Customer Reviews

An Economic History of South Africa: Conquest, Discrimination, and Development (Ellen McArthur Lectures)

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This is an excellent survey of South African economic history, with an emphasis on developments after the discovery of diamonds and gold in the late 19th century. The narrative ends with the democratic transition in 1994.

As the book explains, gold mining was the driving force behind South Africa's skewed development. The need for cheap black labor led to racist legislation aimed at driving blacks off the land and making them dependent on employment in mines and on farms. Taxes levied on the mines paid for excellent infrastructure and for subsidies to white farmers; meanwhile, high tariffs nurtured manufacturing industries that fed the mines' demand for industrial inputs. These policies enabled whites to carve out a nice life for themselves on the backs of blacks and gold.

The system foundered when gold exports declined in the 1980s and South Africa's inefficient manufacturing sector couldn't export to take up the slack. The central problem was the reliance on cheap, low-skilled black labor: the domestic market for manufactured goods remained small, while high unit labor costs hobbled manufactured exports. Growth slowed and eventually turned negative, investment dried up, unemployment skyrocketed, and sanctions undermined the balance of payments. By the 1990s, the material basis for apartheid had collapsed.

Feinstein's book tells this fascinating story in clear, if dry, prose. Anyone interested in South African history or general economic history will enjoy it. However, readers unfamiliar with the basic concepts of national income accounting may find some sections hard slogging.