The discussion of the relationship between capitalism and apartheid: elaborations over Lipton’s position

By Hans Erik Stolten

 

 

For at least 25 years, from the end of the 1960s to the early 1990s, there were in South African historiography two fairly clearly definable, mutually diverging, main viewpoints on the relationship between capitalism and apartheid, and their presence can still be sensed in new influential works of history.

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

The liberal viewpoint has assumed that apartheid is the result of racist sentiments, particularly among Afrikaner nationalists, who have been the dominant political 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.

I have been rereading an important work from the late 1980s published at a very decisive point in history and dealing with this discussion. This central complex of problems deserves to be taken up again at a time where the politics of the new regime seems to accept growing social gaps and problems of poverty. In contradiction to many former radical intellectuals, who have long ago given up fighting for lost cases, it seems impossible for me to get past this principal debate.

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raw social repression along race lines for most of last century, or if capitalism in fact liberated South Africa from outdated political apartheid, still has great implications for strategies for social struggle, political choices of economic policy, possibilities of reconciliation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

 

Business world attitudes towards apartheid - Merle Lipton's analysis

One of the most outstanding and path breaking presentations that joined the debate on the liberal side in the late 1980s was Merle Lipton's Capitalism and Apartheid.[1] Merle Lipton's view, which is close to the latter of the viewpoints mentioned above, assumes that many business people were against apartheid policy because the system gave them extra expenses and hardships that conflicted with their business needs.

I salute that Merle Lipton aims to continue her studies in this field of research, and I look forward to many important debates on this theme.[2] The reason that I decided to take her work up for renewed analysing, is of course that I find it still central and topical both for the nature of the historiographical debate and for the present situation in South African political economy.[3] What I like by Lipton is that she fully recognizes the influence that society as such play for academia. I value her as an externalist in contradiction to many old fashion conservative historians. Nevertheless there is something internalistic over her apparent expectations to radical scholars. She does not see their historical interplay with the popular movements as natural, even if she considers liberal economists’ interaction with the apartheid system to have been fully respectable.

 

In the mid-80s Lipton's book immediately entered the fierce race/class debate, and was promptly criticised by many qualified analysts.[4] Some of these critics, especially Stanley Greenberg, have inspired my own analysis of Lipton’s work. Some of the tensions around her work were probably caused by the fact that she used an economistic-deterministic method, in many ways typical also for classical Marxism, and turned it around fighting neo-Marxism. Her interpretation of the relationship between capitalism and apartheid raised questions about the relative importance class and race had respectively for the development of South African society, and questions about the nature of capitalism and its relationship to government, including to what extent the government was mainly a tool for capital, or was self-autonomous and acted in its own interests or from more indeterminable group interests, such as a more or less privileged electorate. These questions were not only of theoretical interest for South Africa, but also important for the development of political strategies. If capital fractions were against apartheid, they were, of course, potential allies in the fight against the system. If, on the other hand, apartheid supported capitalism, or perhaps was even a condition for its existence in South Africa, then the abolishment of racial discrimination as such might necessitate the abolishment of capitalism, at least in the form in which it had been known so far.

 

In her study of the relationship between capitalism and apartheid, Lipton defines these categories quite narrowly. By apartheid, she means a system of statutory institutionalised racial discrimination and separation, originating in political measures in the previous colonies and republics on SA territory, and expanded by the creation of the Union through the Nationalist Party's growing parliamentary influence. There are other important dimensions to the peculiar South African model, such as extreme class inequality and authoritarian attitudes; yet even though these have repercussions on apartheid, they are, according to Lipton, conceptually separated from this and are not unique to South Africa.

By capitalism, Lipton simply means a social system, in which there is a great degree of private ownership of the production apparatus, and a low degree of government or joint ownership, and in which owners of capital purchase the workers' labour with wages for the purpose of making profit/added value. Lipton's argument is that the relationship between capitalism and apartheid has been complex and changing. She 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.[5] 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 being 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.

Lipton does not believe that long-term growth in the South African economy must be attributed to apartheid, but lists a long series of contributing factors, such as the vast mineral reserves, abundance of capital, entrepreneurial spirit, skills and effective economic measures, such as protectionism.

Lipton states, she agrees that:

 “...a classical Marxist interpretation goes quite far in explaining some aspects of South Af­ri­can development.”

Yet at the same time in her analysis assumes:

“...liberalism’s superior insight in the behaviour of individuals and firms.”[6]

Lipton asks this main question:

“...whether capitalists in South Africa (SA) wanted to retain, strengthen or destroy apartheid and whether they had the power to secure their aims.”[7]

From this starting point, she arrives at the position that the business world in South Africa was never unanimously supportive of apartheid, and that the question of to what extent economic growth undermined the race system cannot be answered unequivocally.

 

Lipton's analysis is based on a very wide-meshed periodisation of South Africa's history in two parts: Apartheid's development period: 1910 – 1970 and apartheid's gradual erosion after 1970. She differentiates between various phases of economic growth. Up to the late 1960s, agriculture needed vast amounts of cheap unskilled labour in order to ensure its profitability. The same was true for the mining industry until the early 1970s. On the other hand, the manufacturing industry and trade already needed skilled labour and a growing domestic market rather early on, which could only be advanced through higher wages. Apartheid did not benefit these sectors at all, it seems. Up to the mid 1960s, agrarian based capital had great influence, mostly due to the rigid dominance of racial prejudices within the political sphere. Since then, the national economy became steadily less dependent on agriculture and mining operations, and even these sectors saw an increased need for skilled labour. This development gave rise to broader support for changes in labour market policy in favour of a more mobile competitive labour force with a greater number of skilled blacks. In addition to this, favouritism towards Afrikaner-controlled companies by changing governments created a new group of Afrikaans-speaking liberals, who also wanted to undo apartheid and thus contributed to fractures and splits among the Boers. The Afrikaner capitalists felt the freeze of the domestic market, the rising threat against their export opportunities, the hesitation of foreign investors and the problems of technological imports and innovation.[8] Meanwhile, political power lay with the representatives of the remaining static sectors and groups, and their reaction against the rising threat of uprising consisted of ever more authoritarian measures.

“...the power of the declining classes and sectors had been institutionalized and entrenched, and as the challenge to them grew, they shored up their power by authoritarian measures. The ruling NP, and the vast bureaucracy it sprawled had a vested interest in controlling the rate of change, and in slowing and prevented some changes, particularly in the political sphere, which threatened their power and jobs.”[9]

 

After establishing, but not fully explaining, the close ties between class and ethnicity, Lipton assumes that neither broad class categories that divide the population into workers and capitalists, nor racial ethnic categories that divide it into Afrikaners, coloureds, Indians, whites or into English-speaking and Boers, Zulus and Xhosas, satisfactorily explains the groups’ behaviour patterns. By and large, she affiliates herself with the liberal viewpoint:

“In the competition for resources, class conflicts often took an ethnic form; the lines of cle­a­vage between groups, and the alliances constructed in the political struggle, were usually along eth­nic, not class lines.”[10]

Lipton postulates that liberal capitalists were rather powerless in relation to expediting reforms, and that this is precisely 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.[11] In her own way, Lipton criticises both liberals and Marxists for being one-sided, and, based on a somewhat eclectic argument, calls for a new form of synthesis:

“Apartheid cannot simply be explained as the outcome of capitalism or racism. Its origins lie in a complex interaction between class interests (of white labour as well as of sections of capital) and racism/ethnicity, reinforced by ideological and security factors.

The dominance of white agriculture and white labour until the mid-1960s was based on political, not economic power.”[12]

 

To me, Lipton represents a liberal economic historical view, which in a number of areas has learned from radical methodology and ways of viewing things, yet is nonetheless deeply rooted in a fundamentally liberal view of society.

 

In Lipton's opinion, apartheid was thus incompatible with highly developed capitalism, the growth of which depended on the introduction of high technology. Prior to the 1970s, the shortage of qualified labour mostly affected the manufacturing industry, which was not yet dominant, but with the greater mechanisation of agriculture, the need for skilled workers grew here as well. In the mining industry, the rising gold prices of the 1970s meant that many white workers could be transferred to actual management positions, which contributed to breaking down the resistance against professionally training black mine workers, and thereby paved the way for abandoning “the job colour bar”.

This development took place at the same time as growing capital concentration allowed the dominant conglomerates to expand across economic sectors. During this process there was a partial merging of Afrikaner capital and British capital, and Afrikaans-speaking economists and business people in management positions gained greater insight into the universe of English liberalism attitudes, including greater understanding that the lack of dignity and the absence of all social and political rights for the direct manufacturers of the main portion of the country's assets also created irresponsibility and antipathy toward product and productivity development.

Lipton's line of argument assumes that large-scale capital was increasingly worried, not only about apartheid's residual economic irrationality, but just as much about the more "external" costs, e.g. the growth of a gigantic bureaucracy and security apparatus, increasing political instability, the breakthrough in international sanction policy and the lack of international confidence, resulting in declining investment interest.

Her fundamental 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.

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.

 

Lipton's thesis in Capitalism and Apartheid was that apartheid contributed to economic growth in some sectors during certain periods, but most often stunted economic expansion in the most important sectors, and she attempts to prove the veracity of this through a study of the effects of apartheid on different sections of the economy.

Each of these are analysed individually, including agrarian capital, mining and manufacturing capital and the white working class. The dialectic interaction, or struggle, between these forces is, on the other hand, not studied quite so carefully. Lipton's analysis is in some ways comparative to Stan­ley Greenberg's from 1980.[13] 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.

Greenberg stood for a more realistic tendency in relation to early radical structural historical research, and his view of the role of the 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 disagreed with him.

 

Although Lipton's analysis methodology bears certain characteristics of structural Marxist inspiration, it rests on solid fundamental liberal views, and seeks to confront the early radical structuralist view of British mining capital as being a party to the development of apartheid:

“This study has shown that major apartheid policies reflected the interests of white agriculture and white labour and were often opposed by urban and mining capital.”[14]

Agrarian capital, interested in labour control and limiting the competitiveness of black agricultures, is viewed as apartheid's primary support group. White workers were junior partners in an apartheid coalition, as they:

“...actively promoted many apartheid policies, particularly the job colour bar. This policy was costly to white capital (and to black labour), but benefited white workers, whose interest thus reinforced their prejudices.”[15]

In some opposition to common liberal analysis, Lipton assume that preferred material interests and racial attitudes were equally compelling in making racial segregation appealing to white workers. On the other hand, she has greater understanding for the mining companies for whom “therefore, apartheid was a more complex equation.”[16]

The period Lipton defines as “Partial erosion of apartheid,” is characterised thus:

 “...what is actually happening is a contradictory and confusing mixture of reform (particularly in the socio-economic sphere) and maintenance of apartheid (especially politically).”[17]

Lipton does, however, see a certain ambivalence among the owners of capital towards large political changes that might have affected the management roles of whites and security, but the active conservative power emanated from the white worker class.

 

Lipton's analysis also includes the political splits within the power bloc, which she declines to reduce to a class struggle. Due to the influence of Afrikaner nationalism, she does not actually view the apartheid state as a capitalistic state because “political power lay with the Afrikaner nationalist alliance in which, initially, white agriculture and labour were dominant.”[18] Therefore, apartheid did not exist only to serve class interests in the normal sense. On the contrary, during the last years of apartheid the opportunities for reform were strengthened at the same pace as large-scale capital class interests infiltrated the National Party.

 

Lipton's book must have had a stimulating effect on both Marxists and liberals, in that she partially attempts to undermine and partially adopts aspects of both research trends. The liberals can be pleased with her attack on class reductionism, while the Marxists must acknowledge her structural materialism. However, it is clearly stated in the final chapter on the economic historical debate that her perspective contains a confrontation with the radical school:

“...a Marxist analysis cannot account for the importance, autonomy and effectivity of ra­cial/ethnic factors, nor for the power of white labour and the bureaucracy.”[19]

Although the radical school has many examples of both reductionism and narrow functionalism, it developed into deep versatile approaches with consideration for human nature. Lipton dissociates herself with many years of intense debates between Marxists. Still, she actually attributes perhaps just as much to Marxist-inspired historical research as she detracts from it.

Lipton's study also includes the government bureaucracy, which she attributes with its own relatively independent interests:

“Pari passu with the growth of the state sector, a large bureaucracy emerged, with interests and views of its own. It played a major role in the struggle over apartheid.”[20]

The power position of the government bureaucrats,[21] as well as the government’s alleged continuing conflict with the business world, lead her to conclude that Weber-inspired government theory is more applicable than Marxist in the case of South Africa. That is in my opinion not a correct assertion. Lipton is in the right that some radicals tended to view the government as a “black box” with no interests or drive of its own. However, Lipton to a large degree overlook that the later revisionist analyses focused a great deal on internal splits and conflicts of interests within the white power bloc. Yudelman, who is close to radical viewpoints in some of his works, thus endows the government with both an inner dynamic and its own interests. James and several others do the same.[22] Rather than cross over into Weberism, these analyses expand Marxism's theoretical borders, while retaining a radical capitalism-critical analysis foundation. It would seem that some newer studies agree with Lipton’s methodological approach though.[23]

 

Even if it could be challenging to investigate who was first with a mature analysis of fractions in capital and state, I am not sure how constructive this part of the debate would be. The radical assessment; that later liberals took notice of and build on radical research results can in my opinion not be denied and there is nothing strange or wrong about it. I hope that history is a cumulative science. Nobody is denying that liberals like O’Dowd rather early saw reasons for the erosion of apartheid, but it cannot be denied either, that many liberals worked close together with the system right from “protective segregation” from early 1900th through every kind of official commissions reports until 1948, and even during the development of the full police state in the 1960s, or that the lack of results of pragmatic liberalism called for analyses more useful for the suppressed and exploited majority.

 

Lipton’s book raised the main liberal objection to the radical school fairly convincingly, i.e. that apartheid policy has historically set inappropriate limitations on the free development of capitalism, which “led to recurrent attempts to erode apartheid by capitalists.”[24] In Lipton's opinion, the capitalists were forced to adapt to the racial realities throughout most of the twentieth century. Other interests groups, particularly white workers and commercial agriculturalists apparently with better access to the government, were in a position to pass the expenses of apartheid on to the mining companies and manufacturers. Lipton writes that the latter: “...did not need, and indeed opposed, most apartheid labour po­licies”.[25]

 

Lipton's study of the white agriculturalist position

The primary sectors, agriculture and mining operations, dominated the South African economy at least until a point in the 1960s. Farmer motives and share in the distribution policy remains a little unclear, as Lipton never clearly defines the relationship commercial agriculturalists had with capitalism. If they became modern market-capitalistic farmers early in the twentieth century, their apartheid support must somehow be in opposition to Lipton's general thesis. Lipton partially clears up the problem by describing white agriculture as outmoded: “...a system which, though capitalist, had features which could usefully be called feudal.”[26] Later she sets the farmers' dependence on labour repressive systems up against the presumably more modern attitudes of the mining and manufacturing industries.[27] She apparently does not view white agriculture as actually being capitalistic.

 

The white farmers were among the leaders in the implementation and defence of the segregation policy, such as the 1913 Land Act that reserved the main portion of the land for whites, as well as the passport laws that restricted black worker stays in urban areas. These measures, of course, eased access to, and limited the costs of, African labour, just as they prevented market competition from black farmers.

Lipton, however, notes one important exception from agriculture's support of apartheid. The farmers renounced ”the job colour bar”, which benefited the employment of white workers and excluded Africans from skilled jobs. Excluding the majority of the population from competition for skilled work, it increased production costs for skilled labour. White agriculturalists, however, to some degree managed to avoid this dysfunction in apartheid and a great deal of skilled, even actual management, functions in agriculture were increasingly performed by Africans and coloureds as early as the period prior to WWII, despite high white unemployment. One of the results was that more poor whites were forced into urban areas. When they themselves had got rid of expensive white labour, the white farmers supported their former white farm workers in their fight for job bars in mines and industrial sectors where the white workers had to be protected from "unfair competition" from arriving black labour considered less natural in urban areas.

Lipton points to the extent to which white agriculturalists, presumed to be the cornerstones of apartheid, were in a position to pass the costs of apartheid on to the real capitalists. She views this as an important indication of their political power. She sees another sign of the powers of the farmers in their ability to ensure favoured access to freed unskilled black labour. The passport laws were put through in such a manner that the Africans were bound to the rural areas, and these laws kept black wages low by hindering wage competition from the mines and urban businesses.

Beginning around the 1960s, however, new technological opportunities increased the capital intensity and degree of mechanisation of agriculture, creating larger units, which in turn led to important changes in labour market policy. First, it limited the need for vast amounts of unskilled workers. Second, it led to an increasing need for more skilled educated with all that involved for the basically feudal lord-servant relationship in rural areas. Third, the greater capital intensity meant that wages now constituted a smaller portion of total production costs. Finally, the farmers' interest in the domestic market grew, and they were therefore more prepared for the rise in the general wage/purchasing power level that the manufacturing industry and trade had already needed for some time.

Lipton shows that this development was gradually followed by changes in attitudes within the South African agrarian union, SAAU, after the 1970s, such that the union carefully began to plead for wage increases, improved working and educational conditions, and increased mobility. In its recommendations to the Riekert Commission hearings in 1979, the SAAU supported doing away with influx control, of which it had been a warm supporter throughout many years.[28] The growing influence in farming from large diversified companies like Anglo-American and Rembrandt is also noted.

Yet Lipton can see that there are diverging opinions between farmers too on these matters. The less effective agriculturalists on marginal land, namely in Transvaal, never gave their support to reform policy, but on the contrary continued to be important support for The Conservative Party and the HNP, Herstigte Nasionale Party.

 

The analysis of the conflict between capitalism and apartheid in Lipton’s liberal work is founded on a materialism, which in power reaches the level of Davies and O'Meara's early Marxist structuralism.[29] The manufacturing industrial and commercial capitalists were, regardless of their personal ideological convictions, in the end forced to oppose apartheid on material grounds:

“...their interests, and the costs (and interconnectedness) of apartheid labour policies drove them to oppose these policies whether or not they were liberal.” [30]

The conflict between the capitalists and the apartheid state became topical during the 1970s because growing capital intensity now united the various business sectors.[31]

 

Lipton's study of the mine owner position

Mining capital constitutes a big problem for validity, logic and cohesiveness in Lipton's argument. It is difficult to present a fundamental contrast between capitalism and apartheid without including this very central sector. Lipton takes different positions on the mining industry. One the one hand: “...mining capital were more complex.”[32] Therefore, it is viewed as difficult to place. On the other hand, this sector is presented as unique due to its great dependence on foreign African labour: “...the gold mines were not typical of the South African economy.”[33] However, she finds that “It is curious,” that the most profitable mining companies affiliated themselves with the industry sector's general demand for continued wage freezes,[34] and she finds that “the policies of progressive mining capital since World war two are puzzling,” because the mines did not adhere to the manufacturing industry's scepticism towards race policy.[35]

 

The mine owners supported the Land Act of 1913 and the passport laws, as did white agriculturalists, which left black labour abundant, easy to purchase and without legal rights. They forced their workers to live in compounds, and with a heavy hand oppressed the periodic attempts at creating unions.

Lipton's analysis shows that the mine owners, in contrast to the white farmers, could not escape the ”job colour bar” race barriers that the white unions, in her opinion, had forced upon the mines. Repeated attempts by the mining companies to undermine the job colour bar led to heated conflicts with white workers. To Lipton, the fact that the mines challenged the job colour bar is an indication of the high costs of this arrangement. The strong influence of white labour interest organisations within the Pact government after 1924, however, forced the mine owners to come to terms with the situation.

According to Lipton's explanatory model, this had significant consequences for the entire labour market policy. The fact that the mines could not use blacks for skilled work contributed to a further continuation of the migrant worker system, because employers only develop an interest in a permanently residing, family-based labour force with low turnover if they are to invest in the worker's education as well.

In Lipton's opinion, this stands in contrast to the white workers’ success in job security and the agriculturalists securing access to black workers, and shows that the mine owners had less political power than would be expected based on their dominant economic position, measured in their contribution to the GNP, tax yield and foreign exchange earnings. Her argument is not that the mine owners were completely powerless, yet they most often lost in matters where they stood in opposition to local white farmers or white workers, whose national interests had prominence in the government.

 

During the 1970s, the Chamber of Mines labour market policy began to shift. The mine owners renewed their pressure against the job colour bar due to an acute shortage of skilled workers. They also began to work directly toward making a larger portion of the labour force permanent residents, and they supported the secondary industry demand for socio-economic reforms, including labour mobility, higher wage levels, union rights, and later on, political rights as well.[36]

However, attitudes changed at a slower tempo in the mines than in the secondary industry. Above all, the migrant worker system remained completely intact for a very long time. Lipton points to the dividing lines within the Chamber of Mines between progressive companies that began to come in line with the manufacturing industry and trade on one side, and conservative companies such as Afrikaner-dominated Gencor and British Goldfields who had long been hostile towards black unions. Nonetheless, the tendency from the mid 1980s clearly indicated a change in attitudes, in contrast to apartheid policy.

 

It seems to me that Lipton, in her scepticism towards radical indifference to divergences between groupings of capital, does not pay enough attention to for instance O'Meara's well-known work on this subject.[37] In the end, the mining capitalists are to some degree pardoned by Lipton for the job colour bar, the white mine workers forced upon the sector against its will, and which was always the greatest threat to the profitability of the mines.[38]

Driven by the irrational measures forced upon them by stronger groups, the mining capitalists were apparently forced to introduce a maximum average wage for African workers, build closed compounds to store labour, support restrictions that made it impossible for the Africans to provide for themselves by market-oriented agriculture, back taxation designed to force them into contract work, and brace influx control to regulate the flow of black labour.[39] Yet Lipton does not in the book attempt to document her assertion with a more in-depth historical economic analysis of the profitability of the mining industry.

 

Lipton's study of the manufacturing and trade sector position

The secondary and tertiary business sectors were, in Lipton's opinion, open opponents of race policy as early as the 1920s, which was already apparent in the establishment of the employer organisations Federated Chambers of Industry, FCI, and Associated Chambers of Commerce, ASSOCOM.[40] Their futile pressure for reform concentrated on specific aspects of apartheid, first and foremost the job colour bar and the related matter of black access to professional training. Enduring strife played out between employers and white unions, who were supported by the Afrikaner nationalists and the English-speaking Labour Party.

Small-scale, urban-based employers could not circumvent the job colour bar to the same degree as the white agriculturalists, but it did, however, happen to a greater extent than in the mines, partially due to the large numbers of small companies in those sectors mentioned and partially due to less effective white unions, in contrast to the mines. Mechanisation in industry established a grey area with semi-skilled work, where the work process was frequently divided and redefined. The trend was self-reinforcing in that the employers developed an interest in stabilising their black workers and reducing the turnover.

The urban-based employers did not have to force the blacks to work for them. On the contrary, the goal of the passport laws was to prevent the blacks from overrunning the urban areas where wages were higher than in mines and agriculture, and life felt a little freer. The passport laws led to periods of labour shortages in the urban areas. The employers in the urban areas, according to Lipton, also supported a general increase in wages because that would help productivity. Some employers also supported the recognition of black unions in order to create an allied force in the fight against the job colour bar, and to improve their communication with workers. Certain employers started to recognised black unions as early as the 1930s and 40s.

Lipton believes that organisations such as the FCI and ASSOCOM, which defended a progressive policy in the matter of race, represented the majority of employers. More marginal, less effective, employers such as those represented by the Afrikaanse Handelsinstituut, AHI, were against reforms. Yet they were politically influential due to their close ties to the National Party.[41]

Lipton can see that even though progressive employers defended reforms of both the labour market legislation and of some socio-economic spheres, there were other aspects of apartheid that they did not challenge. She openly admits that almost none of them questioned segregated residential areas, educational segregation and the exclusion of blacks from political rights, even though they did not openly support the introduction of such measures, either. Their attitudes were often contradictory and ambivalent, as is most clearly illustrated by the matter of relocation control. Many employers shared the fear of the white urban population of being overrun by the influx of Africans, and feared a greater number would threaten white security and bring about unrest, criminality and revolution.

 

Lipton's study of the white worker position

The main culprits in Lipton's scenario are the white workers. Their victories within job reservation, as well as wage and employment privileges, were a major obstacle to free economic growth and forced the mining companies among others to participate in race policy. They are the irrational, subjective element that forces Lipton to retreat slightly from the deterministic materialism. Even though Lipton acknowledges that race policy promoted the material interests of the white workers, she views prejudices and status as the key driving forces. The white workers' fight for their interests is first and foremost “gratifying their racial prejudices.”[42] While she expresses great understanding for the limited, political and economic manoeuvring room the mine owners had, she is not really able to find a comparable “emergency” in the case of the white workers, for example based on the attempts of capitalists and the governments to hold down wages with the help of cheap unskilled labour prior to 1924 and in the first half of the 1940s.

 

Reform policy as an expression of capital's victory

In Lipton's opinion, conflicts increased between industry and government over labour market and related socio-economic policy at least from the time the NP took over power in 1948. 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 an indication to her that political power in South Africa was not a reflection of economic power. It was the other way around. A viewpoint that separates her from the radical historians.

Lipton believes that it was as early as the 1970 election when Verwoerd’s successor, Vorster, beat the HNP, that the path was paved for the first real government concessions to the business world. She bases her assertion on small alterations to the job colour bar, small changes in access to education, and formal expansions of the blacks’ right to own property, etc., without clarifying how minimal these changes actually were during the first several years. Lipton believes that these political developments contributed to a growing political debate and black activism, including the strikes of 1973 in Durban and the Soweto unrest in 1976, which, for its part, in turn pushed the capitalists towards more extensive reform plans.

The business world’s political wishes were listed in a series of documents such as the Business Charter of 1985, signed by most of the business world's organisations. The fact that this line was now even supported by conservatives within the AHI and the Chamber of Mines meant that the pressure became more effective. The capital interests that had previously been split became more convergent.

Lipton views the limitations of the reform policy up to the early 1990s as a result of the continuing weakness of the capitalist's position. They still had the white workers against them, who now to a great extent had been transformed to a bureaucracy more or less within the government sector, as well as the NP’s political apparatus that sought to retain its grip on power.

 

Problems in Lipton's analysis

Lipton's Capitalism and Apartheid is clearly one of the most qualified attempts within the last thirty years to set economic growth and racial discrimination against each other as incompatible in modern South African society. The timing of the book's publication is important to its evaluation. Partly as a result of the combination of suppression and rapid growth of the apartheid economy during the 1950s and 60s, the liberal defence for capitalism as promoter of political change had, since the late 1960s, to some extent been in a defensive position. At the same time, the intellectual Marxist perspective gained great cohesiveness and influence within university circles.

With the South African social order being increasingly besieged by the black resistance movement and by international solidarity, the business world, supported by liberal academicians, attempted to separate the economic and political spheres and underscore the business world's critical stance towards apartheid.

The appearance of Capitalism and Apartheid must therefore be viewed in this historical context. The book was part of the prelude to new liberal self-confidence in South Africa, not without inspiration from the emerging global counter-offensive from new liberalism and neo-conservatism, and the increasing problems of “the real existing socialism” of the Eastern Bloc, but primarily because of South Africa's complex internal crisis. The new vitality in liberal research was already apparent with Charles Simkins’ lectures for the South African Institute of Race Relations and the collective work of Jeffrey Butler, Richard Elphick and David Welsh on South African liberal perspectives, Democratic Liberalism in South Africa.[43] In a newspaper review, Welsh praises Lipton’s work and, among other things, calls it: “...perhaps the most devastating critique of the neo-Marxist position yet to appear.”[44]

The advance expectations of Lipton's work were great. She had previously conducted thorough studies of agricultural development within South Africa, and had attacked the Marxists right at the heart of the problem, namely economic growth contra social equality, a situation from which other liberals had retreated.[45] She had already managed to lay the foundation for her argument that economic development in South Africa had improved the living conditions of the blacks over time in a debate that is somewhat reminiscent of the long-term strife between historians in England over the effects of the industrial revolution, based on to what extent that led to impoverishment or progress.[46]

 

Merle Lipton’s grand overview of the various economic sectors throughout the entire twentieth century gets its strength from an engagement in the contemporary debate of the time. Some colleagues have criticised her work for being not particularly source-close, her interview methods have been seen as unclear, and her arguments directed against phantom positions.[47] In the debate around Liptons’ book, she has also been accused by many reviewers, including myself, for using primarily secondary sources, for not using some important journals, and for not referring to contemporary works of radical researchers. During my re-reading and my own discussions with Merle Lipton, I have realised that most of these allegations were actually both wrong and unfair. Liptons work is build on deep, professional studies and it still stands as a major contribution to research in South African economic history. I disagree fundamentally in Lipton’s conclusions, but the problem lie mostly in the interpretation of the data, not in Lipton’s source knowledge.

 

Lipton is not placing much significance to the very good 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 bloc, 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 were even more illogical and contradictory than Lipton are willing to recognize. Capital was still interested in restrictions in the workers negotiation power, but at the same time afraid of a growing number of wild uncontrolled strikes with no responsible counterpart. They were indeed interested in low wages, but 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 that Lipton recognises the need in SA business for globalisation but at the same time underestimates the importance of the treat of sanctions.

I also believe that Lipton’s recognition of the state-supported corporate sector is 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 satisfactory by the author.

 

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.

Lipton bases her argument on a solid study of the Chamber of Mines’ attempt to abolish or limit the job colour bar. Yet there are connected historical studies that Lipton strives to avoid: the history of mining’s demands for new passport laws; their demand to make breach of contract (by more or less forced labour) a penalised criminal offence; their demand for undermining of and espionage against the labour unions 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 19^th century.

The validity of Lipton's 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 radicals believe they can prove, her thesis on the business community resistance to apartheid can only be partly substantiated. If Lipton could show that the job colour bar came prior to, and founded, the histories mentioned above, her thesis would be proven to a lager extent.

 

Greenberg and Helliker, among others, have accused Lipton’s book for lacking theoretical consistency.[48] Lipton thus argues that the Chamber of Mines attempted to compensate for losses from the job colour bar by supporting the government’s labour repressive practices. But why should companies operating on principles of profitability not attempt to lower wage costs for the black labour force under any circumstances, regardless of more or less unnecessary costs to the white workers? With the international gold price fixed in advance, and very little interest in building up a domestic market, mining capitalists had interests in both the abolition of the job colour bar and weakening the black power position in the labour market. Therefore, there is no reason to be as surprised as Lipton 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.[49] 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.

 

Lipton thinks that the mining industry was forced to subordinate itself to government policy, even in its most important areas of interest. Capital can make recommendations, but the government holds sway.[50]

However, it is only through limiting the explanation of political power to the public political level and by underemphasising mining capital's political economical significance that it become easy to prove such a point. On the structural level, Lipton to some degree neglects to include basic government/capital relationships in her deeper investigations. As regards the colour bar, many of the costs were quietly reverted back to capital, including the mines. Even though the mines had job reservation, they were widely exempt from the burden of “civilized labour policy”, which in other sectors ensured an even greater level of white employment with good wages. The mines held the exclusive right to bring black migrant workers in from abroad, and they were not forced to subordinate themselves to the wage determination of the industrial council system.

 

Lipton’s depiction of the manufacturing and trade business resistance to apartheid is concentrated on the discussion of job reservation reform. She treats the business world position on the African union negotiation opportunities somewhat coldly, compared to the overall analysis. She writes that commercial interests were split on the union questions, but she emphasises that “there always were employers who favoured recognition.”[51] During the period following Shar­peville, when people were “security conscious,” business people lost interest in the matter of recognition, yet it re-emerged during the 1970s when the split among employers re-emerged and when “progressive capital” finally got the upper hand, the black unions won recognition.[52]

A favourable view of, and a great deal of sympathy for, private business is necessary to fully accept Lipton's 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 workers 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 in Lipton’s book for analyses on the lack of agreement between statements and action in the business world. Seen from a radical viewpoint the task of the established state to some degree was to look after the overall interest of the capitalist system. It might have been seen as the duty of the state to take the blame, so capital fractions could keep their back free. Lipton does not really consider this possibility.

Of course mine owners would have liked to use only cheap black labour, but would that actually have been less discriminating? After the Rand Revolt and from 1924 with the establishment of the Pact Government, the 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.[53] The rapid growth in the manufacturing industry throughout the 1960s would perhaps have been less confusing to Lipton had she recognised the scope of the ties the business world had with the racist regime. In one passage, Lipton admits that:

“However, even progressive capital shared the belief that white hegemony was necessary for politi­cal sta­bility, the precondition for both economic growth and personal security.”[54]

However, the recognition of this fact apparently has no consequence for her attitude towards the relationship between capitalism and apartheid. The fact that owners of capital from various economic sectors never mounted a collective mass attack on the migrant system, never seriously challenged the reservation/Bantustan system, and never insisted on full civil rights for blacks did not challenged Lipton's analysis. By focusing rather narrowly on job reservation, Lipton was able to persevere in an argument that would have been difficult to defend had greater consideration been shown for the total historical reality.

Capitalism and Apartheid builds on the conceptual separation of capitalism and apartheid. Capitalism stands on one side of Lipton's universe, isolated and separated in the various sectors. On the other side is apartheid, “...the system of legalised and institutionalised race discrimination and segregation,” pushed through by autonomous government power.[55]

 

Why is it that the influence of the mining industry and the rest of the business world on political life is most often played down, even though the opportunities for exerting this influence was always present on the structural level? All the while, the mining conglomerates have always been among the handful of companies that have almost entirely dominated Johannesburg's stock exchange. Anglo-American alone controlled more than half of all stock on the JSE. In the media and the business world itself, with a few exceptions such as the Urban Foundation, political power has been defined as the ability to win in public debate and achieve ones goals in full openness. Very open influence from the business world was not acceptable to the government of a system where the wage earners, despite everything, had more votes in the elections than the employers. It has been advantageous for the system’s cohesive power, i.e. both the business world and the government, to portray the vast business world as one interest group among many others that was subordinate to policy.

 

The argument for the progressive role of capitalism started long before Lipton’s book of course.[56] The way I view it, it has nevertheless been proven beyond any reasonable doubt that the South African business world had a great share of the responsibility for the oppressive system.[57] Government power and apartheid were largely formed by economic forces, including the mining companies, the white unions, Afrikaner business people, white commercial agriculturalists, and even semi-progressive trade capitalists. Capitalism and apartheid were intricately inner-woven in South Africa.

Even if apartheid was not fascism, there were many common elements. Both systems were state terrorist solutions, necessary to stabilise a capitalism threatened by social dissatisfaction. In the case of apartheid, the racial split of the working class made it possible to maintain a limited parliamentarian system for parts of the population. Only when SA capitalism had developed to a level where it became possible to satisfy larger parts of the black population could the racial-social repression be reformed.

Lipton’s analysis methodology pulls apart the pieces of history without putting them back together properly, and therefore is not well suited for a satisfying overall picture of the social processes in history.

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 his Manifesto.[58] The disagreement occurs when the consequences, expenses and injustices of development become clear.

It still seems to me that Merle Lipton is somewhat simplistic and deterministic in her view of the modernising effects of capitalism. There is a prize for industrialisation and modernisation and it is always the weakest who is paying the 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. In my opinion, some of the choices Lipton made for example on the question of sanctions were problematic.[59]

Lipton support “the capitalist system” in a “social democracy” form, and she is separating herself from Thatcherism for example, but her actual work is, in my opinion, a support for neo-liberal solutions with almost no focus on their negative social consequences. Even if Lipton does care about people killed, tortured and deprived of their property during apartheid, and even if she has made critical studies on the mining industry,[60] her main concern is not ordinary people extra-exploited by apartheids economic mechanisms.

 

The black population’s resistance struggle against apartheid and capitalism has not really been an integrated part of Lipton's view of history or capitalism. Black discontent and protest is mentioned, yet never as an integral part of the book’s 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 Lipton’s capitalism logic and she has not much understanding for the strong mix of national, ethnical and social mobilisation that was necessary to remove apartheid. Economic liberals still do not recognise this and they did not attribute much to it. I guess that Lipton has never given much credit to the use of history for creating the necessary idealism for liberation struggle and solidarity, but history is always used, so to some degree, the writer simply have to be aware, by which side she want to be used.

 

The problems of genuineness of reforms during late apartheid 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, where it became clear that the tricameral parliamentary reform only had resulted in an indomitable, incredibly broad popular uprising, there was, not only in business or between 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 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.

Lipton’s basic argument could also be turned around of course. Why should capital be against change of apartheid, if they were reassured that the basic structure of exploitation (still predominantly along race lines) would be kept intact. For most black people the fight for social justice was just as important as the race struggle, and local tendencies to amounting indifference with the democratic process at have probably been caused by disappointment with growing economic inequality.

 

In my estimation, Lipton in her work with Capitalism and Apartheid was much inspired by radical research methods, Marxist analysis categories, and a somewhat determinist materialistic structuralism, yet she has done her work based on a basic liberal viewpoint, which makes her study unique, noteworthy logical and exciting, but also somewhat narrow and strangely distorted.

I recognise that most of the material and facts put forward by Lipton are quite thoroughly researched. My main problem with Capitalism and Apartheid lies with the choice of sources, the angle, and the actual political and social effects of the book. That it is the interpretation of the facts that determines and parts the results of research is hardly surprising to a historian. Focus varies of course depending of whatever the important thing for the author is to improve relationships by harmonizing capital-worker relations, or to gain more social justice using history for mobilisation.

I like the book because it confronts the main structural problems in South African economic history in a direct and materialistic way. I admire Lipton’s will and courage to confront the radical structuralists on their own terms. I dislike the book because it has been useful to forces that did actually not want to promote the rights of the underprivileged in South Africa. They got an argument for “letting the market do the work”, not recognising the necessity of a militant, fully fledged social and national liberation struggle, without which the prominent conditions for building the new South Africa would not have been reached. That the ANC government has later misused these conditions for a neo-liberal economic policy is another matter.

Lipton has in her counter critique accused the radicals for lowering the professional standards by an unbalanced approach that include over-referencing and a self-congratulatory, repetitive and sectarian work stile, and for imposing their own exclusive hegemony. Examples of such conduct are not hard to find, but it is definitely just as common between liberal scholars.

Yet as a whole, Lipton's research results have had great significance. They showed that owners of capital cannot all be measured by the same yardstick as supporters of apartheid and racism. Lipton's work also challenged the radical school to an even greater extent to include studies of government administration and legislation, race attitudes and ethnicity, ideology and gender in a renewed non-reductionist Marxism.

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 a continuing social crisis, where the African workers and unemployed could challenge also the more fundamentally economic assumptions and norms, liberalism in South Africa can hardly afford to leave these questions unanswered. Merle Lipton's work answered some questions concerning apartheid, but it did not give a full description of the racist South African capitalism. Later attempts from Lipton have been along the same methodological lines.[61] Nevertheless, her work is always rewarding to read and her renewed studies on the subject are highly welcomed.

 

The problems of crises and change in directions 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 more 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 Left now needs to develop new convincing explanations for why popular black activism should focus on socialist oriented reforms. If capitalism and race discrimination are not inseparable, then South African socialism’s most important rationale will have to be based on something other than basic anti-racism.

 

This debate has been quite ruff and liberals are right that engaged radicals often stroke a warlike tone in the attempt of mobilising the black workers. To the extent that this hostility was directed against supporters of apartheid, I sincerely hope that it was painful, but in the light of the victory over apartheid, it is of course easier to see that it was sometimes unjust to political liberals.

It is in this connection interesting to discover that many liberals, like Lipton, do not make much of an effort to distinguish between early liberal segregationist, well meaning political liberals (social democrats) economic liberalists etc. Actually, they use the most enlightened liberals to throw credibility to the whole lot.

Was liberal pragmatism harmful? Some of the conflicts in South Africa, which the liberals claimed they wanted to avoid, were necessary and unavoidable. They still are; which is exactly why this debate is still topical. The long academic strife between liberals and Marxists 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.