‘Settlers and comrades’. The variety of capitalism in South Africa, 1910–2016

Abstract

The complexities of business in Africa are illustrated through the case study of economic and business development of the different countries. By the time decolonisation brushed across Africa from the late 1950s, South Africa enjoyed political independence under white rule, controlling a viable economy based on mineral and industrial capitalism. This article shows the change in a powerful state-capitalist nexus from mining to the industry to ethnic or race-based ‘empowerment’. Contesting nationalisms between Afrikaners and loyal British imperial sympathisers, constituted the rationale for inward-looking economic policies for national economic development. The formation of unstable coalitions for market co-ordination managed market distortion to faci­litate the development of the leading modern industrial economy in Africa, while the rest of independent Africa experimented with central planning, socialism and state-capitalism. This study illustrates the peculiarity of capitalist development in Africa, specifically South Africa, considering the particular institutional contexts and broad business environment in which business acts strategically. South African business proactively engaged in a dynamic state/business relationship from national capitalism under minority rule, to an unstable balance of majority black capitalism, socialist worker welfare capitalism and tribal communalism. The manifestation of an unstable but unique state-business nexus involving market and non-market elements, adds innovation to the VoC framework.

Keywords:

• Race
• markets
• coalition
• settlers
• comrades
• business

Disclosure statement

No potential conflict of interest was reported by the author.

Table 1. DTI Generic BEE Scorecard, 2007.

Notes

1 See Sluyterman (2015), where specific characteristics of the Netherlands are considered; Fellman et al. (2008), presenting the Nordic case; Cassis (1997), presenting a European perspective; and on specifics of the German case, Fear (1997) and Stokes (2009).

2 Breckenridge argues that South Africa is not unique, but shares many common aspects of the African economic landscape, such as tribal authority, infrastructure deficiencies, racial segregation, strong state, resource exports, state-owned enterprises. See Breckenridge (2018): 3. A ­similar argument is put forward by Padyachee (2013).

3 The early revisionists include Martin Legassick, Frederick A Johnstone, Shula Marks, Harold Wolpe, Stanley Trapido, Colin Bundy and the Sussex Poulantzians (Robert Davies, David Kaplan, Michael Morris and Dan O’Meara), Mike Morris, followed by latecomers such as Peter Richardson, Ian Phimister, William Beinart and Phil Bonner. Off course many more joined the bandwagon, and others matured to moderation after scholarly criticism. For a comprehensive analysis of the Neo-Marxist historiography on South Africa, see Verhoef (1982) and Wright (1977). Legassick, Johnstone and Wolpe rejected the term ’neo-Marxist’, since their analysis was considered to be ‘oriented by the approach of Marxist historical materialism, of Marxist political economy and class analysis, of Marxist social science,’ Johnstone (1979), ‘Most painful to our hearts; South African history through the eyes of the Marxist-school (Revised text of a public lecture, University of the Witwatersrand, April 1979 at Conference on Race Conflict in South Africa: 1.

4 Lord Alfred Milner, British High Commissioner for the Transvaal Colony, referred to the European Boer and English inhabitants of the British colonies in South Africa as ‘white races’: See de Kiewiet (1941).

5 Union Statistics for Fifty Year, 1910–1960. Pretoria: Government Printer: A-3.

6 The formation of the National Party did not unite all Afrikaans-speaking people in one political party, or create a single homogenous cultural entity. Since 1910 Afrikaners were divided on entering the Union under the British monarchy. The National Party established a nationalism driven party on the basis of the primacy of South Africa’s interest. This sentiment resonated well with many Afrikaans-speaking people. Despite the National Party, Afrikaners remained divided politically. See H Giliomee (2003) The Afrikaners; E Dommisse (2011) Sir David Pieter de Villiers Graaff. Die erfridder van De Grendel. Cape Town: Tafelberg; H Giliomee (2012) Die Laaste Afrikanerleiers. ‘n Opperste toets van mag. Cape Town: Tafelberg. The obsolete deterministic class analysis of so-called ‘Afrikanerdom’ by D O’Meara (1983), Volkskapitalisme. Class capital and ideology in the development of Afrikaner nationalism 1934–1948. Johannesburg: Ravan Press; and (1996) Forty lost years. The apartheid state and the politics of the National Party, 1948–1994. Johannesburg: Ravan Press, both fail to capture the multidimensional historical dynamics of adjusting institutional complementarities and systems coordination. O’Meara never consulted any primary documents from archives on the history of Afrikaner people, but digested secondary material trough the deterministic Marxist class paradigm, thus disqualifying it from explaining the dynamic nature of the variety of capitalism in South Africa.

7 This development points to emerging social and economic coordination. It is not the product of capitalist class action fabricating nationalism to defray intra-capitalist class tensions, as suggested by O’Meara (1983, 27–28).

8 Feinstein (2006, p. 200); Jones (2002).

9 Maasdorp (2002).

10 This nature of the coordination was described by the neo-Marxist revisionists as a race-based class domination; See Wolpe (1972) and Lipton (1979).

11 ‘Homelands’ is the term used to refer to the ethnic tribal lands allocated to the different ethnic African communities under the National party policy of separate development.

12 BICs engaged extensively with training, support and mentorship in agricultural and industrial enterprise and mining operations. Some examples are irrigation projects along the Letaba River for the farming of cotton, groundnuts, and other winter crops; tea plantations by Tshivasi Tea products near Sibasa in Venda; meat processing businesses, textile weaving (Hillmond Weavers mohair weaving factory in Umtata); radio factory in Lebowa; furniture manufacturing plants in three homelands – Transkei, Venda and Gazankulu; steel cabinet manufacturing in Isithebe in KwaZulu; etc. The cane furniture manufacturing giant of South Africa, Mr Habakuk Shikwane, expanded his cane furniture manufacturing plant in Hammanskraal in the Bophuthatswana homeland, with BIC support; Mr Agrippa Mayapa developed an extensive network of hotels and bakeries in the Transkei with financial and business support of the Transkei Development Corporation. In mining the current Royal Bafokeng Platinum Mines Ltd, originated from mining developments supported by the BIC in the Bophuthatswana homeland. It is impossible to explain the extent if BIC economic and business development in the scope of this article. Suffice to note here that between 1960 and 1976 a total of 124 900 new employment opportunities were created through industrial development in decentralized areas of the homelands. See Viljoen (1976); Verhoef (2017).

13 African Trader, January/March 1967.

14 African Business, August 1980, 31-33; L Mathebe (1994) Black entrepreneurial activity and the origins of the National African Federation of Chambers of Commerce, (NAFCOC), 1920–1980. Unpublished limited scope thesis, University of the Witwatersrand, pp. 45–46.

15 African Business, December 1979, p. 5.

16 African Business, April 1979, pp. 11–13.

17 African Business, December/January 1988/1989, p. 23.

18 Cape Archives (KAB) 2562 Archives of the Urban Foundation, 1979–1990; SA: Sanlam Archives: Minutes of the Sankrop Board, 1985–1990.

19 See J N Hamman: “Haal politiek uit ekonomie’, Volkshandel, 46(68), p. 29.

20 See M Lipton (2007) ; Submissions by the AHI, the Steel and Engineering Industries federation of South Africa (Seifsa) and the South African Council of Banks to the Truth and Reconciliation Commission underlines the opposition to the policy of racial segregation by increasing cost to industry, undermining productivity and growth since the policy undermined skills development. See Truth and Reconciliation Commission Report, Institutional healing Culpability submission, 2003: par: 16.

21 See Godsell (1986); see also Jenkins, Pretoria News, 23/12/1986, p. 10; Jenkins, Natal Witness, 23/12/1985, p. 12.

22 SAPA PR Wire Service: Speech of Thabo Mbeki at ANC National Constitutional Conference, 31 March–2 April 1995; also see Jeffery (2014) and du Toit (2001).

23 Jeffrey (2014), BEE helping or hurting, pp. 2–122.

24 Central Statistics Service (1996, pp. 5–6).

25 http://www.anc.org.za/ancdocs/history/charter.html.

26 ‘Black’ here refers to all ‘previously disadvantaged persons’, which are Africans, Coloured persons and Indians.

27 Section 1.9(1), Constitution of the Republic of South Africa.

28 Statement by Deputy President T M Mbeki, on behalf of the African National Congress on the Occasion of the Adoption by the Constitutional Assembly of the Republic of South Africa Constitution Bill, 1996, Cape Town, 8 May 1996, p. 3: www.anc.org.za.

29 In 1998 blacks made up 77 percent of the South African population of 42.3 million people, Coloured people 8.8 percent, Indians 2.5 percent and whites 10 percent: see http://www.statssa.gov.za/publications/Report-03-01-67/Report-03-01-672011.pdf.

30 Quoted in Jeffrey (2014).

31 There is consensus about the non-consultative intra-party one-sidedness of the ANC economic and BEE policy. See Jeffrey (2014), Moodley and Adam (2000); Nattrass and Seekings (2010), Nattrass (2014).

32 E. Sidiripoulos (1993) ’Black Economic Empowerment’, South African Institute of Race Relations. Spotlight (2): 1-12.

33 Department of Trade and Industry (DTI) (2003); see also Jack (2003).

34 DTI (2003) , Jack (2007) , and Andrews (2008), Harvard University RWP08-033:33-36.

35 Section 2(d), Preferential Procurement Policy Framework Act, 2000.

36 It is impossible to discuss all the examples of gross corruption in the allocation of procurement and the pricing of tenders in this study. Full detail of endless cases is in A Jeffrey (2014); also see Jeffrey (2016), Mathura (2009), Shava (2016), and Janisch (2018) ‘Here’s how BEE must change to meet Ramaphosa’s vision for South Africa’: SA Investing, 27/2/2018 (https://www.biznews,com/sa-investing/2018/02/27/bee-must-change-ramaphosa-vision, accessed 28/02/2018).

37 Hogg (2018).

38 https://www.sasolkhanyisa.com/from-inzalo-to-khanyisa/

39 van Zyl (2018), https://biznews.com/sa-investing/2018/11/22/discovery-ban-bee-plan-adrina-gore-reponds-to-critics.html.

40 Cameron (2019), https://www.biznews.com/transfornation/2019/05/14/khula-sizwe-investment-barloworld.html.