The South African Economy, 1910–90

389 Pages·1992·37.06 MB·English

by  Stuart Jones

THE SOUTH AFRICAN ECONOMY. 1910-90
Also by Stuart Jones and from Palgrave Macmillan
BANKING AND BUSINESS IN SOUTH AFRICA
The South African
Econont~1910-90
Stuart Jones
formerly Head of the Division of Economic History
University of the Witwatersrand, South Africa
and
Andre Miiller
Professor of Economics
University of Port Elizabeth, South Africa
Palgrave Macmillan
ISBN 978-1-349-22033-5 ISBN 978-1-349-22031-1 (eBook)
DOI 10.1007/978-1-349-22031-1
© Stuart Jones and Andre MUlier 1992
Softcover reprint of the hardcover 1s t edition 1992
All rights reserved. For information, write:
Scholarly and Reference Division,
S1. Martin's Press, Inc., 175 Fifth Avenue,
New York, N.Y. 10010
First published in the United States of America in 1992
ISBN 978-0-312-07507-1
Library of Congress Cataloging-in-Publication Data
Jones, Stuart.
The South African economy, 1910-90/ Stuart Jones and Andre MUlier.
p. cm.
Includes bibliographical references (p. ) and index.
ISBN 978-0-312-07507-1
1. South Africa-Economic conditions. 2. South Africa-Economic
policy. I. MUlier, Andre Leodolff. II. Title.
HC905.J66 1992
330.968'05-dc20 91-33633
CIP
Contents
Preface vii
Acknowledgements ix
1 Introduction 1
I Laying the Foundations of the Modern Economy, 1910-33
2 Population and Economic Growth, 1910-33: A Survey 19
3 Agriculture, 1910-33 26
4 Diamonds, Gold and Coal, 1910-33 45
5 Industrialisation Begins, 1910-33 63
6 Transport and Distribution, 1910-33 77
7 Banking and Finance, 1910-33 94
8 External Trade and the Balance of Payments, 1910-33 113
II The Open Economy, 1933-61
9 Population and Economic Growth, 1933-61: A Survey 127
10 Agriculture: Beginning the Transformation, 1933-61 134
11 The Expansion of Mining, 1933-61 150
12 The Industrial Transformation of South Africa,
1933-61 167
13 Transport and Distribution, 1933-61 187
14 Banking and Finance, 1933-61 199
15 External Trade and the Balance of Payments,
1933-61 212
III The Modern Economy Takes Shape: since 1961
16 Population and Economic Growth since 1961: A
Survey 227
17 Agriculture: Completing the Transformation, since
1961 236
18 The Diversification of Mining since 1961 257
19 Industrial Expansion and Slowdown since 1961 278
20 Transport and the Retailing Revolution since 1961 305
21 The Financial Revolution since 1961 322
v
vi Contents
22 External Trade and the Balance of Payments since
1961 341
Notes 358
Select Bibliography 361
Index 365
Preface
This work is intended to be an introductory textbook to the study of
the South African economy in the twentieth century. It is not in
tended to be a definitive work in the manner of a Cambridge Econ
omic History. It does, however, attempt to bring the story up to date
and to provide a survey of developments since Union in 1910. It is not
intended to be a social and economic history of South Africa. We
have, therefore, chosen to focus upon the economy and to avoid, as
far as possible, being drawn into the ideological disputes that abound
on the question of South Africa and apartheid.
We considered a factoral approach to the study, but rejected it on
the grounds of impracticability. It would be awkward and cumber
some to attempt an economic history of South Africa based on capital,
labour and land over an eighty-year period, and well-nigh impossible,
given the way the radical left personifies the use of the word capital
into some sort of bogey-man. Other works on South Africa, such as
that by Jill Nattrass, have a marked bias to labour, which is given
disproportionate treatment in her book. The very title of Merle
Lipton's book, Capitalism and Apartheid, tells us at once what its
perspective will be. Its primary aim is not to examine the evolution of
the economy, but the evolution of capitalism and the practice of
racial segregation since 1910.
We decided therefore to adopt a sectoral approach to our study
and to approach it through the primary sector (agriculture and
mining), the secondary sector (manufacturing), and the tertiary sec
tor (the business services such as transport, distribution, finance and
foreign trade). The dictates of space obliged us to exclude the other
services, such as those devoted to education, to health and welfare,
leisure services, domestic service and the whole range of government
services that regulate a modern economy. All of them make import
ant contributions to the economy, but not all are of equal import
ance. We have chosen to emphasise transport, distribution and
finance, because they play such a key role in the development
process. Transport and distribution are crucial. Without these ser
vices, development simply cannot take place. Their importance has
been highlighted in recent years, too, by the heavyhanded action of
dictators like Nyerere in Tanzania, who very rapidly destroyed an
efficient distribution and banking system, and Kaunda in Zambia,
vii
viii Preface
who has done much the same there. The wars in Mozambique and
Angola have shown how fragile a transport system can be. The
damage done to wholesaling and distribution by African socialist
dictators has been immense and has brought enormous hardship to
their people. We wish to emphasise the importance of the distribu
tion system and to argue that its importance increases relatively, as
the economy grows larger and becomes more complex. In a techno
logical age, education is also becoming steadily more important,
though the direct benefits are more difficult to quantify. If we have
offended by omitting important services, we apologise. We would
welcome a book devoted to the evolution of the tertiary sector in all
its aspects.
One final caveat. Converting monetary prices into constant ones is
not an exact science and adjusting them according to retail and
wholesale prices is admittedly arbitrary. It is intended only to give a
reasonable impression of the real changes taking place in the South
African economy. Stuart Jones is responsible for these figures.
Acknowledgements
The authors would like to thank all those kind persons who assisted
with the typing of the manuscript and especially the two Pats, Pat
Brent and Pat King, who had to meet deadlines and decypher our
hieroglyphics.
ix