Defending South African Capitalism (review of Merle Lipton, Capitalism and Apartheid, 1986)¶
Bill Freund (1987). Defending South African Capitalism (review of Merle Lipton, Capitalism and Apartheid, 1986). Transformation 3.
| Type | journal article |
| Scope | Economics and economic history of apartheid |
| Method | synthesis review |
| Period studied | c.1880–1986 |
| Regions | South Africa, Witwatersrand, Kimberley, East Rand, Port Elizabeth, Zambia (Copperbelt, comparative) |
| Themes | business and state, politics ideology elections, labour markets wages, mining migrant labour, manufacturing industrial policy, unions strikes, origins segregation, comparative theory |
| Citation key | freund1987 |
Argument¶
Freund reviews Merle Lipton's liberal case that capitalism and apartheid can be disengaged. He accepts her claim that the apartheid labour system has become less functional for capital, and he credits her with a serious challenge to the functionalism of 1970s revisionism. He argues that she defines apartheid too narrowly, as labour-market rigidity, and capitalism too narrowly, as opportunity-cost calculation. She also lacks any theory of the capitalist state. As a result she overstates the conflict between business and the Nationalist state, the liberalising pull of manufacturers, and capital's willingness to move beyond the Botha reforms. He supports this with historical and comparative evidence (Kimberley, the Zambian Copperbelt, Marx on Irish and English workers) and with management surveys. He concludes that business is stuck with apartheid as a 'Tar Baby' and fears majority rule.
Evidence and method¶
Close reading of Lipton's 1986 book, set against secondary literature: Legassick (1974), Greenberg (1980), Webster (1985), Turrell (1982), Mabin (1986), Burawoy (1985), Saul and Gelb (1981). Also Marx's 1870 letter on Irish and English workers, Ann Bernstein's (1986) survey of managers, a 1980 poll of foundry managers summarised by Webster, and press and court reports from 1986 (Financial Mail, SAAWU/East London).
Place in the debates¶
- Liberal vs revisionist (radical) views on whether apartheid and capitalism are functionally linked (see Liberal vs revisionist: was apartheid functional or dysfunctional for capitalist growth?). Takes a middle path. He accepts that the functional fit has eroded since the 1960s and that Legassick-style revisionism was too functionalist. He insists that revisionism remains a necessary foundation and that Lipton under-credits it.
- Cheap labour thesis and manufacturers' attitude to apartheid labour controls (see Cheap labour thesis and the function of the reserves). Rejects Lipton's claim that manufacturers were indifferent or opposed to apartheid labour policies. He argues that wage differentials, racial hierarchy and migrant or 'homeland' labour remained attractive to employers, including in the 1980s.
- Role of white labour in forging apartheid (see The job colour bar, white labour and its erosion). Agrees with Lipton that white workers had a material interest in racial boundaries and acted autonomously. He rejects her view that capital was indifferent to the colour of its workers.
- Theory of the state (instrumentalist vs Gramscian/Poulantzian) and business-state conflict after 1948 (see The state and capital: instrumentalism, autonomy and fractions of capital). Criticises Lipton for lacking a theory of the state. He sees business-state friction as secondary to a basic Nationalist commitment to capitalist accumulation and business loyalty to the state.
- Business as an agent of political reform in the 1980s (see Why apartheid ended: reform, transition and elite bargaining). Sceptical. He thinks most capitalists backed the Botha reforms, fear mass democratisation and majority rule, and will not break with the existing political order.
Findings¶
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Lipton's core account is that apartheid gave capital cheap, coerced black labour but cost it through restrictions on skilled black labour. (p. 2)
The benefits were provided by a plentiful supply of cheap, unskilled black workers and by the Intervention of the state apparatus to ensure their compliance.
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Freund concedes that the functional fit between capitalism and classic apartheid control mechanisms has broken down. (p. 4)
It is no longer possible to assert that South African capitalism has an Inherent need for compounds, passes, the absence of black labour unions, etc
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He judges Lipton too indulgent toward capital, especially when she reaches contemporary issues. (p. 4)
is overly generous to the capitalists and keeps stacking the cards in their favour
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Evidence from the 1980s shows employers still preferring migrant labour, which undercuts the claim that manufacturers opposed apartheid controls. (p. 7)
many companies have preferred and retained a migrant labour-force when workers with Section Ten rights would have been available.
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A management survey found substantial support for retaining influx control. (p. 7)
made even later records a large minority (45*) who preferred the retention of all or some Influx control
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The 1940s reform proposals were short-lived and administrative, so Lipton's optimism about that decade is overdrawn. (p. 8)
the more far-reaching reform proposals date almost entirely to the war period and were generally withdrawn or suspended thereafter
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Business-state conflict after 1948 was limited because the Nationalists were committed to capitalist accumulation. (p. 9)
Moreover, the Nationalists were totally comaitted to creating favourable conditions for capitalist accumulation.
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Capital supported the Botha government until 1985, contradicting Lipton's trend of growing business opposition. (p. 10)
Until 1985 this meant that virtually all South African capitalists backed the Botha government - like they had no other government In forty years.
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Employers responded to unrest by substituting labour groups, not by embracing unions. (p. 10)
In Port Elizabeth, a number of firms have replaced African with coloured or white workers, an Increasingly Important strategy.
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Freund qualifies the concept of 'racial capitalism', which he thinks understates capital's flexibility. (p. 11)
The term 'racial capitalism' is perhaps unfortunate because it implies a rigid commitment to racial hierarchy over all business practices
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His closing image: business cannot escape apartheid, though it is no conspiracy to preserve it. (p. 12)
apartheid is the Tar Baby from which they find no escape
Evidence ledger¶
Sources used¶
| Source | Kind | Period | How used |
|---|---|---|---|
| Merrie Lipton (1986) Capitalism and Apartheid (the reviewed book, treated as a body of evidence) | secondary literature compilation | c.1910-1986 | The reviewed book's sectoral and historical analysis is the object of the review, and its quotations are used to characterise and contest its claims. |
| Legassick (1974) 'South Africa: Capital Accumulation and Violence', Economy and Society 3(3) | secondary literature compilation | post-war South Africa | Quoted as the exemplar of 1970s revisionist functionalism against which Lipton's argument is contrasted. |
| Greenberg (1980) Race and Class in Capitalist Development | secondary literature compilation | n/a | Cited as a comparative study of a bounded white working class, an approach Lipton is said to ignore. |
| Webster (1985) Cast in a Racial Mould, including a 1980 poll of foundry managers on the East Rand | secondary literature compilation | 1980 | Survey data on managers' preference for homeland migrant labour are used to show capital still valued extra-economic controls. |
| Bernstein (1986) Urban Foundation study of management attitudes to influx control | secondary literature compilation | c.1985-86 | Survey figure of 45% of managers preferring some or all influx control is used against Lipton's view of business opposition to labour controls. |
| Turrell (1982/1986) on Kimberley labour and compounds 1871-88, and Mabin (1986) on Kimberley residential segregation | secondary literature compilation | 1871-1920 | Historical studies cited to show management deliberately sorted white and black workers, contradicting the claim that capital was indifferent to colour. |
| Burawoy (1985) The Politics of Production (Zambian Copperbelt comparison) | secondary literature compilation | colonial and post-colonial Zambia | Comparative evidence that racial hierarchy served as a managerial control system in mining. |
| Marx letter of 1870, in Marx and Engels on Colonialism (1959) | other | 1870 | Quoted as an analogy that capital maintains power by exploiting divisions among workers. |
| Financial Mail, 26 December 1986 (prizes and brickbats of the year) | newspapers periodicals | 26 December 1986 | Cited to show business praised General Motors for crushing union resistance, against Lipton's view of business support for unions. |
| Recent court revelations on SAAWU and security police in East London | other | c.1986 | Used to challenge Lipton's account of peaceful business-SAAWU coexistence. |
| Business Charter (business policy document, 1986) | company records or reports | c.1986 | Read as evidence of the political limits of business thinking and its fear of mass democratisation. |
| Opinion surveys relied on by Lipton on white and black political attitudes | household or labour survey microdata | to c.1986 | Lipton's surveys are acknowledged to show white attitudes relaxing but are judged dubious on black views. |
Inference¶
Quantification: None.
Critical book review: Freund argues from theory (Gramscian/Marxist conceptions of the state and capital), comparative analogy (Zambian Copperbelt, Irish/English workers), selected secondary studies and a few survey and press items, to contest Lipton's reading of capital's interests in apartheid.
Key claims¶
| Claim | Basis | Strength |
|---|---|---|
| Lipton's claim that capital was indifferent to workers' colour and opposed apartheid labour policies is contradicted by the evidence that mining capital deliberately built racial hierarchies. (p. 5) | Secondary studies by Turrell, Mabin and Burawoy plus the Marx analogy; no new primary data. | Illustrative or anecdotal |
| Manufacturers still favoured migrant and controlled labour in the 1980s, so business did not uniformly oppose influx control. (p. 7) | Webster's 1980 foundry-manager poll and Bernstein's Urban Foundation survey (45% preferring some or all influx control). | Partial data |
| Lipton exaggerates the conflict between capital and the state after 1948; business retained fundamental loyalty to the Nationalist state. (p. 9) | Argued from state theory and Lipton's own quotations, with the 1950s recession offered as the explanation for the business slowdown. | Asserted |
| The 1940s reform wave was short-lived and administrative rather than political, so Lipton's reading of it is too cheerful. (p. 8) | Lipton's own concessions and general historiography, with no new sources. | Asserted |
| Business opposition to the state is not growing as Lipton claims; most capitalists support the existing order and only tolerate trade unions in times of crisis. (p. 10) | Financial Mail item on General Motors, court revelations on SAAWU, Business Charter, anecdote about Port Elizabeth firms substituting labour. | Illustrative or anecdotal |
| The evidence for an evolving disjuncture between apartheid and capitalist requirements is strong, so the 1970s functionalist revisionism is too rigid. (p. 4) | Appeal to Lipton's analysis and the Legassick quotations; no independent data presented. | Asserted |
| Post-apartheid capitalists would fear a fundamental change in the state, as the Zambian experience of declining productivity suggests. (p. 12) | Burawoy's Zambian comparison and analogy. | Illustrative or anecdotal |
The author's caveats¶
The reviewer notes Lipton's evidence is strong to 1978 but thin on post-1978 literature, and calls her opinion surveys very dubious on black views. He does not state limits of his own evidence.
Gaps in the evidence¶
The review rebuts Lipton's claims about business attitudes with scattered surveys and anecdotes rather than systematic evidence. Better tests would use employer association records (e.g., Chamber of Commerce, FCI, Assocom submissions), Hansard and commission evidence on colour-bar and influx control positions, and firm-level employment and wage data by race, all of which existed then. Systematic data on business support for the state (donations, survey data on business views) would also test the claims about the capital-state relationship.
Replicability: Data poorly documented.