Economy of South Africa during apartheid

Prior to the arrival of European settlers in the 15th century the economy of what was to become South Africa was dominated by subsistence agriculture and hunting.

In the north, central and east of the country tribes of Bantu peoples occupied land on a communal basis under tribal chiefdoms. It was an overwhelmingly pastoral economy and wealth was measured in the number of cattle men held. Population growth had created a land pressure that had seen the tribes move steadily from the origins in central east Africa.

In the southern and western parts of the country, San (Bushmen) peoples led nomadic lives based on hunting and the Khoikhoi (Hottentots) peoples led a pastoral existence.

European settlement[edit]

In 1652 a permanent European settlement was established in Cape Town in the far south west of the country. It was not originally planned as a colony but as a refreshment station. Malnutrition, especially scurvy, a vitamin C deficiency arising from a lack of fresh fruit and vegetables, was a problem for the ships of the Dutch East India Company that were plying trade between the Netherlands and the Dutch East Indies, modern Indonesia.

However, the arrival of permanent European settlers triggered profound change. The Europeans decimated the San driving them to the Kalahari Desert region and virtually destroyed the Khoikhoi people as a struggle for land commenced. The Khoikhoi became farm workers and their identity merged with other groups.

Land hunger led to wars between the Bantu as the settlers migrated eastwards from the original settlement in Cape Town.

Immigrant skills[edit]

The Europeans meanwhile imported slaves from Malaya as artisans. Their skills have contributed to the clothing being a major industry in the Cape today. There were other waves of migration from Europe. Persecuted Huguenots from France turned their hands to wine production and Germans and British grew the nascent industrial base and developed modern farming methods.

The province of Natal, a British colony was found suitable for sugar production but the local Zulu tribes could not be attracted as cane cutters. Indentured labour was brought from India. The descendants of these labourers play an active role in commerce and industry today.

The European migrants diverged: the Continental Europeans merged to speak a Dutch-derived language, Afrikaans, and the English continued to speak English which became the language of commerce. This dichotomy was also seen in the economy, as farmers were mainly Afrikaans-speaking while English-speaking South Africans were drawn to commerce and industry.

Boer republics[edit]

The Afrikaners formed two independent inland republics, the Zuid Afrikaanse Republiek (ZAR) and the Oranje Vrystaat (Orange Free State). On the coast the British occupied the Cape Colony and Natal.

The discovery of diamonds in the Cape Province in 1866 the discovery of gold twenty years later on the Witwatersrand in the ZAR transformed the economy and attracted considerable foreign interest. The subsequent diamond and gold rushes saw further migrations of a range of nationalities including Cornish miners and eastern European Jews amongst others.

But perhaps the greatest impact was the influx of international capital to finance the mining operations, including the arrival of Cecil John Rhodes who formed the De Beers and Anglo-American.

Migrant labour[edit]

The indigenous people had little knowledge about the mining economy and this led to a shortage of labour on the mines. In a measure to force labour to the mines, Rhodes, who had turned from forming the De Beers Company to politics, secured the passing of the Glen Grey Act in 1894. The Act obliged the payment of tax with the specific aim of forcing peasant farmers, who were not part of the money economy, to find work that paid money to pay the taxes. The Act was a deliberate move by Rhodes to force labour to the mines.

This was the start of a migratory labour system in which black men travelled to the mines to work leaving their families in the tribal areas.

The supply of labour became more than sufficient and the mining companies formed a buying cartel through their association, the Chamber of Mines. This enabled them to create a monopsony (market conditions where there is only one buyer) that suppressed wages. The mines also attracted labour from neighbouring countries such as Rhodesia (now Zambia and Zimbabwe), Nyasaland (now Malawi) and Mozambique (that was then a Portuguese colony) that kept wages down.

Rand Rebellion[edit]

South African gold mines are deep and expensive to run and the mine companies endeavoured to keep costs down. However, in trying to train blacks for skilled jobs, they ran into conflict with white miners. Such was the resistance of the whites that it triggered a rebellion in 1922 in the area around the centre of gold mining: the Witwatersrand.

The Rand Rebellion was crushed with what was an early use of air power and some white miners were dispatched to the gallows. Those sentenced to hang were said to have gone to the gallows quoting Karl Marx and Friedrich Engels's Communist Manifesto, saying, "Workers of the world unite", but instead of adding "You have nothing to lose but your chains", the condemned miners added, "for a white South Africa".

Poor Whites[edit]

Among the white population there were many Afrikaner sharecroppers (tenant farmers who shared their crops with their landlord in lieu of rent). However, the onset of the Great Depression, combined with drought, led to the forced sale and consolidation of many of these farms, which itself led to the eviction of the residential sharecroppers. These subsequently unemployed whites flooded towns, competing with blacks for jobs in the mines.

Special attention was paid to this new influx of white poverty (as opposed to any changes in non-whites' statuses), and the Carnegie Corporation, founded by Scots-born, American philanthropist Andrew Carnegie, conducted a study into white poverty that was published as the Commission on the Poor White Problem in South Africa in 1932. It led to the alleviation of white poverty, but to some it was also seen as the foundation for the formalised system of racial discrimination against blacks that became known as apartheid.

Blacks had no vote and the whites used their political power to force the mining companies to protect skilled jobs for whites.

Labour-Afrikaner Nationalist Unity[edit]

From the late 1920s, whites elected governments that united white labour and Afrikaner Nationalism that used sanctions such as denying government contracts, against businesses that did not employ people who spoke Afrikaans. Nationalised industries were established, like steel and the railways, which reserved even low skilled jobs for whites.