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From International Socialism (1st series), No.59, June 1973, pp.16-17.
Transcribed & marked up by by Einde O’Callaghan for ETOL.
One of the more striking features of the South African economy in the last 25 years has been the growth of the manufacturing sector. The pre-1939 economy, entirely dependent on mining and agriculture, has undergone a major structural change. According to the Johannesburg stock exchange, total market value of mining companies rose from R450 million in 1939 to R3,531 million in 1965. whereas the value of non-mining companies rose from R338 millions to R5,038 millions in the same period.
This ‘forced industrialisation’ was initially embarked upon in order to solve the ‘poor white’ problem, which had grown to embarrassing proportions in the rural areas of South Africa. The mining industry by itself could not absorb the surplus white labour being released from the land as a result of the development of capitalist farming practices in white areas.
Successive South African governments have encouraged manufacturing industries through tariff protection, subsidies and guaranteed markets, on the understanding that the widening opportunities of industrial employment were to be reserved for white ‘civilised labour’. In 1936 manufacturing output constituted less than 15 per cent of the total gross domestic product; in 1970 it stood around 25 per cent. Its gross value of output in 1965 was R3,600 million.
This ‘second industrial revolution’ achieved its stated objective of eliminating white poverty. In 1968 only one million whites lived on the land as farmers, out of a total population of four millions. The ‘revolution’ was also achieved by a systematic destruction of the traditional basis of African agriculture.
By a series of Land Acts, Africans were deprived of all but 13 per cent of the land area of the country, a large part of it dry and infertile. The imposition of taxes on a poverty-stricken population, resulted in a massive shift of Africans to urban areas.
The percentage of the African population in urban areas increased from 10.4 per cent to 40 per cent in the post war years to 1970, excluding Africans from outside South Africa. The white ruling class, in an effort to eliminate the ‘poor white’ problem, had created a large black proletariat, living in the shanty towns of Johannesburg, Pretoria, Durban and Cape Town. They worked in the new industries of engineering, food-processing, canning, textiles, motor, furnishing, and so on, as unskilled workers for low wages.
The early manufacturing industries were largely state financed from the lucrative taxes skimmed from gold mining. The steel, chemical and fertiliser industries (the latter to service the white farmers) began and remain under state control. However, the impetus and self-generating growth of industry was a result of the large gross capital formation within South Africa.
In the last 10 to 15 years fixed capital formation was consistently above 20 per cent of gross domestic product; a figure that is extremely high for a ‘developing’ country. The high figures were a result of the relative impoverishment of the African population.
In manufacturing, between 1957 and 1967 wages for whites increased from the equivalent of £75 to £122 per month, while that of Africans increased from £13 to £22. The average percentage increase in African incomes per head between 1948 and 1970 was just under five per cent, identical to the rate of increase in the African cost of living.
Overseas capital also played an important role in the second ‘revolution’. Between 1946 and 1969 a total of £1,700 million was invested in South Africa from abroad; two-thirds of it came from Britain. Whereas previously, gold and diamonds mining were the main magnets for foreign investment, manufacturing industries became increasingly attractive once the basic infrastructure had been constructed by the state.
The state, too, provided protection, subsidies and an assurance of high profits. Between 1963 and 1971 the number of British firms with subsidiaries in South Africa increased from 394 to 512.
To the architects of apartheid this phenomenal growth in industrial development was important in the struggle to make South Africa self-sufficient in the face of threats of economic boycott. At the same time it posed a major problem in the power it gave to increasing numbers of black workers, residing in the so-called ‘white’ urban areas.
An even greater threat was the gradual acquisition by the black working class of skills in the capital-intensive industries the white ruling class had created. The annual rate of fixed capital per employee grew from 5.1 per cent in the 1940s to 14 per cent in the 1960s.
The 1960 Verwoerd government pledged that it would ‘reverse the movement of Africans into the urban areas!’ It reiterated the Stallard dictum that ‘the native should only be allowed to enter urban areas, which are essentially the white man’s creation, when he is willing to enter and minister to the needs of the white man, and should depart therefrom when he ceases to so minister.’
Apart from abolishing the right of Africans to own homes in. urban areas, even if they were born there, the Verwoerd government further restricted the mobility of Africans by the extension of influx control. Africans were legally allowed to be in the cities only if they had a job; the ‘surplus’ were to be physically removed from the ‘white areas’.
Those who had jobs were deprived of all social and political, rights. The right to collective bargaining and to strike was abolished. In fact the Industrial Conciliation Act excluded the ‘native’ from the definition of ‘employee’ and barred multi-racial unions from the list of recognised trade unions.
At the insistence of white racialist unions, the government intervened in industries with job reservation orders, stipulating the jobs to be done by whites. At various times, the gold mining, building, textile and motor industries were compelled to demote Africans from skilled jobs.
In spite of government intervention, a survey on 11 manufacturing industries covering textiles, clothing, footwear, food, canning and furniture, revealed that the total number of non-white workers increased from 19,473 in 1953 to 160,438 in 1965.
To ‘reverse the flow of African workers’ the Verwoerd government also created the Bantustans. It was hoped that within these African ‘homelands’ economic development would provide employment to Africans. The failure of this policy is indicated by the switch in emphasis to the establishment of ‘border industries’ near the homelands.
These so called ‘border industries’ are in fact appendages of white urban areas. The industrial town of Rossyln, heavily financed by the government, lies only 12 miles from Pretoria. Hammarsdale is a natural extension of the Durban-Pinetown complex, while Rustenburg lies north of Johannesburg.
These new industries are centres of super-exploitation, for the wages paid to Africans are far below those paid to their colleagues in the ‘white’ urban areas, and this with massive state capital incentives and subsidies to private enterprise.
Ten years after Verwoerd’s promise to ‘reverse the movement of Africans’ in order to protect ‘white civilisation’, in nearly every city, town, dorp and village of South Africa, the non-white population exceeds the white population. The contradiction that faces the South African rulers is inherent in their insistence on permanent white rule.
In order to continue that rule economic development is essential, to protect the inflated privileges of the whites and to finance the repressive state apparatus. To maintain that development cheap African labour is crucial.
The skilled jobs that are being opened to Africans as a result of this development, however, do not mean increased wages. What is happening is the ‘floating up’ of apartheid, with whites moving on to supervisory jobs with increased pay, while blacks do skilled jobs for decreased pay.
But African workers are gaining confidence and organisational strength, as the recent wave of strikes demonstrate. The Rand Daily Mail commented: ‘Africans are more conscious of their power, and it’s not just black power but black workers’ power.’
The growth of manufacturing industries has also revealed another contradiction in the South African economy. The Financial Mail reported that the per capita income of African workers was £4.12 per month in 1969, average white income per head was £55.88 per month. Such gross inequalities restrain the growth of the internal market and therefore it is on exports that South Africa depends to absorb productive capacity.
In spite of the publicised antagonism between the ‘English speaking’ capitalists and the South African state on the question of African wages, the racial distribution of income is unlikely to change. And given that the competitive position of South African manufactured goods in general, and capital goods in particular on the world market is weak, it is therefore to black Africa, as the Economist suggests, ‘that the Republic must hope to sell most of its growing exports of manufactured goods, if black Africa is willing.’
Since exports have not risen fast enough to absorb the productive potential, a related tendency for investable surpluses to be exported has materialised. This twin factor is the basis for the South African expansionist policies into the Southern African countries of Rhodesia, Angola, Mozambique, Zambia, Namibia and Malawi. Hence the ‘dialogue’ policies of the Vorster government. What is also important is that the export of South African
capital and manufactured goods to these countries is encouraged and supported by international capital. Indeed, the Western powers have a direct interest in the expansion of the South African economy. Hence the supply of arms to South Africa, to protect her ‘outer’ frontier in Rhodesia, Angola and Mozambique, and the support in western capitals to ‘normalise’ relations between black Africa and South Africa.
The industrialisation associated with the mining industry in South Africa was largely dependent on unskilled, temporary contract labour, where organisation and sustained militancy by the miners was difficult. The Chamber of Mines found in the system they had created a cheap, easily disposable workforce, which still had a meagre chance of supplementing their wages with a subsistence rural income.
The industrialisation associated with the manufacturing industry is qualitatively different. To the white employers and the state, in this sector a stable African working class, harnessed to capital intensive industries is crucial in terms of productivity.
The Africans themselves now totally depend on wages to sustain their families, a factor that is reflected in the growth of a permanent urbanised workforce. Given the importance of manufacturing to the white power structure, a revolutionary challenge by the new African working class would threaten that structure more decisively.
Further, the importance of this challenge has implications beyond the borders of South Africa, in view of the expansionist policies, which are generated by this new phase of development. As the combination of Western and South African capital gain control of the political economy of countries in East and Central Africa, on the basis of surpluses extracted from South Africa, the African working class increasingly becomes the key element in the liberation of the whole of southern Africa.
There are R1.75 (Rand) to £1 sterling.
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