corporate treasuries turned to finance capital in search of higher

returns—unemployment levels increased during the mid to late1990s, while many surviving jobs

were casualized. Those who remained in formal employment now bore the added responsibility

for supporting multiple dependents straining already fragile networks of kin (see for example

Barchiesi 2011).12 For a majority of black households this translated into a renewed reliance on

the informal economy, informal circuits of lending and borrowing (including loan sharking),

consumer credit, and an emerging welfare apparatus. Long staples of township life, the fact of

growing structural unemployment suggested increased dependency on informal financial

institutions broadly understood as “financial mutuals.” To be clear, these have a long history

dating back to the nineteenth century. Indeed, with the advent of the migrant labor system,

financial mutuals assisted families with domestic reproduction as households came to span long

distances between the rural areas and the towns. A point to which I will return below.

By early millennium, while black households renewed efforts in self-reliance, the cities in

which they were based, Cape Town included, listed from crisis to crisis—in housing and service

delivery as well as in the employment sector—and yet these were somehow secondary

considerations for city managers and local government officials who turned their attentions,

instead, beyond South Africa. A (failed) bid on the 2004 summer Olympics was quickly

followed by a successful bid to host the 2010 Soccer World Cup. In a new world of “global

cities” and competition with faraway rivals municipal responsibilities have been seemingly

reduced to concerns for international tourism revenue. Thus, by 2010, rather than fulfilling

promises of job creation and public spending, the state was instead placing the finishing touches

on costly soccer stadia. And in the year preceding the World Cup South Africa lost an additional

1.3 million jobs (Bond 2013:577). Supplanting the vision of a post-apartheid city committed to a

11 The expansion of the financial services industry and the focus on shareholder value in driving corporate profits is

largely a phenomenon dating back to the 1980s. 12 The aftermath of Marikana quickly showed that miners who struck demanding wage increases were not only

living in squalid conditions in nearby squatter settlements, but in addition most supported upward of forty

dependents on meager wages. Franco Barchiesi has rightly argued that beyond the problem of growing structural

unemployment in South Africa wageworkers bear particular risk too (2011). They are not only super-exploited in

the mining and agricultural sectors in particular, they also carry those who have fallen out of the wage labor market.

See for example “Marikana Miners in Debt Sinkhole,” Lisa Steyn, Mail and Guardian, September 7, 2012. See

http://mg.co.za/article/2012-09-07-00-marikana-miners-in-debt-sinkhole, accessed December 13, 2013.

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shared responsibility for welfare and equality the notion that Cape Town and other cities might

be regarded as “world class” won the day.

At the grassroots, in communities like Lower Crossroads and adjacent townships,

alongside the informal marketplace most households came to depend on monthly pensions and

child support grants. If the period since the early 1990s had seen the withdrawal of the state and

the penetration of market relations in housing and service delivery; notably, this was also a time

for the steady rollout of a fairly comprehensive system of social assistance, directed precisely

towards undoing the “racial welfarism” of the past (McDonald and Smith 2004:1461). How

could this be genuine neoliberalism? To be sure, social grants (including state pensions and

child welfare support), widely acknowledged as the benefits of these may be,13 are not

necessarily inconsistent with corporatization as an initial phase of neoliberalization. That public

goods, including water and electricity, are delivered with the assumption of full cost recovery—

something that would have been antithetical to the old welfare system—highlights the ways in

which many “benefits” of the new South African state have tended to be offset by additional

costs.

Take the case of government funded schools where the expense of uniforms, textbooks,

and other “fees” deny the poorest children full access to education and where “learners,”

consequently, attend school inconsistently depending on the ability of their families to come up

with the necessary funds. Ferguson has argued that the extensive apparatus of social grants

(based on disability, parental status, or age eligibility) and the proposed basic income grant

(BIG), are “both pro-poor and neoliberal” (Ferguson 2007:79, emphasis in original) and as such

ideologically incoherent. Though social grants undeniably sustain households their capacity for

genuine poverty reduction is questionable not least because economic policy in South Africa has

been so aggressively focused on growth rather than job creation leading to a significant decline

in labor’s portion of the social surplus. In this sense, social grants can hardly be said to be “pro-

poor” or poverty alleviating even if many South Africans have become heavily dependent on

them.14

The Wage Puzzle

At 65, Solomon began collecting a state pension amounting to approximately R800 a month

(USD $120 at the time), while three Mfeketo children were of working age, but had no work, and

a fourth child was still attending school. Very soon, the state pension became a primary source

of income making the household more or less indistinguishable from households across South

Africa, in townships and squatter settlements, rural villages and remote homesteads, where jobs

are scarce and prospects for re-employment are practically non-existent. Excepting the fact of

how common the Mfeketos’ predicament was (and is), as relevant was the kaleidoscopic speed

of state devolution: from post-revolutionary promises of democracy and a caring state

(contrasting so radically with the old regime) to a dramatic shift away from the liberal social

13 See for example “New Study Again Proves Worth of Social Grants in South Africa,” Rebecca Davis, Daily

Maverick, November 27, 2013. See http://www.dailymaverick.co.za/article/2013-11-27-new-study-again-proves-

worth-of-social-grants-in-south-africa/#.UqH5qI3TQ_4 accessed December 6, 2013. 14 In 2005 the total consumer expenditure for the bottom 60 percent of South Africans was slightly less than that of

the top 5.7 percent (totaling over R172 billion. See “Poor Make Rich Pickings,” Hilton Shone, Sunday Business

Times, January 30, 2005. Further, insofar as a deracialized welfare system is concerned it is worth pointing out that

the level of many subsidies fell dramatically between 1994 and 1999, as in the case of the child grant, which

dropped 40 percent.

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contract and towards a commitment to markets. What David Scott has referred to as the new

“blackmail of democracy” (Scott n.d.); a ruse that depends on linking good governance and

market reforms, particularly in the Third World. Little wonder that mutual aid, burial societies,

and savings schemes—important as these had always been in black social life—were becoming

absolutely critical.

Economists have been hard pressed to explain how it is that economic actors survive in

the face of very few resources, even as microeconomics professes a concern with household

earnings and patterns of consumption. By contrast, anthropology has long conceived of the

domestic arena in a way exclusive of questions of consumer behavior and rational choice, and

rather in terms of processes of social reproduction in its broadest sense—defined not only as the

material and biological basis of existence, but its symbolic, and ritual ground as well. Yet, with

so much of the world’s population reliant on informal sources of income and no apparent

substantive means of social reproduction the questions that economists seek to answer are surely

more pressing than ever (see Davis 2006; also see Sayer and Walker 1992; Hutchinson 1996;

Piot 1999; Weiss 2004; Ferguson 2006). One attempt to unravel this economic mystery or

“wage puzzle” has come in the form of a South African study,15 which argues that the nation’s

poor make use of a dizzying array of both formal and informal financial instruments for the

purposes of surviving one financial year to the next (see Collins, Morduch, Rutherford and

Ruthven 2009; cf. Roitman 2005). The study showcases a combination of mechanisms for

saving, banking, borrowing, lending, and channeling money into socially reproductive labor.

These include: bank accounts, pensions, insurance, store credit and credit cards, retirement

savings, and debt administration, as well as savings schemes, burial societies, and loan sharking.

Like many parts of the world, popular rotating credit and savings schemes offer the advantages

of one, increased purchasing power, in that members generally pool resources when looking to

make large household purchases, and two, promote fairly consistent saving by encouraging

members to do so as a group. The study rightly observes that while poor households may have

very little money “this [doesn’t] mean that they [don’t] manage what they have.”

In South Africa, financial mutuals have a relatively extended history. In the second half

of the nineteenth century, following the discovery of gold and diamonds and with the advent of

migrant work, families confronted the problem of retaining the integrity of households that were

essentially scattered across significant geographical distances. Burial societies, for example,

functioned in part to assure the return of the deceased to the ancestral home and were, and still

are, accommodating of groups ushering from a given region, in the case of Xhosas the Eastern

Cape—whether Cala, Lady Frere, or Pondoland. Similarly the stokvel or umgalelo, the savings

scheme, served to guarantee a degree of financial security in the face of the risks of long distance

migration, the inevitable lean times in a given year, and the general uncertainties of living

outside the formal banking system. With proletarianization and forced resettlement families

were less able to depend on one another so that financial mutuals served to enable reliance on

people other than kin as well. Such informal institutions and funds remain hugely popular in

South Africa and by all accounts are responsible for upward of R1-2 billion in annual turnover

(Bähre 2007b). That many residents of both Old and Lower Crossroads still maintained ties to

the rural Eastern Cape and were inured to a tradition of financial mutuals meant that many were

members of all manner of schemes even in the early 00s.

15 The “Financial Diaries” survey is probably one of the most extensive studies of financial practices amongst the

poor and was in part motivated by government and financial industry awareness of the need to offer financial

services to poor households in South Africa (see www.financialdiaries.com accessed December 19, 2013).

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For several years, Edith had belonged to a savings scheme along with nine other

members. Thandu ‘Xolo (Lover of Peace) was a formal association that boasted a written

constitution with strictly observed regulations. The group had been making monthly

contributions of R30 (approximately USD $4.50 in 2006) per member over the course of eleven

months—January through November. While December was set aside as a time for cashing out

and preparing for the following year: paying annual school fees, buying uniforms and books,

making the journey to the rural areas, and attending to general home maintenance, including

roofing, and repainting. The “December holidays” were not so much associated with religious

celebrations per se, even as people referred to the giving of Christmas gifts, as they were with

both the ritual and practical reproduction of the household, perhaps most symbolically marked by

the circumcision of young men. Indeed, trips to the rural Eastern Cape were directly linked to

the desire to see young boys enter circumcision schools (abakwetha) close to familial

homesteads and in so doing effectively renewed connections between town and country as well

as shared lifeworlds separated by hundreds of miles. Young boys, on the other hand, destined to

become “new men” or amakrwala through a central rite of passage, spoke of the generational

aspects of social reproduction as critical to their complete integration into the world of adults and

all the privileges and responsibilities that attended the transition.

The group had a fixed deposit16 (or savings) account and three of the members served as

co-signatories going to the bank after monthly meetings to deposit contributions. The co-

signatories were also responsible for notifying the bank of large withdrawals, usually just before

December, for maintaining the association ledger, and guaranteeing a minimum balance in the

association’s account. To the uninitiated, collective savings groups present no particular

advantages over individual banking. But almost universally, those who participate in what are

locally referred to as umgalelo argue that saving together rather than alone is much more

rewarding, in a double sense. Members who pool resources in a fixed deposit account see their

savings appreciate incrementally with interest earnings as compared to the much smaller sums

they might deposit individually. The interest earnings on fixed accounts were approximately

7.0-7.3 percent in 2006 (based on annual deposits of R10,000 or less). And while Edith was

unsure of the exact rate, she insisted she had made considerable interest earnings in the prior

year, though, given a spike in inflation her real rate of return would have been negative. But

perhaps just as significant, is that deposits of this kind demand a very particular form of fiscal

discipline. The group restricts the withdrawal of funds in so doing redirecting consumer desire

and ensuring the security of the domestic balance sheet. What seems to underwrite such

disciplining is the logic of delayed gratification through which lump sums are converted into a

steady trickle; what Karl Polanyi thought of as redistributive and reciprocative systems or

“redistribution writ small” (cf. Polanyi 2001).

These activities depend on the constitution of a certain kind of self-regulating subject—a

“responsible and moral individual and economic-rational actor” (Lemke 2001:201). Members

often spoke of “belt-tightening” strategies, comments consistent with discourses of self-

empowerment that have become pervasive in the context of the devolution of state welfare

functions. While it is easy enough to argue these were compensations for the failures of the

market such discourses are equally legible as the means through which social actors transcend

their existing frames of reference. Thus, on one hand such narratives of frugality and self-

restraint expose the limits to social reproduction and yet simultaneously highlight the myriad

16 Note that a so-called Standard Bank “Society Scheme” is geared precisely to umgalelos and encourages group

savings.

10

ways in which subjects act upon the world and in so doing reshape the very structures of

austerity and fiscal discipline. These are not only moral-rational subjects then, but subjects with

a highly pragmatic orientation to lived circumstances (Comaroff and Comaroff 1997:66).

Edith’s umgalelo had been in operation for almost fifteen years. Established in Old

Crossroads, the scheme moved when its members were relocated to a transit camp in Lower

Crossroads in the early 1990s, following their ouster from Crossroads by local strongman,

Jeffrey Nongwe. Not all such schemes are this stable of course and many function without

formal banking instruments; instead participants make contributions to one another on a rotating

basis throughout the year and recipients have discretion in the use of funds.17 Both systems have

their advantages, although generally, those making use of the banking system are more resilient

and their schemes have greater longevity. The same is equally true of burial societies and the

presence or absence of a fund determines methods of payment to members, the size of

membership, and myriad aspects of the burial organization. The Mfeketos had certainly reaped

small, but meaningful benefits over time. The seats in the living-room, a kitchen unit, fridge,

bed, school fees, and uniforms had all been paid for through Edith’s hard work and due

diligence. She was the first to acknowledge that without the savings scheme and the support of

her fellow members, many of them neighbors and friends of longstanding, it would have been

virtually impossible to extend the kind of moral and financial support to her family in the way

that she had.

If self-imposed austerity measures can be understood as part and parcel of a new

neoliberal logic—a mode of self-regulation and of “savings as ‘spirit’ or ‘moral’ discipline”

(Khan and Pieterse 2004:30)—the broader context in which acts of abstention and austerity were

and continue to be enacted is just as critical to understanding responses to hardship.18 Consider,

the caprice of the Reserve Bank, specifically, wild fluctuations in interest rates, which undercut

rates of return and real purchasing power. Consider too, the increasingly speculative nature of

the South African economy as the productive sector gave way to financial services. In this

climate of uncertainty, umgalelos have taken on two distinct purposes: one, to surmount what

appear as the impossible challenges of living on the social margins, exposed to scarcity and

want, and two, in so doing, the schemes, have ironically, replicated the logic of micro-

entrepreneurialism so central to sustaining the privatization regime. Indeed, only a few years ago

municipal government in the City of Cape Town restructured housing subsidies to “encourage”

the practice of saving amongst low-income households, in so doing demonstrating a complete

ignorance of enduring practices of economization. For beneficiaries of housing subsidies the

consequences were significant: those without the financial means to provide their own homes

were, for the very first time since the implementation of a post-apartheid housing program,

17 See “Finance-South Africa: Rare Insights into Poor People’s Bank,” Christina Scott, Inter Press Service News

Agency, Sunday, January 7, 2007, www.ipsnews.net/print.asp?idnews=28818, accessed March 16, 2009. 18 I want to be cautious in suggesting that poor people are not consumers, they are. In fact, as Wal-Mart and other

low-end chains demonstrate the poor are a tremendous source of profit, largely by volume over price. Rather, my

point is that the mechanisms of “belt-tightening” to which many respondents referred, suggested on one hand

patterns of delayed consumption (waiting till December to make large purchases and so on), but on the other, a very

carefully drawn distinction between basic needs and notions of desire. These are not universal in any way, but at

every turn households necessarily negotiated a fine line between the two. Moreover, this is not an argument based

on assumptions about utility. Consider Helen Meintjes’ work on Soweto housewives and the uses to which so-

called “luxury” appliances are put (or not) in the running of households and what conceptions of useful and highly

valued labor are at stake in decisions about washing clothes by hand while owning a washing machine, for example

(2001).

11

obliged to make statutory top-up payments (drawn from savings) on otherwise free benefits. A

similar logic informs the introduction of school feels, the argument being that small contributions

promote a sense of ownership in public education, ignoring the challenges this poses for out-of-

work parents.

This isomorphic relationship between official policy and everyday life, between so-called

formal and informal economies, is central to a set of questions that organize my argument about

urban poverty, specifically through the conjuncture of kinship and political economy (White

2001a), the politics of domestic life and politics more broadly. What sort of practice and politics

of life and forms of life does this conjuncture foreground and what connections might these have

to a much broader set of global forces? The practices of fiscal austerity I have described till this

point strike at the core of households, not only on the peripheries of South African cities, but

cities globally, and raise vexing questions about the linkages between housing and the

reproduction of labor power, particularly in circumstances in which security of housing tenure is

not assured. Further, what kinds of new subjectivities emerge in the face of the partial

disarticulation of daily life from circuits of capital and commodities, not least wage work; what

forms of desire are shaped by austerity; and how does austerity refigure, often enough, complex

practices of money exchange, lending, and abstention? For example, how is it that in contexts of

spiraling debt, exorbitant interest rates, and land speculation—all symptoms of the

transnationalization of cities—that institutions of money lending, saving, and banking amongst

the poor come to correspond to certain aspects of the larger political economy, specifically to

heightened levels of personal indebtedness. Notably, in poorer households, the resort to both

formal and informal credit instruments has taken on critical dimensions. In a statement by the

Financial Sector Campaign Coalition in May 2004 the difficulty in transforming financial policy

to promote growth reflected a number of concerns ranging from limited investment in the public

sector to the enduring problem of diversity in terms of the “nature, size, and ownership of

institutions.” However, the statement was particularly concerned with the question of debt. And

I quote:

While the “richest South Africans pay on average 20% interest for credit per annum, [the]

poorest pay on average 175%! The state of indebtedness of our people is at crisis point.

Only last week the Constitutional Court dealt with the plight of Karoo residents who lost

their houses for miserable debts of as little as R198 for buying food on credit.19

Debt as Politics: The Search for Financial Sovereignty20

My focus on the domestic space as a site of uncertain reciprocative and redistributive work

highlights the challenges facing South Africans living on the margins of the new democracy.

Wherein the uncertainty that comes with efforts to socially reproduce households translates into

a general anxiety that little can be brought to completion; that the conditions of possibility for

life itself are at once virtually impossible and yet must be faced however in extremis the situation

19 See “Statement by the Financial Sector Campaign Coalition on Financial Sector Transformation,” May 26, 2004.

Also see the “Financial Diaries” study, which suggests that in households surveyed an “average household portfolio

ha[d] 4 savings instruments, 2 insurance instruments and 11 credit instruments” a measure of the degree to which

credit and indebtedness are critical to day to day survival. 20 I borrow the term “financial sovereignty” from the film Bamako. Directed by Malian filmmaker, Abderrahmane

Sissako, Bamako sits squarely in the tradition of “j’accuse” and sets the stage for a trial of the World Bank by

members of African Society.

12

might be. Families like the Mfeketos and others I describe below, continually invent and

reinvent the worlds they occupy in ways that both deftly acknowledge and ignore the “crisis”

that seems to engulf them, suggesting that crisis is not particularly useful in explaining how lives

at once severely circumscribed by need are often simultaneously sites of aspiration and hope.

Hoping for something and willing its realization are grounds for a certain futurity and for

keeping crisis at bay, while such hopes in their turn translate into directed attempts at

transformation, if only minute ones—through the melding of old shacks with new RDP houses,

through small and enterprising survivalist businesses, through the dispatching of school-age

children to the countryside to be cared for by extended family. The broader question implied by

these observations concerns the ways in which social actors, while limited in their capacities to

change the worlds they occupy, nonetheless become sufficiently inventive so as to outdo, again if

only in small ways, the conditions of their own existence, often enough working to connect new

and old forms—again, this is most concretely given in the amalgamation of brick homes and

shanties—and thereby in a sense risking what is already known (Sahlins 1995:247) in order to

redefine the possible from within the constraints of dominant structures.

Edith Mfeketo, Unathi (a close friend of Edith’s), and several others frequently referred

to the era of apartheid wage work as a time of great challenge, but also certainty. Racially

discriminatory welfarism and exploitative relations of the wage21 placed women in the position

of having to subsidize households. At the same time, weekly wages provided a small, but

regular flow of resources some of which were diverted into burial associations and savings

schemes. By contrast, post-liberation, the very same schemes while continuing to serve as

savings funds also took on a more prominent role in lending. Opened up to the global market

place, South Africans now confronted a barrage of images and messages about conspicuous

consumption—on highway billboards, in shopping malls, and on television, and for some even

on the Internet—that presupposed purchasing power. Yet the new consumer culture remained

without foundation in a solid wage economy. The younger generation’s response to the

paradoxes of the new consumer culture have been particularly striking, notably the recent

emergence of i’khothane derived from the Zulu word ukukhothana meaning to “lick like a

snake” or to compete playfully. Young people in the townships are increasingly organizing

potlatch like events where money and expensive clothes are burned in highly performative acts

and through which prestige and respect are accrued. Spoken of in generational terms, that is

assuming the incommensurability of an older working class set of aspirations and those of

younger people seasoned to non-work or the absence of work, i’khothane has become a

generational flashpoint.

In the remainder of this paper, I want to address various economic survival strategies and

the ways in which these confront a new kind of material politics or “material-possible.”

Specifically, I want to consider the place of debt and the use of credit instruments, both formally

and informally.

The Matter of Risk

At each stage, risks can be converted into securities, sliced up, repackaged, sold on and

sliced up again. The endless opportunities to write contracts in underlying debt

instruments explains why the outstanding value of credit-derivatives contracts has

21 On the mines, given the system of company stores and remittances to the countryside, miners could find

themselves virtually penniless despite wage earnings (cf. Taussig 1987).

13

rocketed to $26 trillion—$9 trillion more than six months ago, and seven times as much

as in 2003.

—The Economist22

No progressive observer of the US economy can fail to be startled by the high level of

debt borne by the bulk of the population. These are folk who borrow not for luxury, but

for survival.

—Vijay Prashad (2003:4)

Scholars of South Africa have noted the peculiar synergy between the formal and informal

economies (see for example Ashman, Fine and Newman 2011a; Bond 2013)—heightened

speculation in financial and real estate markets on one hand and the use of (consumer) credit

amongst the poor on the other. One of the critical sites of continuity between formal and

informal sectors arises precisely in the extension of “unsecured credit” by banks to the nominally

employed. Joining with micro-finance institutions and the pervasive township loan shark or

gooi-gooi scheme (a pyramid scheme)23 banks encourage over-leveraging leading to aggressive

debt collection down the line. Indeed, in the aftermath of the August 2012 Marikana miners’

massacre, at the heart of miner discontent over meager wages was the fact of their indebtedness.

“It did not take long before the lenders’ role in mineworker finance was identified as central to

the worst police massacre in a half-century” (Bond 2013:580).

If the poor are prone to spiraling debt, depend on loan sharking, and other brokerage

relations offering practical, if limited, solutions to the non-productive nature of post-wage work;

the “casino economy, with all its financial speculation and fictitious capital formation (much of it

unbacked by any growth in real production)” (Harvey 1989:332) replicates some of the very

same strategic errors. Both involve a faith bordering on the occult; a faith in the generative

properties of transactions involving either money or capital, and on a general principle: namely

that value can be conjured from nothing or rather from what are largely immaterial stand ins for

value itself. Just as derivatives derive value from other things, other assets, the movement

towards finance seems to depend on producing redundant populations for “capture” by a growing

subprime industry.

We would do well to recall the formula by which money is converted into commodities

and commodities into money prime or M-C-M’ (through “buying in order to sell” as Marx put it)

and how that formula, in the “absence” of commodity production, is rewritten as M-M’ where

capital generates more capital, somehow unmediated by the commodity production process.

Marx was not unaware of the potential of money markets of course nor apparently was John

Wesley who referred to “the hidden, incestuous breeding of cash without exertion” as ‘pariah’

capitalism (see Wesley 1985:271, 276 in Comaroff and Comaroff 1997:172; also see Marx

1991a; Harvey 1982). Marx’ “general formula for capital” concluded with the case of interest-

bearing capital. That is, a mode of circulation in which the intermediate stage was lost and

money begot money or as he characterized it “money which [was] worth more money, value

which [was] greater than itself” (Marx 1990:257). Yet Marx’ primary emphasis on productive

forces and the relations of production as the mechanisms driving world history made the sphere

of circulation a less likely focus, at least as a relative matter. The prominence of finance capital

in the twenty-first century however is hard to ignore, as is the sphere of circulation that makes it

22 See “The Dark Side of Debt,” The Economist, September 23, 2006, p. 11. 23 Gooi-gooi refers to an in-and-out investment.

14

so profitable. Indeed, the emergence of circulation “as the cutting edge of capitalism” has

transformed aspects of our modern market economy in quite radical ways decoupling capital

from sites of production while the forces of circulation have tended to reorganize national

borders, the integrity of national economies, and the very functions of the liberal state (LiPuma

and Lee 2004:9).

Whereas such “cultures of circulation” (Lee and LiPuma 2002) signal the amplification

of circuits of finance capital, and whereas such circuits and their velocity may distinguish the

contemporary conjuncture, the apparent absence of “real production” also marks a mystification

not so much the actual dissolution of the commodity, namely abstracted labor value, in the M-C-

M’ formulation. Still, labor’s apparent disappearance—that is, through a series of geographical

displacements (what Arrighi and others have termed “spatial fixes”)24 (see Arrighi 1994)—is

paralleled by the very real experience of absent wage work and the concomitant spiraling of

extremes of wealth and poverty. In such circumstances experiences of the everyday are

transformed just as the shape and scope of the narratives describing such experiences take on

strange and new form.

Those who somehow beat the odds—riding the roller coaster economy with its currency

crashes, high interest mortgages, and necessary defaults—are thought to have sold their souls to

the devil, devised Faustian pacts, or consorted with witches. In rural South Africa, for example,

farmers perceived to profit against the odds of bad weather, blight, and low commodity prices,

do so, it is argued, because they benefit from the free labor of zombies in their control—armies

of which descend into the fields by moonlight and reap profits for their masters. But just as

zombies come to haunt their owners, following them everywhere “like unruly shadows. Or the

alienated essence of their own labor” (Comaroff and Comaroff 1999:803) bad investments and

the debt they create haunt their investors too. In this sense, financial markets are equally prone

to what I will call mythical thinking, which is to say they assume, particularly in environments in

which certain instruments function outside the reach of regulators and the “velocity of capital”

stands in for “real money,” that profits can be arbitraged in the lag between the moments of

investment and return. And just as zombies persist in reminding their masters of their savage

exploitation, so investing in certain sectors carries enormous risks. Trading in credit is one such

case.

On the one hand there can be no doubt that financial product innovations and especially

new debt instruments associated with new information, communications and technology

simply permit a greater debt load without necessarily endangering consumer finances

(Bond 2006:21).

On the other hand, as the subprime mortgage market’s collapse has shown, there are limits to the

debt burden individuals and formal institutions can bear.25

Marx’ primary object of de-reification was surely the commodity. And one way to

debunk the notion of value as intrinsic to the thing was to show the ways in which commodities

were implicated in a network of social relations and, most fundamentally, the labor process. In

24 One such example would be the emergence of free enterprise zones, which sit “outside” the borders of nation-

states, and effectively conceal or displace sites of production. 25 While personal savings rates hit an all time low in the US in the lead up to the credit crisis, in 2005 and 2006 in

particular, in the aftermath of the beginning of the recession savings rates rose, hitting a new high of approximately

7% of disposable income in the second quarter of 2009.

15

this way the thing-ness of the commodity was set against the process of labor alienation of which

it was a direct and immediate outcome. Marx argued that this process was concealed by the

science of political economy, which instead construed value as a series of formulae bearing “the

unmistakable stamp of belonging to a social formation in which the process of production has

mastery over man, instead of the opposite, [and] appear[s] to the political economists’ bourgeois

consciousness to be as much a self-evidently and nature-imposed necessity as productive labour

itself” (Marx 1990:174-175).

My point in rehearsing Marx’ well-known critique of commodity fetishism is the

following: at least in some formalist sense, both finance capital and other informal transactions

that assume capital and money, respectively, as central to their endeavors, dissolve M-C-M’ into

M-M’. It is particularly striking then that in two entirely distinct sectors of the economy—the

one financial and hence “formal,” the other “informal,” for want of a better term—wage work

has become more or less dissolute. In the one instance fewer and fewer actual workers are

required to drive the culture of circulation, while structural unemployment has given rise to an

ever-expanding informal sector, as manifest expression of systemic redundancy. But is this

really a crisis or something more permanent? As Janet Roitman has recently observed, by

common acknowledgement (in both banking circles and amongst neo-Marxists), systemic risk is

built into the market system (Roitman 2014:72-73) belying discourses of redundancy as “crisis,”

which tend to mask the very mechanisms by which superfluous populations are necessarily

produced (see Arendt 1994; Mbembe 2004).

Edith and Unathi have not been alone in waxing nostalgic about the days when their

husbands had full-time wage-paying jobs. The new post-apartheid state has been equally

invested in the notion of the “worker-citizen” (Barchiesi 2011)—a powerful, if anachronistic,

symbol now deployed to define the new democratic citizenship. The re-emergence of the trope

is particularly notable given the job losses that have come with the political transition and stands

in stark contrast to the rapid growth path advocated by neoliberal ideologues.

So admitting then that the idea of the laboring subject is something of an anachronism,

contingent on an older theory of labor once realized through travel to urban areas from the

countryside and through access to wage work, what purchase do such reveries have on the

present? This yearning for apartheid wage work presumably stripped of repressive politics—a

desire for “sweat” as a precondition of material security—in my view is also linked to an

increasing debt burden in most households (see for example Lazzarato 2011).26 Further, debt

and indebtedness while substantially increasing much as they have elsewhere (see Makhulu,

Buggenhagen, and Jackson 2010), not least in the United States, begins to gesture at other kinds

of de-substantiation such as the concrete world of material objects, including homes—as the

bricks and mortar basis of fundamental security and as its metaphorical foundation too.

Finally, I want to highlight the contrast in the popular imaginary of a difficult near past of

work and oppression and a present in which “freedom” has come, but cannot be practically

enjoyed. In such a case, what are the alternatives by which freedom—in both a political and

material sense—might be achieved? For residents of Lower Crossroads, and similar townships

and squatter areas across the Flats, the options come in a variety of forms, but one at least has

both fascinated and perplexed me: the quest for a kind of financial autonomy by means

seemingly both arcane and incredibly practical. The financial markets, as we know, continually

seek new alternatives to instruments and sectors that no longer generate the kinds of profits they

26 Here, “debt” covers a whole range of brokerage relations including store credit, credit card debt, informal loans,

even loan sharking, in other words, monies owed in both formal and informal sectors.

16

did. To be sure, what Adam Smith called “prodigals and projectors” (1977) those players in the

market who were likely to promote risky speculation, the likes of which were instrumental in the

collapse of the credit markets in September 2008, are a far cry from the “errors of undue

optimism” (Pigou 1929), if they are indeed that, in which South Africa’s working poor engage

today. Still, I believe the comparison is worthwhile.

The Mjwana Family27

The Mjwanas, like Edith and her family, resided in Lower Crossroads. In 2006, Nomalady

Mjwana belonged to a large savings scheme forty members strong. The scheme was based in

Old Crossroads (just as Edith’s had been fifteen years before) and had been in operation since the

late 1980s, when it convened in “Section 5,” Boystown, named for a boy’s reformatory that was

located there when the area was still partially given over to farming. The group, Masibonisane,

“Let’s Help Each Other Advance,” met weekly at Sikilela Primary School. While contributions

were made throughout the year, the group generally recessed during January when people were

on holiday in the Eastern Cape. Again, the notion of “holiday” is somewhat misplaced in the

sense of bourgeois leisure time. Rather the December period was clearly an opportunity to

accomplish the hard work of social reproduction. And umgalelos are an engine of this process,

enabling young boys’ initiation into adulthood, the construction of rural homesteads, investment

in children’s education through school fee payment, and the purchase of books, and uniforms.

Weekly contributions of R10 were significantly smaller than those made in other savings

groups. These smaller amounts were made more frequently consistent with the limited staple

income flowing into the household—including child support grants—as well as the timing of

earnings from Nomalady’s husband’s casual gardening job and a small food stand at which she

worked a few days a week. As a consequence, Nomalady contributed R30 a week and made

additional payments on behalf of several of her children: Bongiwe, Phumlani, Phelokazi, and

Nasiphi. The incentive to contribute on her children’s behalf (a practice in which many women

engaged) encouraged saving that would have otherwise been quite difficult. Ideally, Nomalady’s

contributions totaled R150 per week, while she also paid a R2 “transport contribution.”

“Transport money” covered the costs of cosignatories and other members who took it in turns to

travel into central Cape Town to the bank to make deposits into a fixed account. Annual

contributions were registered in two separate ledgers, maintained by two members specially

appointed to the task, and spoke volumes of efforts at transparency, offering an entirely new take

on the idea of double-entry bookkeeping and “fair value” accounting. The ledgers reflected

identical transactions: contributions, deposits, and in some cases money owed, as well as

additional transactions or mashonisa (loan sharking). A third ledger only recorded “transport

money” entries.

The Masibonisane constitution stipulated that contributions were made regularly, that

meetings were attended, and began punctually, and when absent that members sent on a formal

apology delivered by another member. These binding rules encouraged regularity of

contributions and the overall stability of the group. Again, self-discipline, moral rectitude, and

self-imposed fiscal restraint characterized the ideal subject who could be a member of such a

scheme.

27 Nomalady was 48 when I first knew her. Her husband was ten years her senior and had been forced to enter semi-

retirement. They had three daughters and one son ranging in age from 10-25.

17

Nomalady ran a sweet stand on one of the major thoroughfares feeding off the R300

motorway and across the road from a local wholesale supermarket. She worked there every

other day, usually Monday, Wednesday, Friday and the weekend. Most days, depending on

business, she made anywhere from R50 to R70 in profits;28 she sold sweets, crisps, yoghurt, and

occasionally fruit. The R200-R350 she made each week rarely covered her target weekly

contribution of R152. When she was unable to make the whole contribution in one go she found

ways to catch up by the end of the month. Strategies included participating in so-called gooi-

gooi (or unstable, in-and-out) schemes where money could be rapidly recuperated. A second

strategy involved acting as a loan shark. Members of the scheme who either needed additional

funds or wished to make extra money would lend to other, poorer neighbors, and friends. And

Nomalady had been known to lend at very high interest rates seeing in the high risk of default the

potential for maximizing profits by charging upward of 50 percent interest on loans, which, if

recuperated yielded further profits through interest earnings from the bank. Alternatively,

members could also borrow from the scheme itself, that is, once at least R400 worth of

contributions had been made for the year. Evidently, Nomalady and others believed that risk

would be generally offset by informal modes of securitization—one form of contribution might

be offset by contributions made elsewhere or by the practice of lending to others.

At the end of any given year the three co-signatories presented the scheme’s ledgers to

the bank and withdrew funds for all its members, leaving a small amount on deposit for purposes

of keeping the account open. Nomalady withdrew close to R7600 at the end of 2005; this money

was used to transport family members to the Transkei for the December period, for the slaughter

of a cow for a family celebration, the re-fencing of the homestead, groceries, school fees, and

uniforms for the following year, the initiation of a young man in the extended family, and finally

the re-painting of the family’s shack in Lower Crossroads. Again, the project of making home—

in both its narrowest and broadest sense—was central to Nomalady’s daily reckonings.

Other resources in the Mjwana household included income from Pius’ casual gardening

work. He was 58, pre-retirement age, and worked fairly irregularly in and around Cape Town.

In addition, one of the younger children continued to receive a child support grant of R180 a

month.29 It was undeniable that the apparatus of social assistance was becoming absolutely

essential as South Africans witnessed dramatic declines in real income—on average 40 percent

from 1995-2000.30 Through it all the Mfeketos and Mjwanas persisted in the hard work of

reckoning daily the conditions for life—engaging in “money struggles” (Guyer, Denzer, and

Agbaje 2002)—perpetuating cycles of domestic reproduction that black Capetonians had long

ago set in motion, even as they were forced to negotiate the disruptions and violence of

migrancy, influx controls, and dispossession under apartheid.

Conclusion

While South Africa’s transition from minority to majority rule has been popularly held up as an

extraordinary feat, in practice, the enjoyment of democracy’s benefits have been limited to a

28 Fluctuations in daily takings are related to the times in the month when pensioners receive their social grants (at

the time of my interviews this was R800 per month) and mothers with dependents collect child grants (these were

approximately R180 per child at the time). 29 Since the completion of research interviews in 2006 both child grants and pensions have been significantly

increased—to R250 a month for children (extended to the age of 18) and R1,080 a month for pensioners. 30 See “Why South African Incomes Declined,” Andrew Balls, http://www.nber.org/digest/jan06/w11384.html,

accessed December 13, 2013. Also see the National Bureau of Economic Research Working Paper No. 11384.

18

small minority. What Tom Holt in describing the emancipation of Jamaica in 1838 suggested

was a “‘freedom’ drained of the power of genuine self-determination” (1992:xxv). True, today,

ordinary South Africans make all manner of claims on the state and the majority enjoy rights of

full citizenship for the first time now the old Bantustans and labor reserves have been dismantled

and legalized racial discrimination has been struck from the statute books. And yet, not

insignificant numbers of South Africans remain under threat of eviction; live in communities

with limited access to state resources; in areas of the country where jobs are scarce, and schools,

and primary healthcare practically inaccessible. These are certainly problems of longstanding

that no government could possibly secret away in the space of two decades.

At the grassroots people have responded by organizing against the privatization of basic

needs, stressing instead the decommodification of access to water, electricity, housing, and other

benefits and services. In turn, the state’s rejoinder has been less than predictable, further

evidence of the confusing and complex continuities between state and capital. It would seem

that neoliberalism “works by multiplying sites for regulation and domination through the

creation of autonomous entities of government that are not part of the formal state apparatus and

are guided by enterprise logic” (Sharma and Gupta 2006:277). If sites for regulation and

domination have indeed multiplied, sites of protest politics have multiplied too.31

Of course constitutional democracies privilege the rule of law, often ignoring the vast gap

between formal and substantive citizenship. Further, many new democracies must come to terms

with recent histories of colonial overrule that necessarily bring into question the very

foundational assumptions of the “procedural republics” (Sandel 1984) they seek to conjure—

namely the degree to which jurisprudence can actually serve the cause of justice. The wide rift

between form and content is therefore perhaps most visible in post-revolutionary societies. Yet

hyper-conscious of the discrepancy in definitions of citizenship, communities of protest across

South Africa have been quick to take up rights talk precisely in order to make demands on the

state and thereby demonstrating a dexterity of political strategy. While this may be a cause for

some optimism, it is equally clear that socio-economic rights have become “the main terrain of

struggle”32 between the state and civil society and as such signal an ever-widening ideological

gulf between the presumed values of political emancipation and market freedoms.

And so the reckoning continues.

In a way, this paper has been a meditation on the problem of “reckoning” after apartheid.

By this I mean several things: accounting materially and morally for a past that was profoundly

unjust; reckoning too in the sense of accounting, day by day, for the ways in which the present

can be lived; pragmatically assessing possibilities for making home in the city of Cape Town

(other cities too) and in so doing reproducing life itself. Each of these modes of reckoning

suggests a kind of bookkeeping. And as we have seen this is precisely what people do: they

calculate the probability of “marginal gains” in contexts of want and extreme inequality (Guyer

2004). And so a vast number of Capetonians organize their lives, homes, and settlements

through minute calculation of the costs—material and moral—of risking life on the periphery as

the condition of a precarious hope (cf. Allison 2013; Standing 2011).

31 See “Frustration Boils Over in Protests: Community Angered at Snail Pace Service Delivery,” Bheko Madlala,

Daily News (Durban), October 14, 2005; “66 Cops Injured in Illegal Service Delivery Protests,” Cape Argus,

October 13, 2005; “The Story of State Repression in the South African Transition,” Dale T. McKinley and Ahmed

Veriava, Pambazuka News, May 13, 2004; Centre for Civil Society Research Reports 2006. 32 See http://www.fxi.org.za/pages/Anti-censorship/Progress%20Reports/ACP_6th%20Progress%20Report.html,

accessed March 16, 2013. FXI notes that the Minister of Safety and Security, Charles Nqakula, reported 5,085 legal

and 881 illegal protests in South Africa in the 2004-2005 financial year.

19

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