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Proposal for a research project. Preliminary outline.

Historical Heritage and Human Rights. Liberating and Suppressive Effects of Liberalism.

Capitalism, Apartheid and the Pursuit of Equal Rights in South Africa. The Role of Business in the Creation and Erosion of Apartheid and in the Building of a New Nation.


For at least 25 years, from the end of the 1960s to the early 1990s, there were in South African historiography and social science two fairly clearly definable, mutually diverging main viewpoints of the relationship between capitalism and apartheid.

The racial revisionist viewpoint has attempted to prove that apartheid was created by and served the capitalist interests that enjoyed an abundance of forced cheap labour, and that this can be shown in studies of the rapid successful growth in the South African economy during most of this century.

The liberal viewpoint has assumed that apartheid is the result of racist sentiments, particularly among Afrikaner nationalists, who from a political standpoint have been the dominant power factor during most of the period since the union of South Africa in 1910, and that the system, on the contrary, has impaired economic growth.


The question of whether capitalism was the reason for raw social repression along race lines for most of last century, or if capitalism in fact liberated South Africa from outdated political apartheid, still has great implications for strategies for social struggle, political choices of economic policy, possibilities of reconciliation etc.


I find that this subject is still central and topical both for the nature of the historiographical debate and for the present situation in South African political economy, and I think it is posible to argue for a continued debate on this subject. The insight and acknowledgment that not all problems in South Africa has been solved, that conflicts have not gone away, and that the social structure behind the liberal-radical terminology still exists are crucial. I also believe in revealing the historical truths despite that it could deepen conflicts temporarily.


The argument of liberal economic historians is that the relationship between capitalism and apartheid has been complex and changing. Some of them suggests that the capitalists could co-exist with and benefit from apartheid in areas where their business depended on an abundance of cheap, unskilled labour, particularly when they were also export-oriented and had no need for a domestic market. [1] This was the case for most of the mining sector and white agriculture up until the 1960s. On the other hand, apartheid was often costly for companies needing skilled labour or were dependent upon the domestic market, which had long since been the situation in the manufacturing industry and trade. As these sectors gradually became more capital-intense and mechanised, their needs increased for skilled workers and for longer production sequences, which under apartheid increased the costs to them because the system made skilled white workers expensive and limited the domestic market through low wages for blacks.

Based on this viewpoint, the questions of to what extent the capitalists supported or opposed apartheid, and to what extent economic growth strengthened or undermined apartheid, are over the long term rather difficult to answer, and should be formulated in another way and differentiated. One sub-question could be: what form of economic growth supported the system? Growth dependent on broad access to easily purchased, recruited labour, could co-exist with apartheid. High-technological growth needing skilled labour and a larger sales market perhaps contributed to undermining apartheid policy.


Lipton and other liberal economic historians postulates that liberal capitalists were rather powerless in relation to expediting reforms due to the fact that political organisation was formed along race lines rather than class affiliation. Nevertheless, in later works she ascribes much of the political change to pressure from business, while she criticises both liberals and Marxists for being one-sided, and, based on a somewhat eclectic argument, she calls for new forms of synthesis. [2]


The liberal viewpoint is, however, that it was the pressure from economic interests that forced the government to change the rigid, all-encompassing racial segregation policy. That occurred with the recognition of the African trade unions from the late 1970s, the acceptance of large permanent African settlement in urban areas, gradual repeal of passport laws from 1986 on, and formal abolishment of all petty-apartheid legislation in 1989-90.

According to the liberal researchers there were mounting business pressures against a growing number of apartheid policies during late apartheid. This pressure came both from leading businesspeople, such as Harry Oppenheimer, and from business organisations, such as the Federated Chambers of Industry (FCI) and Associated Chambers of Commerce (Assocom).  From the 1970 election (when the ruling Afrikaner National Party defeated a challenge from its Herstigte right-wing), these pressures contributed to the erosion and scrapping of many apartheid measures.

By 1990, some of the legally entrenched apartheid measures had already been been abolished. There was, and there remains, extreme racial inequality and a huge task of socio-economic transformation. But the legalised and institutionalised measures which were the distinctive feature of apartheid had been abolished. And these had not gone easily, but only after fierce battles, in many of which business and liberals, played an active and  public role. This process which led some to predict that SA was on a reformist course.

The transition to majority rule seemed to confirm this analysis and to contradict the neo-Marxist argument that capitalism and apartheid were inextricably linked.

This development can undeniably be interpreted as the liberal argument having proved its truth-value: that economic growth in the end forced the South African society to rise above white racial dominance.


Quite a few studies have already been made on changing interest and dominance relationships among the fractions of the white population, and their expression as class actors. These have been analysed individually, including agrarian capital, mining and manufacturing capital and the white worker class. The dialectic interaction between these forces has, on the other hand, not been studied quite so carefully. Lipton's analysis is in some ways comparative to Stan­ley Greenberg's from 1980. [3] They both have a somewhat elitist view of history that focuses on the dominant classes, and they are both dividing the development of the racial supremacy into to different parts: A period of intensification and a more recent crisis of hegemony.

Compared to early radical structural historical research, Greenberg stood for a more realistic tendency, and his view of the role of manufacturing industry under the development of the race state was regarded as controversial in this camp. He subscribed, to some degree, to Blumer's liberal-influenced viewpoint: the manufacturers had only adjusted to the ruling order, but were not the instigators. According to Greenberg, the ones behind the race system were the white farmers, the white workers and mining companies. In regards to the latter group, Lipton mostly disagreed with him.


In resent liberal works, some authors have seeked to document that the Marxist/workerist argument is crumbling and that today they admit to the changing role of capital due to rising costs under late apartheid. On the other hand, none of them investigate in dept to which degree cost difficulties for capital were mainly results of apartheid restrictions or of political worker resistance or of international solidarity measures, which seems to be quite crucial for this whole argument.

The fact that the government actually by and large put through its rigid policy all the way up to the late 1970s, and basically maintained its course until the early 1990s, is just an indication to liberals that political power in South Africa was not a reflection of economic power.


Two opposite arguments have been drawn up in this discussion:

  1. That the business world has contributed to the erosion of apartheid.
  2. That business was the major beneficiary of apartheid.

It seems to me that in a historical perspective these two possibilities are not necessarily totally inconsistent or incompatible.


Most liberal analysis are not placing much significance to the very god reasons that business could have to be against reforms. It was part of the complexity that a socialist oriented revolution in alliance with the socialist block, which had been an important supporter of the struggle against colonialism and western exploitation of Africa right from the Comintern congress in 1921, would have been a possible choice for ANC, had the vitality of the economy in the socialist countries kept the pace, it had until the 1970s.


Business attitudes towards late apartheid was more illogical and contradictory than the liberals are willing to recognize. Capital was indeed interested in restrictions in the workers negotiation power, but at the same time afraid of wild uncontrolled strikes with no responsible counterpart. They were indeed interested in low wages and at the same time in a growing consumer market. They were interested in access to foreign markets, but also in protection of their own. They wanted liberalisation as part of globalisation, but they also liked favourable government contracts, and it seems strange when liberal scholars recognise the need in SA business for globalisation but at the same time underestimates the importance of the treat of sanctions.

Usually the liberals’ recognition of the state-supported corporate sector is also too weak. State protection/protectionism has at certain stages been helpful for most capitalist societies, but seldom as necessary as in South Africa. The sad fact that suppression, restoration, authoritarianism, and state created or supported monopolies have been necessary and productive elements at certain stages of development in most western countries is hardly explained by the conventional view.


Radical researchers have questioned the progressive role of the business world during the abolishment of apartheid, because its reform initiatives were in reality forced by working class activism, and, in addition, were severely limited and in themselves led only to marginal adjustments.

Some liberals base their argument on a studes of the Chamber of Mines attempt to abolish or limit the job colour bar. Yet there are historical studies that they strive to avoid: the history of mining demands for new passport laws; their demand to make breach of contract a penalised criminal offence; their demand for undermining of and espionage against the union organisations by law enforcement; control of worker residential areas; monopolisation of labour recruitment; support of a policy creating poverty in the African reservations as a prerequisite for the liberation of free labour; and of poll taxes with the same purpose. These histories begin in the last decades of the eighteenth century.

The validity of the liberal argument rests to some degree on the assertion that mining capital was forced to participate in labour repressive race policy due to the artificially high costs of using white labour. If, on the other hand, mining capital from phase one was deeply involved in the creation of race policy, which many radical historians believe they can prove, liberal thesis on the business community resistance to apartheid can only be partly substantiated.


In my opinion, there is no reason to be surprised that the mining companies continued their support of the labour repressive measures, even during periods when the mines were extremely profitable. Holding black labour wages down was their top priority. Yet in addition to that, the mine owners, the randlords, were entirely aware that the short-term interests of mining capital had to come second to its long-term interest in balance and stability within the overall political economic system. [4] Taxes distributed to poor whites and the wage costs for white workers were, in that connection, acknowledged political necessities for securing the racial split of the working class; an intention for stability through divide and rule that succeeded fairly well throughout more than fifty years, considering the social tensions.


A favourable view of, and a great deal of sympathy for, private business is necessary to fully accept the liberal explanation. There is no doubt that organisations of business people or employers, the Chamber of Mines in particular, outwardly supported recognition of African unions during periods of unrest and pressure on the labour market, yet that was hardly the dominant attitude in reality. Even in the early 1970s, when the need for recognition was pressing following the Durban strikes, most companies attempted to create employer-controlled liaison committees to circumvent works committees elected by the black workers themselves. When African unions finally won recognition during the 1970s and 80s, such came first in the foreign-owned companies that at the same time were under the greatest pressure from the international solidarity movement.

I have been looking in vain for liberal analyses on the lack of agreement between statements and action in the business world. According to Marxist analysis, the task of the established state to some degree is so to speak to look after the overall interest of the capitalist system. It is the duty of the state to take the blame, so capital fractions can keep their back free. Most liberal analysis do not consider this possibility at all.


Of course mine owners would have liked to use only cheap black labour instead of beeing forced to use expensive whites, but would that actually have been less discriminating? From 1924, mine owners too saw the light: In a South African situation with great potentials for revolution, the stability of the overall system had to be secured by sustaining a permanent split of the workers following racial lines. The white workers were of course a willing party.

Manufacturing and trade capital also benefited from the disorganisation among African workers and the low standards segregation and apartheid had ensured for agriculture and the mining industry. Liberal researcher Heribert Adam accepted early on that apartheid for a long period allowed development of capitalistic growth at the expense of the Africans standard of living and social welfare. [5] The rapid growth in the manufacturing industry throughout the 1960s would perhaps have been less confusing to liberals had they recognised the scope of the ties the business world had with the racist regime.

The fact that owners of capital from various economic sectors never mounted a collective attack on the migrant system, never seriously challenged the reservation/Bantustan system, and never insisted on full civil rights for blacks apparently has not challenged liberal analyses.


The progressive role of capitalism for the development of productivity and invention should not be a problem for a Marxist to recognise, since Marx himself did that already in the Manifest. The disagreement occurs when the consequences, expenses and injustices of development become clear.

It still seems to me that many liberals have somewhat simplistic and deterministic views of the modernising effects of capitalism. There is a prize to pay for industrialisation and modernisation and it is always the weakest who is paying most. The peasants of Ukraine, and of Ireland, the forced labour in the European colonies and later on the away-rationalised unemployed industrial workers. There are natural conflicts of interest in this process and to some degree, also the historian has to choose side.


Even analysts who support “a capitalist system” in a “social democracy” form, and are separating themselfs from Thatcherism like Merle Lipton, have been used in support for neo-liberal solutions with almost no focus on negative social consequences.


Even if progressive liberals indeed do care about people killed, tortured or deprived of their property during apartheid, their main concern is not ordinary people extra-exploited by apartheids economic mechanisms (of which some are still in function).

The black population's resistance struggle against apartheid and capitalism has not really been an integrated part of the liberal view of history or capitalism. Black discontent and protest is mentioned, yet never as an integral part of the discussion of capitalism and apartheid. Important events in South Africa's history, such as the mine worker strike of 1946, the passport and defiance campaigns of the 1950s that culminated in the suppression after the Sharpeville massacre, the general strikes in the early 1970s, the Soweto uprising, and the protests that made black towns­hips ungovernable in the 1980s, are not convincingly integrated into the capitalism logic of the economic liberals, and usually they have not much understanding for the strong mix of national, ethnical and social mobilisation which was necessary to get rid of apartheid. Economic liberals still do not recognise this and they did not attribute much to it.


In order to see and theorise such insights, however, attention needs to be shifted from capitalists to workers and unemployed in the explanatory model for change.

The problems of genuineness of reform might look like an academical question since formal apartheid was abolished in the end. However, for a historian, it is not unimportant to establish that until 1985, when it became clear that the tricameral parliamentary reform had resulted only in an indomitable, incredibly broad popular uprising, there was, not only in business or between economic liberalists but also among many political liberals, not much enthusiasm for the parole of one person - one vote.

When should one be satisfied with reform? It still seems to me that even relative contentment with the 1983-reform, which was advocated by some liberals, would have been very harmful for the possibilities of full democracy and non-racialism.

To which extent what has taken place in South Africa has been a betrayed or tamed negotiated revolution or it simply could be classified as reform is still very much debatable.

The question also arise of course, why capital should be against change of apartheid, if they were reassured that the basic structure of exploitation would be intact. For most black people the fight for social justice was just as important as the race struggle, and the amounting indifference with the democratic process at its present stage is probably caused by disappointment with growing economic inequality.


The liberal tradition in South Africa contains many moral qualities, but also many unanswered questions, above all concerning the relationship between capitalism and apartheid. With formal apartheid abolished and the social order in continuing crisis (even though the situation due to general goodwill cannot be described as such at this point), where the African workers and unemployed also could challenge the more fundamentally economical assumptions and norms from which the society has been governed, liberalism in South Africa can hardly afford to leave these questions unanswered.


The problems of the change in directions in important political arenas, however, cannot be limited to the Afrikaner nationalists and the liberals. First and foremost, the Marxists, who probably had more political and practical influence during the 1970s and 80s than now, must do some painful soul searching, and many former radicals have been doing that for some time. The Marxists' central argument was that apartheid and the limitations on market freedom not only were in accordance with capitalistic economic growth in South Africa, but were also contributing factors to that growth. The Marxists now need to develop new convincing explanations for why popular black activism should focus on socialistic oriented reform. If capitalism and race discrimination are not inseparable, then socialism's most important rationale will have to be based on something other than basic anti-racism.

The relationship between state and capital in modern day South Africa is undergoing change through many-faceted and fleeting processes, the understanding of which presupposes the development of new conceptual guides. This will also necessitate creatively doing away with obsolete approaches.


The postulation by some liberals that institutionalised apartheid was almost abolished before 1990 hardly gives a fair picture. It is too narrow only to focus on the legalised pillars of apartheid. In a broader understanding, freedom struggle was present in South Africa long before 1948, just as resistance against racialist capitalist extra-exploitation is far from over. Black workers are still ranked at a lover level than whites with accordingly lover salaries. Given the social gaps and working class traditions in SA, it is probably only a time-question when large-scale social mobilisation will surface again. This is the main reason, why the liberal-radical debate over social discrimination is not over. The present weakness of this debate is manly a result of a lack of alternative socialist visions. The reason that the path in South Africa became reformist was not the role of the business organisations, but the lack of alternatives.

Some of the conflicts in South Africa, which the liberals claimed they wanted to avoid, were necessary and unavoidable. Actually, they still are, which is exactly why the debate is still topical.

The long academic strife between liberals and Marxist inspired scholars over the relationship between capitalism and apartheid should thus be developed productively around central contexts concerning the relationships between government, capital and popular movements in the South Africa of the future. Taking social human rights serious will be part of this debate.


My proposed research project involves a review of the bitter debates about the role of white business under apartheid. The project will sketch out the contending positions in the debate and move this debate into present and future settings of the new South Africa.


One of the starting points will be the conflicting testimony presented to the Truth & Reconciliation Commission (TRC) on the role of business under apartheid.

Some of those testifying argued that the course of events since 1989 - the willingness of the ruling white elite to negotiate a non-racial constitution for SA and to hold democratic elections - confirmed the liberal argument that the interests of, and pressures from, business would contribute to the erosion of apartheid and to the conversion of the ruling elite to the view that a negotiated ending to apartheid was desirable and possible. But others denied that the historical record gave support to this view and reiterated the neo-Marxist argument that business was the major supporter and beneficiary of apartheid, only switching its support at the last moment when the demise of apartheid became unstoppable.


Some pragmatic liberals and former radicals have been supprised over the continued acrimony over these issues in post-apartheid SA, and the persistence of the negative view of the role of business, and of the 'white liberals' to whom business is perceived as linked.

SA's post-apartheid settlement occurred at a time of apperently narrowing ideological differences, with a significant shift by the ANC from the socialist policies of the Freedom Charter (which included ‘nationalisation of the banks, mines and monopoly industry’ - a principle reiterated by Nelson Mandela on his release from prison in 1990, but thereafter soon abandoned) to the current version of capitalism, with priority for the empowerment of a smallish elite and, thus far, little redistribution to the poor.

It is worth noting that the dramatic shift in ANC policy fits uneasily with the continuing anti-capitalist rhetoric evident at the TRC hearing.


The resurfacing at the TRC hearings of the neo-Marxist analysis, including its negative view of the role of business and a certain hostility towards 'white liberals', and the continuing tensions between the ANC & white liberals, in it self calls for a revisiting of the debates of the apartheid years.

A preliminary view at the sources suggests however that there is less disagreement about the facts - what business did and said and how the government reacted - than at earlier stages in the debate. The difference is more over the interpretation of the facts. These disagreements, in turn, rest upon differences in the underlying (and largely implicit) assumptions, values and theories about human behaviour and social change of the contenders in this debate.

At the TRC hearings, Cosatu’s lengthy indictment of the role of business, which it lumps together with the SA government, as its ally & handmaiden, notes, in a terse half-page, that business indeed pressed for, and frequently secured, the reforms listed above, but the significance of this is summarily dismissed for the reasons that the motives of business, in pressing for reforms, was not to get rid of apartheid, but the self-interested motive of reducing rising economic costs of apartheid and that the intention of business was not to abolish apartheid, but to secure limited adjustments, termed neo-apartheid measures, which would actually strengthen apartheid by making it more adaptable.

The Black Management Forum adopted an analysis of the relationship between capitalism and apartheid similar to that of the Marxists, yet they themselves advocate the nurturing of black capitalists, who will be the equals of, or perhaps supplant, whites. In this case, the anti-capitalist rhetoric needs to be scrutinised to see whether this is really about capitalism or whether it is about who its beneficiaries should be.


This very sensitivity leads some to argue that it is unwise and unnecessary to dig up the past and expose the truth about peoples’ appalling past behaviour to one another.

Partly for this reason, the establishment of the TRC was contested, and both Mandela and de Klerk initially opposed it. Some academics agree with the ‘bury the past’ approach, but I do not believe this is desirable or feasible. People are driven by a desire to understand their past; growing access to education and information technology is making it difficult to impede investigation and exposure of uncomfortable realities. It is part of our zeitgeist that people are entitled to know ‘the truth’, however painful and destabilising this may be.

Thus, this debate is relevant to political strategy, and to future race, class and human rights relations in South Africa. Among other reasons, because of the fear that any credit given to white business will be used as an excuse to oppose social reform: the case for redistribution rests on the coexistence of extreme wealth and poverty. It would in this connection be wrong and foolish of white business not to recognise that there is an appalling inheritance that needs to be righted.

The complex, messy, unheroic, but not entirely discreditable, truth about the role of business under apartheid has the potential to provide a more realistic basis for building a common society.


For literature references, seek on Key Word “liberalisme”, “forskningsdebatten”, “transformationsprocessen” or “makroøkonomi” in my database LitSA, or look for the mentioned authors in the Author-field.


1] Lipton, Merle: Capitalism & Apartheid. Contained in Lonsdale, J. (ed.): South Africa in Question, London, 1988, p. 53.

[2] Merle Lipton: The debate about the Role of Business in Eroding or Reinforcing Apartheid, in Conference Book Publication, Hans Erik Stolten (ed.): History-Making and Present Day Politics. The Meaning of Collective Memory in South Africa. Original paper p. 3., Collective Memory and Present day Politics in South Africa and the Nordic Countries, Conference of Historians, Africanists and Development Researchers, Copenhagen 22-23 August, 2002.

[3] Greenberg, Stanley B.: Race and State in Capitalist Development: comparative perspectives, Yale University Press, New Haven, 1980. Also published by Ravan Press.

[4] See for example Wheatcroft, Geoffrey: The Randlords. The Men who made South Africa, Weidenfeld & Nicolson, London, 1985, pp. 251-52.

[5] Among others Adam, Heribert: The Failure of PoliticalLliberalism in South Africa, in Price/Rosberg (eds.): The Apartheid Regime.., Institute of International Studies, University of California, 1980

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