The Minerals Energy Complex in South Africa: an Empirical Debunking

A hugely influential framework in South African political economy holds that the country has been dominated for the better part of a century by a Minerals Energy Complex (MEC) comprising powerful firms and state agencies involved in mining and a range of downstream industries. The MEC is said to act as a 'system of accumulation' determining patterns of accumulation across the economy. This paper argues that MEC theories rest on hollow empirical foundations. It shows, firstly, that the apparent size, stability and integration of MEC sectors in national accounting data are a statistical artifact of the overly expansive and ad hoc way in which the MEC has been defined. Secondly, it shows that the political-institutional conditions for an MEC system of accumulation no longer exist, if they ever did. Conglomerates related to MEC sectors once possessed the ability to shape economy-wide accumulation dynamics but it's unclear if their interests were ever geared towards the self-reproduction of core sectors at the expense of diversification. With liberalization those capacities were dismantled. MEC firms never regained their position at the top of the corporate hierarchy and in fact there is no clear evidence of them even acting as coherent fraction of capital. Far from favoring the MEC, the post-Apartheid state meekly pursued diversification but was stymied in this by it's own lack of capacity. This left commodity dependence intact -- not as a result of the MEC, but of state enfeeblement induced first by neoliberalism and then by state capture. The paper closes by showing how assumptions of corporate hegemony -- latently embedded in MEC theories -- leave us unable to explain major trends in South African political economy like state capture.