Hermann Giliomee says country forged by a process of dispossession and discrimination, but also of economic and social development
The emotional debate about South Africa’s colonial history draws heavily on the assumption that our history differs little from that of other Western colonies where the indigenous population was decimated or completely marginalised. Any comparative study of colonialism would, however, reveal three features that make South Africa exceptional.
In his Economic History of South Africa: Conquest, Discrimination and Development (2005) Oxford historian Charles Feinstein formulates it as follows. South Africa represents a unique combination of the way in which the indigenous population, European settlers and mineral resources were brought together in a process of dispossession and discrimination but also of economic and social development.
Our country’s history was indeed extraordinary. First, large numbers of both Khoisan people and Africans were living in South Africa prior to the arrival Europeans in 1652. Most of the European settlers soon occupied land beyond the first mountain ranges and kept cattle like the Khoikhoi and the Xhosa did.
On the eastern frontier government attempts at enforcing territorial separation between colonists and Xhosa were impeded because so many farmers insisted on retaining the services of their Xhosa herdsmen and on trading with the Xhosa beyond the colonial boundary. During the twentieth century mines and industries too were completely dependent on black labour. Whites and blacks often thought that they could not live with each other, but they always came to realise that there was a more important reality: they could not live without each other.
When the Union of South Africa was founded in 1910 the total black population stood at 4 million. By 1996 the figure had risen to over 30 million. Such an increase was impossible if white supremacy was, as many intellectuals and politicians are now suggesting, something close to a genocide. State clinics helped to bring about a massive improvement in the survival rates of all infants, whites, brown and black.
The second unique feature of South Africa’s colonial history was the fact that by the year 1900 South Africa already had a white population of more than a million. As Feinstein notes, the settlement of European on such a large scale differentiated the South Africa from most of the colonies in the rest of Africa, in India and most other parts of Asia.
There also was a third difference: while other colonies also had rich mineral resources, there was nothing that could be compared to the vast mineral wealth of the Witwatersrand. The discovery of gold transformed South Africa. But much of South Africa’s low-grade gold ore that sold at a low, fixed price and could only be mined by very cheap labour. Low-grade land, together with poor and uncertain rainfall, were responsible for many of agriculture’s problems. Wages for farm labourers remained extremely low until recently.
Despite sitting on the largest deposits of gold South Africa’s economic development remained stagnant until the early 1930s. In 1931 Jan Hofmeyr, who would soon become minister of finance, wrote that it was an illusion that South Africa was a rich country with vast mineral resources and boundless agricultural possibilities. The gold mines, the only reliable source of foreign exchange, were a wasting asset, the manufacturing sector was sluggish, and agriculture "no easy oyster for man's opening". The country was in a race against time to provide food and work for a rapidly growing population. Hofmeyr warned that the future of “white civilisation” was at risk if the country failed to speedily develop a modern manufacturing sector.
SP Viljoen, a leading economist of the early 1980s, wrote of the early 1930s in these terms: “South Africa’s economic structure was then as undeveloped as those of most African countries [in the early 1980s].”
As a result of a sharp rise in the gold price South Africa from 1933 began to experience strong growth. There was a spurt of exceptionally rapid growth in the 1960s and early 1970s. Some writers erroneously think that this economic growth did nothing for blacks. This is not completely correct. While it is true that the gap between whites and blacks remained enormous and that a maze of restrictions blocked black progress, on average the disposable personal income of all the politically subordinate groups improved, albeit from a very low base.
In 1964 Harry Oppenheimer, head of the Anglo American Corporation, by far the largest conglomerate in the country, remarked that in the previous five years the average wages of ‘non-white’ workers in secondary industry had risen by 5.4 per cent (against those of whites at 3.7 per cent) per year. To him this explained why the country was ‘so much more stable than many people are inclined to suppose.’
This was of little comfort to those blacks living on a pittance. But for them the glimmer of hope was the prospect of a job, albeit one with a very low wage. In 1970 three-quarters of new entrants to the labour market were absorbed in the formal sector, a rate never achieved before or since.
An important development occurred in the 1970s. As the economist Charles Simkins later observed, it was one no-one could have predicted. In government circles the idea had taken root that whites were sufficiently well off, and thatthe state’s priority was to meet its obligations to the disenfranchised. Urban blacks were the great beneficiaries. In the 1975-76 budget the personal income of whites was reduced by 7 per cent but that of Asians was raised by 3 per cent, that of coloureds by 19 per cent and that of blacks by 11 per cent.
In 1978 Prime Minster Vorster warned whites that the abolition of social and economic inequities would demand significant sacrifices in their living standards and material aspirations. Three years later the Director-General of Finance declared that a drastic increase of state spending on blacks at the expense of whites was underway. The government’s priority was to satisfy black demands for improved education and public health services. It would do so by keeping the spending on whites constant until a greater equilibrium was reached.
Employers also followed this route. In 1975 it was reported that the wages of a quarter of a million blacks in industry – this was virtually the entire black elite in the common area – had improved on average by 15 to 20 per cent in the previous year.
By 1980 the government had withdrawn its protection of white workers and had also embarked on a process of closing the racial gaps in salaries and pensions. On the social and the economic terrain, the foundations were laid for the establishment of a democracy.
Strong and resourceful black and multiracial trade unions arose, an independent press challenged the government, coloured and black numbers increased dramatically in secondary and tertiary education from the early 1970s. The racial gaps in wages, salaries and pensions narrowed. Black workers streamed to the town and cities and liberated themselves from the pass laws.
The feared bloodbath in the transition to majority rule did not occur. As a proportion of the population, political deaths are among the lowest of all the major ethnic or racial conflicts since 1945. As General Jan Smuts famously said in 1949: “The worst, like the best, never happens [in South Africa].”
In 2003 the South African economy was the 20th largest in the world measured by purchasing power, 17th in terms of market capitalisation, and 27th with regard to services sector output.
It has not yet been properly explained why South Africa grew so dramatically. Why did the country not remain, as it did until the 1930s, a mining camp dependent largely on imports for manufactured goods, with struggling farmers and a poor-white question that dominated politics?
There were several factors in particular on which far too little emphasis has been laid.
First, in the Twentieth Century South Africa had a professional civil service that was to a large extent independent of the ruling party. It was instituted by Alfred Milner, that bête noire of the Afrikaner nationalists, after the end of the Anglo-Boer War. His perspective was: “All good government is good administration, all the rest is rot.”
Michael O’Dowd, a writer and member of the board of the Anglo American, states correctly that from early on South Africa had a better civil service than any country could expect at that stage of its development. For whites, there was effective local government, proper tax collection and a clean civil service.
Apart from a few isolated cases, corruption on the higher levels was rare. There was no insistence that the top levels of the civil service had to reflect the proportions of the white population. It was only in early 1960s, more than fifty years after Union in 1910, that the upper half of the central state’s civil service reflected the fact that Afrikaners represented about 55% of the white population.
Second there was a consensus among whites that the private sector had to be the engine of growth. No obligation was imposed on the English-speaking business community to “empower” the Afrikaners or any other group. Anglo-American’s Michael O’ Dowd once remarked that South Africa was unique in the sense that no government between 1910 and 1990 made any serious threat of nationalisation. In terms of shareholding and senior management English-speakers by 1939 controlled more than 90 per cent the economy, apart from agriculture, despite fact that the Afrikaners were the dominant group in the electorate.
O’Dowd explains the absence of pressure for nationalisation could largely by attributed to fact that Afrikaners ran the enterprises in the parastatal sector. Iscor and Eskom were soon followed by other state corporations such as the Industrial Development Corporation, which contributed greatly to the rise of a local manufacturing sector.
In 1937 Hendrik Verwoerd became the only opinion former who proposed Afrikaner quotas in the professions and the retail sector to ensure a “proper share” for the Afrikaners. No political leader in the National Party supported him. In the early 1950s the Executive Council of the Afrikaner Broederbond asked a meeting of the Bondsraad to consider the idea of quotas for Afrikaner companies in the various sectors of the economy.
Anton Rupert of Rembrandt and Andreas Wassenaar of Sanlam persuaded them to drop the idea, insisting that “Afrikaner enterprises have to learn to compete”. I once asked Anton Rupert of Rembrandt Corporation whether he knew of any cases of Afrikaner businesses being assisted by English corporations. His succinct answer was: “I cannot think of any and I am grateful for that.”
Thirdly, the successive governments had a plan. Investors knew what to expect. The government wanted the economy to grow and the country to develop country, but not only so that whites could enjoy a better life. Both liberals and segregationists argued that higher spending on white education was needed to establish a “healthy core group” to take the lead in economic development and to resolve widespread white poverty. But there also was an acceptance that addressing the issue of black and coloured poverty could not be postponed indefinitely.
The Carnegie commission appointed to study the poor white issue reported in the early 1930s that the problem of black poverty was as acute as that of white poverty. To justify a focus only on whites, it was suggested that resolving the dire poverty of a section of the whites would ultimately also benefit other communities. W.M. Nicol, a prominent Dutch Reformed Church minister in Johannesburg, told the 1934 conference: ‘[We] can do little about a solution for the native question before making progress with the poor-white question … Once whites stand firmly on their own feet they would have a better chance to help the native in his turn.’ E.G. Malherbe, who wrote the report on white education, warned against using white poverty as an excuse for intensifying segregation. At the 1934 conference he remarked: ‘To maintain our superiority by pushing [blacks] lower down would not only be unfair but the height of folly, even seen from our point of view.’
From 1945 government spending on coloured and black education steadily increased, despite the fact that a large part of the white electorate, both Afrikaans and English-speaking, initially was far from enthusiastic about it. By 1980 there was a fair degree of bipartisan consensus in Parliament that black and coloured education had to be improved and that the racial gap in spending had to be reduced as fast as possible. The political consequences of ever better educated black and coloured children had to be accepted.
In 1994 it was expected that there would be a dramatic improvement in black education, but this did not happen. In presenting the financial statistics of higher education institutions for 2015 Statistician General Pali Lehohla said that progression rates showed that black people were not doing well. In the 80s, he said, for every black graduate there were 1.2 white graduates. “Currently, for every one black person who graduates from university, there are six white people who make it through successfully.” remarked: "These numbers are declaring a horror, to put it bluntly. It is totally unacceptable”, he remarked. (This statement may not be quite correct. Lehohla was probably referring to the pass rate rather than the total through put rate. For a critique see here.)
Lehohla blamed the high dropout rate largely on students lacking sufficient funding. Yet it is difficult to imagine that in the black students in the 1980s were in a better financial situation that their counterparts are today.
After the publication of New History of South Africa (2007), which I co-edited, I occasionally had conversations with black intellectuals about the question whether the book had any message for black people who are now striving to command respect in the economic sphere by establishing successful companies.
I remember one particular occasion very well. It was when I told Professor Njabulo Ndebele, vice-chancellor of the University of Cape Town from 2000 to 2008 and an esteemed novelist, that the economic position of Afrikaners and that of black people had been very similar in the early twentieth century.
Large numbers of both communities were forced to urbanise, both groups were regarded with contempt by trade union leaders of British descent, and the government harshly suppressed strikes by both white and black workers. Up to the 1930s there were virtually no Afrikaner-owned businesses in Johannesburg or other big cities.
“Yes”, Ndebele replied, “that is so. But remember: the Afrikaners had the land.”
*This is an edited extract from Hermann Giliomee’s Historian: An Autobiography (Tafelberg, 2016).
 Charles H Feinstein, An Economic History of South Africa: Conquest, Discrimination and Development (Cambridge: Cambridge University Press, 2005), pp. 1-2.
 SP Viljoen, “The Industrial Achievement of South Africa”, South African Journal of Economics, 51, 1 (1983), p. 31.
 Anglo American Corporation, Chairman’s Statement in 1964 Annual Report, p. 2.
 Personal communication from Jan Sadie, 23 July 2002.
 See Charles Simkins, Liberalism and the Problem of Power (Johannesburg: SA Institute of Race Relations, 1986), p.16.
 For an extended discussion see J.L. Sadie, ‘The Economic Demography of South Africa’, doctoral diss., US, 2000, pp.316-85.
 Hermann Giliomee, ‘Afrikaner politics, 1977-1987’, John Brewer (ed.), Can South Africa Survive? (London: Macmillan, 1989), pp. 114-16.