AFRICAN AND SOUTH AFRICAN ECONOMIC HISTORYIPSU • 2011Johan Fourie

GEOGRAPHY AND LUCKIPSU • 2011Johan Fourie

Die origin of man Anatomically modern humans migrated out of

Africa between 100 000 and 50 000 years ago – the so-called “Out of Africa” hypothesis There were already groups of proto-humans (that

moved out of Africa about 2.5 million years ago, Homo Erectus) in the rest of the wolrd (like the Neanderthals in Europe), but they were probably completely replaced by Homo Sapiens

All people are thus biologically almost identical – biology is thus not the reason why some are rich and others poor

Out of Africa

Source: Wikipedia 2011

Hunters For 99% of our history, we were hunter-

gatherers Nomadic lifestyle Exploit natural resources with limited

impact on the environment; simple technology; low population density

Until about 10000 BCE…

Guns, germs and steel History followed

different routes because of geographical differences, not biological

Ultimate causes: animal and plant domestication and the geography of continents

The origin of agriculture

Source: Wikipedia 2011

Die first settlers The agricultural revolution occurred

because of dramatic changes in the environment (climate)

Some plants and animals were domesticated (as apposed to ‘tame’)

People were thus not forced to search for food, but could settle close to a permanent supply of energy

They were thus the first settlers

Domestication

Plants and animals

The Neolithic Revolution Agriculture » settled homes » higher

population density » surplus production » specialisation

Specialisation » soldiers, artists, magicians… and kings

Surplus » something to steal NR results in economic development (in

the long-run) but also inequality

The consequences of the NR The equality of the hunter-gatherer

disappeared Aside from the new threat to security,

the new towns required a new way of social organising – a gap between those that work and those that manage

In short: hierarchies of wealth, status and power are characteristic of the new societies

The consequences of the NR In the early agricultural villages of

10,000 years ago, the seeds of our own way of life were sown: economic specialization, the possibility of private as opposed to or complementary to communal life; the opportunity to accumulate wealth in material objects; the opportunity to accumulate new techniques and tools and knowledge

Development in the long-run

Societies adapt to changing environments Some adapt better than

others (Jared Diamond) After the fall of the Roman

empire in 476 CE, Europe in turmoil

Progress in the East Especially in China, 700 CE –

1400 CE

Questions from the session? Answer a 12 year-old African kid in

Zambia, who asks you why white people are rich and black people poor.

Some societies adapt better to changing environments. What lessons can we learn from these trends for the future?

AFRICAIPSU • 2011Johan Fourie

Africa How well do you know your continent?

How many countries How many people

Jared Diamond: How Africa Became Black

Africa: Where did it all begin? Cradle of mankind – South Africa, Kenya? First wave moving out of Africa Second wave replacing first wave Within Africa, the diversity was/is

immense

What we do know Five major human groups

Blacks, whites, African Pygmies, Khoisan and Asians

Of course, unlike European history, Africa has little written history

Use of language can tell us much about Africa’s past

The migration of the Banto The Niger-Congo language family is

distributed all over West Africa and most of subequatorial Africa

How do we know where it started? English example Same line of reasoning suggests a

significant migration of the Banto from Cameroon to the south

The Bantu migration Since 1500 BCE Bantu

settlers migrated east and south from modern day Cameroon and Nigeria

Better technology compared to existing inhabitants (Khoi and San)

Conflict or amalgamation?

Why? What was the Banto’s advantage?

All of the domesticated plants in Africa stem from north of the equator – coffee, yams, sorghum, oil palm and kola nut

Sole animal that was domesticated is the guinea fowl – all others came from Middle East/Asia through trade

Khoisan and Pygmies was thus at disadvantage

The Bantu migration By 300 CE they reach South Africa,

spread over the entire country (except the Western- and Northern Cape) Why not there?

Farmers but also cattle herders, especially in the dryer parts

Metal working possible – bronze tools – better technology than the Khoisan (who used stone tools)

Great Zimbabwe and Monomotapa

Great Zimbabwe 1100-1450 CE Monomotapa (1430-1760)

Pre-European civilizations

Mfecane Mass migration of tribes in the North,

East and Central South Africa As a consequence of Shaka’s wars, who

build the Zulu’s into a powerful tribe through military, social, cultural and political reforms Reduce the power of witchdoctors The iklwa – a spear, ‘bullhorn’-technique

Europeans in Africa Shaka’s success – and the change that it

brought – meant that large parts of the country were left vacant

Into this ‘emptiness’ after the Mfecane, a group of settlers arrived in the 1830s, claiming the land for themselves The Great Trek

But first, where did these settlers come from?

SLAVERY IN AFRICAIPSU • 2011Johan Fourie

Ethnic diversity

Hard facts Four trade routes

Trans-Atlantic Indian Ocean Trans-Saharan Red Sea

Correlation

Instrument

Regression Two regressions First explains the

instrument Second uses

instrument to test hypothesis

The stars indicate significance

Thus: causality proved!

Conclusions?

INSTITUTIONSIPSU • 2011Johan Fourie

AJR African underdevelopment is due to

historical institutions But how to measure historical

institutions? Instrumental variable – settler mortality!

Mortality Settler mortality

determined the type of institutions that were imposed by the European settlers

These institutions would later result in lower growth

COLONISATIONIPSU • 2011Johan Fourie

Diverse experiences Case study: Congo

10 million murdered or more from 1885 to 1908 when Belgium took it over as a colony.

has been virtually ignored in books on genocide. Yet, this genocide far surpassed in human corpses most every

gemocide in the 20th Century except that by Stalin, Mao, and Hitler.

But…

Jomo Kenyatta We do not forget the assistance and

guidance we have received through the years from people of British stock: administrators, businessmen, farmers, missionaries and many others. Our law, our system of government and many other aspects of our daily lives are founded on British principles and justice

Discussion questions Its clear that atrocities have been

committed in Africa in the name of development

If any, what were the benefits from colonisation?

If you could retell history, how would you change the European “invasion” of Africa?

SETTLERS IN SOUTH AFRICAIPSU • 2011Johan Fourie

Die VOC 1602-1800 Goal: to undertake

trade voyages to the East Spices

4785 ships, nearly one million employees

An extremely brief overview of my PhD

The nature of wealth Size, growth and structure of wealth in the CC

Material culture and standards of living Specialisation and diversification of production

A measure of income (GDP) The causes of wealth

Supply: French Huguenots Demand: Ships

The distribution of wealth Wealth inequality Income inequality

45

The Cape Colony Brief history of

settlement European settlement in

1652 by VOC First 9 Company officials

released to become independent farmers in 1657

In 1688, roughly 150 French settlers (Huguenots) arrive

After 1700, immigration discouraged

Slow expansion until 795 British rule

46

The Cape Colony Characteristics of Cape economy

Three views Earlier historians (De Kiewiet, De Kock, Theal): “Cape

was an economic and social backwater” Recent historians (Guelke, Giliomee, Shell, Feinstein):

Cape was poor, but with pockets of wealth Economists (Van Duin and Ross, Brunt): Cape was

growing faster than previously thought based on quantitative evidence – though their evidence doesn’t support their case

Cape was based on slave labour (1658) Three groups: Officials and wealthy elite farmers,

middle-income farmers and traders in Cape Town, poor, mostly frontier farmers

VOC institutions/policies: monopsonist buying, prohibition on trade and manufacture

47

Institutions and colonial societies ‘Institutions’ matter

Capital accumulation, quantity and quality of labour and innovation and technology are merely the embodiments, or proximate causes, of growth and are themselves influenced by institutions

Colonial societies are the setting for three important contributions: Acemoglu, Johnson and Robinson (2001,2002) Engerman and Sokoloff (2000, 2002, 2005) La Porta, Lopez de Silanes and Shleifer (2008)

48

Institutions and colonial societies

What institutions? Extractive versus settler (AJR) Tropical versus temperate (ES) Legal origin (LLS)

First two theories assume settlers are homogenous LLS – only difference is legal origin

Surely settlers are not all similar? Modern trade theory and literature on

migration Can we show this using evidence from

the Dutch Cape Colony?

49

Research question We compare wine and wheat production of the

Huguenots and the other settlers If different, skills acquired in their country of origin may

explain these differences But maybe it’s not skills. Maybe it’s because they received more

land? Or capital or labour? Or technology? Maybe it’s language, or legal origin, or simply, French institutions Or maybe it’s other forms of human capital (literacy)

We then split the sample into French from wine-producing regions and French from non-wine producing regions I.e. thus removing all claims of institutional, religious and

cultural differences

50

Data and MethodologyOpgaafrolle and dummies

51

Data Opgaafrolle of the VOC

spanning 1663 to 1773 Roughly first century of Dutch settlement

Tax records Information on assets rather than

consumption and income Wealth and income inequality (Fourie and Von

Fintel 2010a, 2010b)

52

Data Agricultural indicators

Tithe on grains which was often evaded Rather: “inventory” captured grain sown (ST assets)

Wine production taxed upon entry into Cape Town Vines represent a more long-term asset

Sheep and cattle ownership Horses

Transport Carriages a display of wealth by gentry

Pigs Unevenly distributed and low prevalence

53

Data Non-agricultural indicators

Large sample of individuals with zeroes on all agricultural indicators

Few variables that capture other commercial interests So non-farmers appear to flesh out a large bottom tail of

the wealth distribution Land – no information Slaves

Vital input into the production process Status symbol

Weapons Sporadic measurement and evidence of inferior products

54

55

RESULTS androbustness checksDescriptives and regression analysis

57

Descriptive results

58

Group N HH SlavesKnech

ts Vines Wine

Wheat Reape

d CattleHorse

sNH 6848 M 3.57 5.04 0.15 3.80 2.28 22.98 35.55 5.80 SD 2.86 8.46 0.77 11.54 7.64 64.22 65.07 10.08NWH 1038 M 3.62 3.73 0.06 3.65 2.26 20.01 31.78 4.42 SD 2.82 6.28 0.29 8.81 6.55 55.14 44.15 6.69WH 1192 M 4.05 4.03 0.08 6.88 4.83 15.58 31.01 4.54 SD 3.16 6.70 0.36 12.87 10.92 41.05 40.86 6.81Total 9078 M 3.64 4.76 0.13 4.19 2.61 21.67 34.52 5.48 SD 2.90 8.04 0.69 11.49 8.08 60.71 60.32 9.39

Wine (leaguers) Wheat Reaped (muids)NH NWH WH NH NWH WH

1700 1.16 1.18 1.40 4.32 2.65 3.691709 0.98 0.55 0.83 17.45 7.30 8.141719 0.80 0.44 0.98 9.45 5.93 3.761731 0.75 0.55 1.13 8.68 6.65 5.461741 0.33 0.25 0.67 10.55 11.76 8.331752 0.49 0.54 1.18 4.72 3.54 4.201757 0.61 0.82 1.23 3.36 1.64 1.531773 0.63 0.93 1.89 3.73 5.51 2.82

TABLE 1: Average household ownership per type of asset, farmer sample

Note

s: N

= o

bser

vatio

ns,

HH =

hou

seho

ld s

ize, M

=

mea

n,

SD

= st

anda

rd

devi

atio

n.

Only

fa

rmin

g ho

useh

olds

are

inclu

ded

in

the

sam

ple.

TABLE 2: Mean household per capita production levels, by population groups over time

Note

s: N

= o

bser

vatio

ns,

HH

= ho

useh

old

size,

M =

mea

n,

SD =

stan

dard

dev

iatio

n. O

nly

farm

ing

hous

ehol

ds

are

inclu

ded

in th

e sa

mpl

e.

Mean household per capita output of wine, 1700 - 1773

59

Descriptive results60

0.2

.4.6

.81

FGT(

z, a

lpha

= 0

)

0 8 16 24 32 40Poverty line (z)

Non-Hugenot Non-Wine Producing Hugenot Wine Producing Hugenot

FGT Curves (alpha=0)

Figure 1: Cumulative Density Functions of Wine Production by group - 1773

Results IDependent Variable: log(Wine per household member produced) (in leaguers), full farmer sample, OLS

(1) (2) (3) (4) (5) (6) (7)NWH 0.191 0.482*** 0.510*** -0.128 -0.081 -0.343*** -0.516***WH 1.721*** 1.917*** 1.793*** 0.899*** 1.030*** 0.764*** 0.653***Slaves 0.168*** 0.166*** 0.044*** 0.068*** 0.068*** 0.067***Slaves*NWH -0.011 -0.022 -0.016 -0.009Slaves*WH 0.014 -0.074*** -0.073*** -0.066***Knechts 0.416** 0.369** 0.008 0.096 0.093 0.106Knechts*NWH 1.468 -0.894 -0.84 -0.842Knechts*WH 2.218* 1.877** 2.004** 1.914**Vines 0.132*** 0.120*** 0.120*** 0.121***Vines*NWH 0.112*** 0.117*** 0.117*** 0.114***Vines*WH 0.03 0.048** 0.048** 0.047**Cattle -0.001 -0.003* -0.003* -0.002Wheat reaped 0.011*** 0.010*** 0.010*** 0.010***Horses 0.01 0.018 0.018 0.017Stellenbosch 1.419*** 1.403*** 1.399***Drakenstein 0.781*** 0.726*** 0.693***Swellendam 0.125 0.095 0.067Married to NWH 0.369*** 0.380***Married to WH 0.368*** 0.421***Born abroad 0.687***Coertzen -0.22Year dummies Yes Yes Yes Yes Yes Yes YesConstant -2.420*** -3.115*** -3.095*** -3.531*** -4.213*** -4.223*** -4.294***R-squared 0.104 0.296 0.297 0.542 0.564 0.565 0.566N 9078 9078 9078 9078 9078 9078 9078F statistic 48.121 148.702 129.223 134.253 217.507 204.4 197.634 NO

TES:

NW

H =

Hugu

enot

s fro

m n

on-w

ine

prod

ucin

g re

gion

s. W

H =

Hugu

enot

s fro

m w

ine-

prod

ucin

g re

gion

s. Ba

se c

ateg

ory:

non

-Hug

ueno

ts

and

the

year

170

0. W

heat

reap

ed is

mea

sure

d in

mui

den,

Vin

es in

nu

mbe

r of t

hous

ands

. Con

verte

d to

hou

seho

ld p

er c

apita

leve

ls.

Estim

ates

are

wei

ghte

d by

hou

seho

ld si

ze a

nd si

gnifi

canc

e le

vels

are

base

d on

the

use

of ro

bust

stan

dard

erro

rs..

*** d

enot

es si

gnifi

canc

e at

th

e 1%

sign

ifica

nce

leve

l, **

at 5

% a

nd *

at 1

0%.

Results II

(1) (2) (3) (4) (5) (6) (7)WH 1.509*** 1.430*** 1.286*** 0.998*** 1.003*** 1.029*** 1.140***Slaves 0.172*** 0.156*** 0.046*** 0.052*** 0.049*** 0.029Slaves*WH 0.025 -0.047** -0.053** -0.050** -0.034Knechts 2.148** 1.784 -0.541 -0.518 -0.357 2.651***Knechts*WH 0.785 2.490 2.559 2.292 -0.977Vines 0.236*** 0.237*** 0.235*** 0.257***Vines*WH -0.066* -0.068** -0.066** -0.088Cattle -0.001 -0.001 -0.001 -0.003Wheat reaped 0.011** 0.012** 0.013** 0.013*Horses 0.002 0.000 0.004 0.045Stellenbosch 1.076*** 0.982*** 0.923*** 0.852*Drakenstein 1.264*** 1.158*** 1.036*** 0.962***Swellendam 0.294 0.240 0.101 0.158Married to NWH 0.426*** 0.412** 0.33Married to WH 0.380** 0.419*** 0.285Born abroad 1.019*** 0.788***Coertzen -0.148 -0.158Non-numeracy 0.003Year dummies Yes Yes Yes Yes Yes Yes YesConstant -1.977*** -2.119*** -2.038*** -4.397*** -4.634*** -5.270*** -5.376***R-squared 0.092 0.212 0.213 0.602 0.604 0.611 0.596N 2230 2230 2230 2230 2230 2230 1675F statistic 16.349 26.165 23.828 95.992 90.772 91.677 70.06

NOTE

S: W

H =

Hugu

enot

s fro

m w

ine-

prod

ucin

g re

gion

s. Ba

se

cate

gory

: Non

-Win

e Hu

guen

ots a

nd th

e ye

ar 1

700.

Whe

at re

aped

is

mea

sure

d in

mui

den,

Vin

es in

num

ber o

f tho

usan

ds. C

onve

rted

to h

ouse

hold

per

cap

ita le

vels.

Est

imat

es a

re w

eigh

ted

by

hous

ehol

d siz

e an

d sig

nific

ance

leve

ls ar

e ba

sed

on th

e us

e of

ro

bust

stan

dard

erro

rs..

*** d

enot

es si

gnifi

canc

e at

the

1%

signi

fican

ce le

vel,

** a

t 5%

and

* at

10%

.

Dependent Variable: log(Wine per household member produced) (in leaguers), full Huguenot sample, OLS

Results III(1) (2) (3) (4) (5) (6)

NWH 0.26 0.249 0.100 -0.006 -0.097 -0.219WH 0.563*** 0.946*** 0.566*** 0.242 0.084 -0.028Slaves 0.198*** -0.002 0.01 0.01 0.009Slaves*NWH 0.060* -0.019 -0.019 -0.012Slaves*WH -0.04 0.012 0.011 0.016Knechts -0.096 -0.343 -0.242 -0.241 -0.229Knechts*NWH 2.379* 0.212 0.287 0.277Knechts*WH 2.836* 1.781* 1.918* 1.831*Wheat sown 0.317*** 0.312*** 0.311*** 0.312***Wheat sown*NWH 0.145*** 0.154*** 0.155*** 0.149***Wheat sown*WH 0.06 0.048 0.046 0.041Cattle -0.002 -0.003 -0.003 -0.003Wine 0.045** 0.007 0.006 0.006Horses 0.126*** 0.141*** 0.141*** 0.141***Stellenbosch 0.978*** 0.972*** 0.966***Drakenstein 0.975*** 0.981*** 0.952***Swellendam -0.371*** -0.372*** -0.392***Married to NWH -0.146 -0.142Married to WH 0.291 0.285Born abroad 0.572**Coertzen 0.06Year dummies Yes Yes Yes Yes Yes YesConstant -2.296*** -3.059*** -3.377*** -3.919*** -3.908*** -3.969***R-squared 0.124 0.278 0.545 0.558 0.558 0.559N 9078 9078 9078 9078 9078 9078F statistic 58.898 111.596 139.109 297.805 277.66 262.055 NOTE

S: N

WH

= Hu

guen

ots f

rom

non

-win

e pr

oduc

ing

regi

ons.

WH

= Hu

guen

ots f

rom

win

e-pr

oduc

ing

regi

ons.

Base

cat

egor

y: n

on-

Hugu

enot

s and

the

year

170

0. W

heat

sown

is m

easu

red

in m

uide

n,

Win

e in

num

ber o

f lea

ugue

rs p

rodu

ced.

Whe

at re

aped

is c

onve

rted

to h

ouse

hold

per

cap

ita le

vels.

Est

imat

es a

re w

eigh

ted

by h

ouse

hold

siz

e an

d sig

nific

ance

leve

ls ar

e ba

sed

on th

e us

e of

robu

st st

anda

rd

erro

rs..

*** d

enot

es si

gnifi

canc

e at

the

1% si

gnifi

canc

e le

vel,

** a

t 5%

and

* at

10%

.

Dependent Variable: log(Wheat produced) (in muiden) full sample, OLS

Interpretations and conclusionsSettler skills and colonial development

64

Location?

65Approximate location of 37 Huguenot

families in the Drakenstein/Franschhoek area

Digital imprint, Map division: South African Library, Cape Town,

2008.

• “This valley is on account of its extraordinary fertility the best portion of the Cape. It was unusually well cultivated through the diligence and untiring industry of the first French colonists and has been maintained in this state by their successors. The fertility of this little district can be imagined from the fact that the first colonists arrived there destitute of all means, and like all others had to borrow from the Company their cattle, farm implements, seed and bread-corn and everything else they needed; yet were the first to repay their debt amounting to many thousands of gulden.”

– O.F. Mentzel

• Seems to be productivity rather than natural fertility

Controls Land

Region dummies Capital

Slaves, wheat reaped, horses Labour

Knechts, household size Married to WH***, married to NWH*** Born abroad*** Coertzen’s dummy (seven farming families) Non-numeracy (only within FH, smaller sample) Time dummies***

66

Skills We argue that it was because the Huguenots brought specific

skills from France, skills that gave them an advantage in making wine There was always a market for the best wines in Cape Town; ships

needed wine that lasted their entire voyage, i.e. quality wine “It must be understood that not all Cape wines are suitable for

maturing. What is not good wine by nature and quality (or, as I think, has not been properly prepared) is not improved by long seasoning, but only becomes sharp and prickly as they say there. Really good, well prepared and well cellared Cape wines improve with age.” OFM

WH produced higher quality wines, i.e. wines that would last longer These skills they protected, either

deliberately – “Many colonists at the Cape do indeed know the secret of preparing good wine, but they are not such fools as to give away their secrets” – OFM

or accidentally due to the high costs of transfer – years of learning-by-doing

Importantly: a handful of farmers at the top of the distribution drive results, protecting their skills in wine (but not wheat) production

67

Interpretations More broadly, the results also suggest:

A re-evaluation of the idea that settler groups are homogenous I.e. that it is only the conditions in the settler

economy that determine their “success” Settlers’ skills may shape the “production

function” of the new settlement A rethinking of the Engerman-Sokoloff

hypothesis; with implications for long-run inequality

68

SA ECONOMIC HISTORYIPSU • 2011Johan Fourie

Mfecane Period of tribal warfare (before the

collision with whites) Stronger coastal tribes (including the Zulu

and Xhosa) shifted the relatively stable balance of power in the region – forced coalitions or war

By the turn of the century (1800), the Mfecane had started, of continuous warfare between tribes

Many areas of the country was left deserted as clans fled or were killed

Shaka Zulu Using new techniques

(the bull-head technique) his reign united the tribes of Natal

After his assasination in 1828 by his own brothers, he was followed by Dingane (which we meet again later)

1795 – 1806 Cape British protectorate (1795-1803) Batavian rule (1803-1806) British rule (1806) British colony in 1814

The eastern border Frontier farmers move to the east

checked by the Xhosa Frequent Xhosa-wars, small raids

between the farmers and the Xhosa, resulting in low human loss

Andries Stockenstrom

1820 British settlers Due to overpopulation in England and

rapid increases in poverty and the unemployment rate – British government decides to send settlers to SA to anglicanize and stabilise the frontier border

Many of these settlers not farmers – traders, craftsmen

1820 Settlers 80 000 applicants, 4000 arrived Settled in eastern Cape – Cradock,

Grahamstown Many moved to urban areas soon after

their arrival

“Die Groot Trek” The Great Trek – 1836 Who? Afrikaners Reasons:

Lack of land Security, continuous trouble with Xhosa Political marginalisation Oliver Shneider: they felt that they were

treated as second-class citizens

“Die Groot Trek” Logistics:

6000 people left by 1840 (about 10% of the white population in the Cape Colony)

By 1845, 15000 Afrikaners and 5000 servants had left

Traveling in groups with one leader: Hendrik Potgieter (Tarka), Gerrit Maritz (Graaff Reinet), Piet Uys (Uitenhage)

“Die Groot Trek” Extremely dangerous:

Battle of Vegkop: 35 trekkers vs. 6000 Ndebele warriors – only 2 trekkers were killed, but they lost all their cattle

Inter-Trekker rivalry Destination unknown: Potgieter wanted to

go to the North, Piet Retief to Natal

Piet Retief Typified as the

“hero” of the Afrikaners

Very little on his CV suggests hero status

He, and his party was killed by Dingane when trying to sign treaty in 1838

“Bloedrivier” The Trekkers (only called Voortrekkers

after 1880) were motivated by the fact that Zulu chief Dingane kaSenzangakhona had killed one of their leaders, Piet Retief, after negotiating a treaty with him. Dingane's impis had also attacked Voortrekker encampments, killing an estimated 500 women, children, and men, including servants, most notably at Blaukraans.

“Bloedrivier”

“Bloedrivier” After two hours and four waves of attack,

Pretorius ordered a group of horsemen to leave the encampment and engage the Zulu in order to disintegrate their formations. The Zulu withstood the charge for some time, but rapid losses led them to scatter

Cilliers noted later that " 'we left the Kafirs lying on the ground as thick almost as pumpkins upon the field that has borne a plentiful crop”

By the 1860s Large parts of South Africa had been

settled by white farmers – many of them very poor

Cape Town and areas close to it had developed rapidly since the establishment of British rule

But in 1867 something happened that would set the future of South Africa on a totally different course…

1867 - 1899 Diamonds (1867)

Kimberley founded Gold (1886)

Johannesburg founded Massive shift in economic power of

South Africa Severe political, cultural and social

consequences Results in Anglo-Boer War

Before the war 1894 – Glen Grey Act 1896 – Jameson Raid 1899 – Anglo-Boer War begins

After the war South Africa becomes Union in 1910 Free-market policy until 1924 Pact-government of Hertzog – more

government involvement Industrialisation Poor white problem Great depression Afrikaner nationalism Second World War

LESSONS FROM THE POOR WHITE PROBLEM FOR BLACK POVERTY TODAY

IPSU • 2011Johan Fourie

88

Overview

Introduction Depth and severity of the problem Causes of poverty Economic growth Solutions to poverty Two important lessons

More successful Less successful

Policy proposals Conclusions

89

Introduction

The “discovery” of poor whitism by the turn of the century

Major economic, political and social crisis by the 1930s

Due to various reasons, poor whitism largely eradicated in five decades

Black poverty is major economic, political and social problem

Again a number of policies have been implemented to address the problem

What can we learn from the poor white experience of the 1930s?

90

Depth and severity

Poor quantitative sources make comparisons difficult (Carnegie report does present us with some useable info)

Data about poor whites in Natal Result: Black poverty is today much larger and

more severe than white poverty of the 1930sClass 1(R3571)

Class 2(R7143)

Class 3(R10714)

White poverty (Carnegie 1932) 19.35% 60.22% 83.33%Black poverty (AMPS 2000) 59.32% 84.41% 94.74%

91

Causes of poverty

Many reasons for poor white problem Including poor education system Urbanisation The Anglo-Boer War Livestock losses Droughts Culture and language differences Government policy

Compare with reasons for black poverty today Poor education system Urbanisation Culture and language differences Government policy

92

Economic growth

93

Solutions

Various government policies to eradicate white poverty Includes an improved education system Higher social spending Industrialisation A repressive and discriminatory labour

system Government policies to eradicate black

poverty today Improving education and skills training High social spending Infrastructure and industry development A discriminatory labour system

94

Two important lessons

Most important factor that contributed to the eradication of white poverty before 1970 was the high economic growth rates achieved in SA

For the poor to participate in this higher economic growth, government policies was necessary

95

Successful government policies

Improvement in both the quantity and quality of education

Higher social transfers to the poor to ensure a basic living standard

Protection of property rights in cities for poor whites

A programme of industrialisation – such as the founding of ESCOM (1923) and ISCOR (1928)

96

Less successful government policies

The discriminatory labour legislation after 1924 that intended to protect white workers

This legislation, labeled “temporary discrimination by Verwoerd in 1934, did little to alleviate white poverty

97

Policy proposals for government today

Possible policy strategies to implement: Improve the quality of education (and the

institutional culture, maybe through cooperation from NGO’s or churches).

Provide property rights to the poor (on the land which they already live on, not land redistribution as practiced today)

Develop high-technology industries and economic infrastructure – such as investment in broadband and biodiesel

Relax labour laws

98

Concluding remarks

Where Afrikaner nationalists proclaimed 40 years after the poor white problem that the nation was cured by its own policies, it is not entirely true

Economic growth (and the potential to make use of that growth) is what saved the poor white

Similarly, BBEE (Broad-based Black Economic Empowerment) will not solve the massive black poverty problem

The government can only implement strategies to ensure that a large part of the poor population will benefit from higher economic growth

TWENTIETH CENTURYIPSU • 2011Johan Fourie

After the war South Africa becomes Union in 1910 Free-market policy until 1924 Pact-government of Hertzog – more

government involvement Industrialisation Poor white problem Great depression Afrikaner nationalism Second World War

1948 Election victory for Afrikaners – NP wins

parliament (with little more than 40% of the votes)

Little quirks of history – Smuts and Cambridge

DF Malan head NP – rapid changes follows

7 decades of economic performance

Policy of Apartheid Groups Act (1950) Bantu Education (1954) Homelands (1956) 1958 – Hendrik Verwoerd becomes prime

minister

1960s – Great Apartheid 1960 – Sharpeville, Winds of Change,

Referendum 1961 – Republic of South Africa 1963 – Rivonia trial 1966 – Hendrik Verwoerd assassinated

Rough and tumble decades

1972/73 – Oil crisis, first strikes (Durban)

1976 – Soweto uprising

1977 – Steve Biko dies in prison

Rough and tumble decades

1985 – Rubicon speech (PW Botha)

1990 – FW de Klerk releases Mandela

Instability before 1994 1990 – ANC unbanned 14 000 – 16 000 people die between

1990 and 1994, mostly in fightings between ANC and Inkatha members

Chris Hani assassinated (1993)

1994 first democratic elections