Hello, and welcome to part eight of Historyboffin’s
South Africa playlist.
In the second of our videos that considers
the period from 1910 to 1948, we look at the
extent to which the country’s economy developed
in the decades after union.
This was a time of industrialisation and growth,
and yet not everyone was to benefit from such
progress, which was to be expected given the
inequality and prejudice which had been built
into South Africa’s culture, society and
laws.
At face value there is no doubt that South
Africa witnessed great change during this
period.
Remember that up to 1867 South Africa was
regarded as an imperial backwater, with little
trade with the outside world, limited immigration,
and very limited investment.
However, mining had kickstarted the country’s
‘industrial revolution’ and this gathered
pace in the early twentieth century, despite
the negative impacts of the First World War
and the Great Depression.
Next, it was the development of secondary
sector industries, where raw materials were
manufactured into finished goods, that built
on the wealth generated by mines and allowed
modern infrastructure, production processes
and trade to develop.
By the 1940s South Africa was truly an industrialised
country.
The three industries this video considers
are the mining industry, specifically the
gold mining industry; the manufacturing industry,
which considers everything from steel production
to machinery and consumer products; and agriculture.
These were arguably the three key sectors
of the South African economy during the segregation
era, with substantial output and employment.
At face value, the mining industry went through
significant expansion during this period.
There were downturns, of course.
The 1922 Rand Uprising, when white miners
went on strike and then started an armed insurrection
that led to dozens of deaths, led to a short-term
fall in output.
However, the Great Depression led to huge
demand for ‘safe’ commodities like gold,
instead of stocks, and thus the mining industry
sheltered South Africa from the worst effects
of the Depression.
In fact, exports of gold generated huge amounts
of income for the country, which gradually
stayed in South Africa as investment in the
country became more popular.
The importance of mining, and the income it
generated, stimulated massive investment in
other industries that supported it - from
electricity to railways, steel and machinery
production to banking, and a whole host of
other goods and services.
Finally, over time taxation of mining firms’
profits became a major source of government
income.
By 1940 the government was taxing the industry
to the tune of £22 million, which enabled
it to increase the size of the public sector,
invest in infrastructure, and subsidise other
sectors, notably agriculture.
The mining industry may have generated the
initial capital for investment in manufacturing,
but over this period the factories and mills
that manufactured goods grew to become a significant
contributor to South Africa’s overall economic
output.
The Tariff Act of 1925 protected certain domestic
industries from international competition,
and encouraged global firms to build and produce
in South Africa, rather than export to there.
Therefore, companies like Nestle, Ford, Dunlop
and General Electric all established significant
presence in the country.
Meanwhile, the South African government used
some of its tax revenue to establish state-backed
enterprises such as the Electricity Supply
Commission, ESCOM, and the Iron and Steel
Industrial Corporation, ISCOR.
These firms created significant domestic supply
of materials and power that enabled continued
economic growth.
However, manufacturing sector growth was always
limited to some extent by the small size of
the domestic market.
While some whites were beginning to develop
the wealth that allowed the purchase of consumer
goods, there remained many ‘Poor Whites’
- Afrikaner farmers and unemployed - who lacked
disposable income.
Meanwhile, blacks were underpaid and overtaxed,
meaning the vast majority of the population
could only purchase the most basis necessities.
The agricultural sector is arguably the most
interesting area to consider in terms of economic
progress at this time.
While there was growth, it was often dependent
on massive subsidies provided by the government.
The vehicle for this investment was the Land
Bank, set up in 1912 to provide subsidies
to those farms that wished to modernise.
The hope was that yield per hectare, in other
words the productivity of the land, would
increase, making South Africa more self-sufficient.
This approach failed, however, for two reasons.
Firstly, politicians aiming to solve the problem
of Poor Whites preferred employing more white
workers over investing in modern machinery
that would replace labour.
Secondly, the Land Bank’s attempts to modernise
agriculture often faced resistance from farmers
who refused to accept their time-honoured
practices needed to change.
Therefore, productivity remained incredibly
low, particularly when compared with other
large agricultural sectors such as those in
Argentina and the USA.
This meant that subsidies remained in place,
and became ongoing support for farmers who
refused to modernise and get to a point where
they no longer needed support.
In order to fund this, taxation on staple
goods increased, which hit the blacks the
hardest.
They paid the price of agriculture’s refusal
to change with the times.
Therefore, if we consider how much progress
South Africa’s economy experienced during
the segregation era, we see two sides to the
story.
Mining and manufacturing saw great progress,
while agriculture did not.
This simple continuum helps us visualise the
answer to a question that requires a judgment,
and allows an overall conclusion to be made.
For any evaluation questions this is a simple
yet effective way of planning, especially
under time pressure.
Detail could also be added to help plan the
paragraphs to be written.
Finally, it is vital to note that economic
progress was built on the labour of non-whites,
who were increasingly drawn into a migrant
labour system that gave them few rights, little
pay, and a lack of alternatives to working
for the ‘Baas’, the manager.
On land, in factories, and deep underground,
blacks worked long hours completing backbreaking
work.
There were thousands of deaths in the mines
each year, and work in manufacturing and agriculture,
while less dangerous, was still gruelling.
Furthermore, blacks found themselves hit the
hardest by taxation, which focused on taxes
on goods purchased, rather than income.
Economic progress came at a price.
I hope you’ve enjoyed this overview of economic
progress during the segregation era.
Thanks for watching, and please subscribe
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Next video we’ll consider the politics of
the segregation era, and South Africa’s
role in the Second World War.
