african and south african economic history ipsu 2011 johan fourie
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AFRICAN AND SOUTH AFRICAN ECONOMIC HISTORY
IPSU • 2011Johan Fourie
GEOGRAPHY AND LUCK
IPSU • 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?
AFRICA
IPSU • 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 AFRICA
IPSU • 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?
INSTITUTIONS
IPSU • 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
COLONISATION
IPSU • 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 AFRICA
IPSU • 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 Methodology
Opgaafrolle 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 checks
Descriptives 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
=
ob
serv
ati
on
s,
HH
= h
ou
seh
old
siz
e,
M =
m
ean
, S
D
=
stan
dard
d
evia
tion
. O
nly
fa
rmin
g
hou
seh
old
s are
in
clu
ded
in
th
e s
am
ple
.
TABLE 2: Mean household per capita production levels, by population groups over time
Note
s: N
= o
bse
rvati
on
s, H
H
= h
ou
seh
old
siz
e,
M =
mean
, S
D =
sta
nd
ard
devia
tion
. O
nly
fa
rmin
g
hou
seh
old
s are
in
clu
ded
in
th
e s
am
ple
.
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 -0.009
Slaves*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 Yes
Constant -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 N
OTES
: N
WH
= H
ug
uen
ots
fro
m n
on
-win
e p
rod
uci
ng
reg
ion
s. W
H =
H
ug
uen
ots
fro
m w
ine-p
rod
uci
ng
reg
ion
s. B
ase
cate
gory
: n
on
-Hu
gu
en
ots
an
d t
he y
ear
17
00
. W
heat
reap
ed
is
measu
red
in
mu
iden
, V
ines
in
nu
mb
er
of
thou
san
ds.
Con
vert
ed
to h
ou
seh
old
per
cap
ita levels
. Est
imate
s are
weig
hte
d b
y h
ou
seh
old
siz
e a
nd
sig
nifi
can
ce levels
are
b
ase
d o
n t
he u
se o
f ro
bu
st s
tan
dard
err
ors
.. *
** d
en
ote
s si
gn
ifica
nce
at
the 1
% s
ign
ifica
nce
level, *
* at
5%
an
d *
at
10
%.
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
NO
TES
: W
H =
Hu
gu
en
ots
fro
m w
ine-p
rod
uci
ng
reg
ion
s. B
ase
ca
teg
ory
: N
on
-Win
e H
ug
uen
ots
an
d t
he y
ear
17
00
. W
heat
reap
ed
is
measu
red
in
mu
iden
, V
ines
in n
um
ber
of
thou
san
ds.
Con
vert
ed
to
hou
seh
old
per
cap
ita levels
. Est
imate
s are
weig
hte
d b
y
hou
seh
old
siz
e a
nd
sig
nifi
can
ce levels
are
base
d o
n t
he u
se o
f ro
bu
st s
tan
dard
err
ors
.. *
** d
en
ote
s si
gn
ifica
nce
at
the 1
%
sig
nifi
can
ce level, *
* at
5%
an
d *
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 N
OTES
: N
WH
= H
ug
uen
ots
fro
m n
on
-win
e p
rod
uci
ng
reg
ion
s. W
H =
H
ug
uen
ots
fro
m w
ine-p
rod
uci
ng
reg
ion
s. B
ase
cate
gory
: n
on
-H
ug
uen
ots
an
d t
he y
ear
17
00
. W
heat
sow
n is
measu
red
in
mu
iden
, W
ine in
nu
mb
er
of
leau
gu
ers
pro
du
ced
. W
heat
reap
ed
is
con
vert
ed
to
hou
seh
old
per
cap
ita levels
. Est
imate
s are
weig
hte
d b
y h
ou
seh
old
si
ze a
nd
sig
nifi
can
ce levels
are
base
d o
n t
he u
se o
f ro
bu
st s
tan
dard
err
ors
.. *
** d
en
ote
s si
gn
ifica
nce
at
the 1
% s
ign
ifica
nce
level, *
* at
5%
an
d *
at
10
%.
Dependent Variable: log(Wheat produced) (in muiden) full sample, OLS
Interpretations and conclusionsSettler skills and colonial development
64
Location?
65
Approximate 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 HISTORY
IPSU • 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 CENTURY
IPSU • 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
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