Lessons from apartheid

Discussing the legacies of apartheid: Andile Khumalo, Lumkile Mondi, Johan Fourie and Bheki Mngomezulu (moderator).

On Friday, I joined Andile Khumalo and Lumkile Mondi as panellist during the ERSA workshop on the Economics of Apartheid (held from 20-22 March in the Slave Lodge Hall in Cape Town). Our topic: Solutions to the legacies of apartheid. Each panellist had 10 minutes to state his case. Here is my introduction:

It is impossible to think about a set of policies that will, within a short space of time, eradicate the apartheid legacies of poverty, unemployment and inequality. I say this because history provides an excellent guide: the poor white problem, already fervently discussed in policy circles during the 1910s (as Lindie discussed this morning), only really 'disappeared' from policy discussions during the 1960s (even though, as Edward John Bottomley shows, it still persists). Even though the poor white problem was about a third as severe as black poverty today, it required 40 years of 5% annual economic growth for it to be 'eradicated'. Perhaps a more contemporaneous example is more appropriate: Hans Rosling tweeted earlier this week that Africa will need 5% annual growth for the next 50 years to reach the same living standards that Europeans currently have. The point is: we have to be patient. But this is not to say that we cannot do anything.

The first priority is that we have to know, to interrogate, have far we have come and how much has changed. Collecting long-run wage series by race and occupation, as Martine called for on Wednesday, is important if we are to understand the divergence of interracial inequality (how unequal were white and black wages at the start of the 20th century?), its persistence, and its convergence (since the 1970s). But we also need within-group wage series: as has been suggested at this workshop, there is no such thing as an homogeneous experience for black South Africans during apartheid. The inequality of black incomes during the twentieth century is still badly understood. Such within- and between-group disaggregated wage data can then begin to inform our models of economic development.

A second priority, and one that has been highlighted throughout the workshop, is to separate the racial prejudices and ideologies of apartheid from evaluating its economic policies, programmes and institutions, many of which still persist today. As Nicoli mentioned, it is perhaps only now, nearly 20 years after apartheid, that we can begin to acknowledge that not all apartheid policies were detrimental to development. Lumkile and Ganief mentioned that the IDC was an important pillar of industrial development from the 1940s and continues that role today. Servaas mentioned yesterday that social transfer policies were already highly redistributive by 1994. While the motives may not have been benign, the outcomes were. Studying the apartheid period is therefore not only important for the way we understand and interpret our shared history, but it suggests that we can learn from its successes and mistakes.

Thirdly, then, this workshop (and earlier research) has begun to investigate these lessons, but much more needs to be done. Here I offer some suggestions.

• There is little doubt that the success of Afrikaner society to "pull themselves up by their bootstraps" can be attributed to the dramatic improvement in white education. Spending on white education already began after unification, but spending was only part of the story: Jan Smuts emphasised the improvement in teacher quality. Yesterday, Servaas mentioned the poor quality of South Africa's teachers, specifically in math and science. Are there lessons to be learned from the large, state-sponsored roll-out of teacher education during the early twentieth century for today?

• In addition to the higher quality teacher, and something that has been given very little attention, is the important role of civil society in improving the white education system. Women's leagues (notably the ACVV) and the Dutch Reformed Church, for example, not only provided facilities for rural schools, but also funded and managed school hostels and feeding programmes for poor rural kids. This was indeed a policy of 'no child left behind'. It's great to see Oprah and Patrice Motsepe investing in education, but can we draw on lessons from private spending in the twentieth century to improve education outcomes today?

• On Thursday, Dieter showed the massive spatial inequalities that persist, that the highest unemployment levels remain in the former homelands (even though the boundaries and barriers to migration have been removed). During the general discussion, culture was mentioned as a possible explanation; that people 'have an affinity to the land' or 'treasure their roots'. Ironically, these same arguments were made by the first Carnegie commission into white poverty in 1932. Afrikaners were seen to value the land and therefore would not move to cities, remaining isolated and impoverished. But within a generation, better education and better job prospects meant that most Afrikaners were living in urban areas. Are cultural explanations for poverty really helpful?

• Edward argued that apartheid's industrial decentralisation policies were ineffective in bringing manufacturing industries to the borders of the homelands, mostly because the focus was on outcomes other than financial viability. Will policy-makers' current attempts to establish special economic zones, for upliftment and development purposes, learn from these apartheid spatial policy errors?

• Danelle discussed the complexities within the white labour movement of the 1970s. Is the same not happening within COSATU at the moment?

• Laurence collected data on agricultural inputs and outputs during the apartheid period, which allow economists to calculate whether the introduction of new technologies - like tractors or harvesters - were labour complementing technologies or labour-substituting technologies. (Tractors may have been labour-complementing while harvesters labour-substituting, but this is still just an hypothesis.) Such lessons may have important implications for the current episode of labour unrest and mechanisation on farms.

• There are certainly other lessons not discussed at this workshop: for example, what is the role of entrepreneurship and how is it cultivated? It is certainly not incidental that Anton Rupert rose to prominence during the 1940s and 1950s. What is the role of financing for entrepreneurial ventures? What support did Volkskas (literally, the people's bank) play in connecting Afrikaner savings and investment? Where are the black savings institutions? What role did science and technology play during apartheid? Where are the black Hendrik van der Bijl's, who founded Eskom, Iscor, the IDC and many more. What was the role of trade and regional integration during apartheid? South Africa is part of the oldest customs union in the world - SACU - which was founded in 1910. Why is this institution in decline? How is our integration into the rest of Africa so slow?

I guess if I have to find a way to summarise all of this, I will refer to something I know much more about: sport. A UCT geographer once told me the Parable of the World Cup, and I'd like to repeat it here. He asked me, just before the 2010 FIFA World Cup, what the best way is for a country to win the World Cup: is it to appoint an expensive Brazilian coach? Or is it to give every kid in South Africa a soccer ball to play with. I think apartheid is the story of how white, but specifically Afrikaner kids, were all given soccer balls. Playing fields were built and good coaches at the junior levels were appointed. Forty years later, whites in South Africa 'won' the proverbial World Cup, reaching levels of income as high as any country of the world. Of course, the story is not that simple: apartheid meant that sometimes the balls and fields of black kids were taken to the benefit of the white kids. Or they were simply excluded from team selection.

But the question today is this: how do we ensure that all South African kids get a soccer ball? Only then can we dream of an equal-opportunity and prosperous future.

*Image source: Reinhardt Germishuijs.