The significance of the minerals-energy complex in the light of South African economic historiography¶
Bill Freund (2009). The significance of the minerals-energy complex in the light of South African economic historiography. Transformation: Critical Perspectives on Southern Africa, No. 71. Transformation (Project MUSE).
| Type | journal article |
| Scope | Economics and economic history of apartheid |
| Method | synthesis review |
| Period studied | 1880s–2008 |
| Regions | South Africa |
| Themes | comparative theory, business and state, manufacturing industrial policy, mining migrant labour, macro fiscal finance debt, transition post apartheid, methods data sources |
| Citation key | freund2009 |
Argument¶
Freund places Fine and Rustomjee's minerals-energy complex (MEC) within the longer historiography of South African economic thought, from de Kiewiet and the liberal progress narrative, through Houghton, Nattrass and Lipton, to Wolpe, Legassick, Christie, Clark, Gelb and Moll. He argues that the MEC's originality lies in its focus on institutional and financial linkages around mining, energy and heavy industry, as opposed to sectoral or purely state-centred accounts. It emerged from the radical critique of apartheid, the weakening of Keynesian and Marxist orthodoxies, and the rise of heterodox and institutionalist approaches. He holds that the MEC has been widely cited but rarely applied, and that it remains relevant to post-apartheid BEE, Eskom's decline and financialisation.
Evidence and method¶
Secondary literature and published works in South African economic historiography (Houghton, Nattrass, Lipton, Legassick, Wolpe, Gelb, Moll, Feinstein, Terreblanche, Fine and Rustomjee), plus two Fine papers from 2008. No new empirical data.
Place in the debates¶
- liberal vs revisionist/radical on apartheid, capitalism and growth (see Liberal vs revisionist: was apartheid functional or dysfunctional for capitalist growth?). Freund traces the shift from the liberal progress narrative (Houghton, Nattrass, Lipton) to the radical view (Wolpe, Legassick) that capitalism depended on cheap labour. He treats the MEC as the next step beyond both.
- sectoral (primary/secondary) vs linkage/institutional analysis of the SA economy (see Industrialisation, protection and industrial structure). Sides with the MEC's linkage and institutional approach (Fine and Rustomjee, building on Christie and Clark) over the primary/secondary division. He regards this division as inadequate.
- cheap labour thesis and the role of manufacturing as a progressive force (see Cheap labour thesis and the function of the reserves). Criticises the benevolent view of manufacturing held by Nattrass, Lipton and, in part, Feinstein. He credits Legassick with showing that mining set the pace for manufacturing.
- economic failure of the apartheid economy and the causes of crisis (see Did the apartheid economy fail? Growth, productivity, investment and the post-1970s crisis). Cites Moll, Gelb and Saul and Gelb as pioneers in identifying crisis. He sees the MEC as explaining industrial weakness through business clustering around profitable raw-material options.
Findings¶
-
The MEC's chief originality is its focus on institutional and financial architecture. (p. 17)
it is really the insistence on studying that architecture which represents its most original and significant contribution.
-
Electricity ties energy to mining and makes the economy unusually electricity-intensive. (p. 17)
The majority of South Africa’s huge coal production is converted into electricity, they point out, while 40 per cent of electricity goes into mining operations.
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The MEC left the economy with strengths in core capacities but weak forward integration into the rest of the economy. (p. 17-18)
The weaknesses arise from the failure of this to be vertically integrated forward into the rest of the economy
-
Houghton's Rostovian optimism misjudged South Africa's trajectory; 'maturity' was forecast for 1993, the last full year of the old order. (p. 6)
would be reached in 1993, which ironically turned out to be the last full year of the old political dispensation.
-
For Legassick, capitalism rested on cheap labour and gold-mining labour controls, with mining dominating manufacturing. (p. 10)
For Legassick, capitalism in South Africa depended fundamentally on cheap labour, achieved its strength on this basis in large part and worked, not without contradiction, to bend the state to its purposes
-
Gelb marked a break by treating South Africa's economic legacy as a crisis in the early 1990s. (p. 13)
South Africa enters the 1990s with a legacy of economic problems that makes a long and depressing list
-
Clark and Christie established the historical foundations of state-corporation links between mining capital, state security needs and heavy industry. (p. 11-12)
how the interests of mining capital, the security needs of the state and a developing concept of the importance of industrialisation focussed on heavy industry came together to mutual benefit
-
Freund sees post-apartheid policy as continuing the pre-1994 growth path, with BEE tied to the MEC core. (p. 20-21)
the ANC was overwhelmingly committed to continuing the growth model laid out and accepted by the de Klerk government following the IFI consensus of the day.
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Freund finds no major refutation of the MEC, which is widely cited but rarely applied. (p. 20)
I don’t believe one could argue that there have been major refutations of the MEC idea, which in essence is in fact widely and respectfully cited but rarely if ever applied.
Evidence ledger¶
Sources used¶
| Source | Kind | Period | How used |
|---|---|---|---|
| Fine and Rustomjee (1996), The Political Economy of South Africa: from minerals-energy complex to industrialisation | secondary literature compilation | Twentieth century (book written 1997 per the text, published 1996) | The central text under review; its MEC thesis, linkage claims and electricity/coal figures are summarised and assessed. |
| Fine (2008a, 2008b) papers on the context of the MEC concept | secondary literature compilation | 2008 | Supply the author's account of the policy context in which the MEC was developed and of Fine's route into the subject. |
| Norval (1962), Industrial Progress in South Africa | secondary literature compilation | c.1962 | Treated as a primary expression of the official/booster view of industrial progress and protectionism in the early 1960s. |
| Houghton (1967), The South African Economy | secondary literature compilation | 1967 | Quoted to illustrate liberal modernisation-school optimism about secondary industry and Rostow's stages. |
| Nattrass (1981), The South African Economy: its growth and change | secondary literature compilation | 1981 | Used as an example of late-apartheid developmental economics focused on manufacturing and dualism. |
| Feinstein (2005), An Economic History of South Africa | secondary literature compilation | conquest to 2000s | Cited for its account of state institutions, mining-generated heavy industry and the cheap-labour growth path, and quoted on its legacies. |
| Terreblanche (2002), A History of Inequality in South Africa 1652-2002 | secondary literature compilation | 1652-2002 | Quoted on Verwoerd's capital-intensive 'white economy' policy and the dominance of a capitalist enclave. |
| Christie (1984), Electricity, Industry and Class in South Africa (Oxford thesis, then book) | secondary literature compilation | early twentieth century to 1980s | Drawn on for the role of electrification and state-underwritten energy development in mining and for the nuclear energy focus. |
| Clark (1994), Manufacturing Apartheid: state corporations in South Africa (Yale thesis) | secondary literature compilation | Smuts era and after | Cited for the historical foundations of the parastatals and for mining as a model of work organisation. |
| Innes (1984), Anglo: Anglo-American and the rise of modern South Africa | company records or reports | to 1980s | Cited as the study of Anglo-American's development that fed Fine's thinking. |
| Reynders Commission report | commission or official report | 1970s (date not given in text) | Mentioned as the material through which Fine was drawn into studying the South African economic structure. |
| Simons and Simons (1983), Class and Colour in South Africa 1850-1950 | secondary literature compilation | 1850-1950 | Quoted for the orthodox Marxist view of industrialisation versus an obsolete colonial order. |
| Wolpe (1980), Legassick (1977) and Morris (1980) radical-historiography works | secondary literature compilation | 1970s-1980 | Used as the radical critique of cheap labour and the mining-labour system on which later MEC thinking built. |
| Gelb (ed.) (1991), South Africa's Economic Crisis, and Saul and Gelb (1981) | secondary literature compilation | 1981-1991 | Used for the 'crisis' and 'racial Fordism' interpretations, including the decline in the gold price, and Morris's '50 per cent solution'. |
| Moll (1991/1992) article on whether the apartheid economy 'failed' | secondary literature compilation | post-WWII growth | Cited for comparative evidence on growth, productivity and manufactured exports under apartheid. |
Inference¶
Quantification: None.
Historiographical essay: reads and periodises successive economic-history interpretations (liberal, Marxist, regulation theory, heterodox) and positions Fine and Rustomjee's MEC thesis within them, using summary and quotation of the secondary literature rather than primary data analysis.
Key claims¶
| Claim | Basis | Strength |
|---|---|---|
| Fine and Rustomjee's MEC concept arose from outside the South African economic-history tradition and has been widely cited but rarely applied. (p. 3) | Fine (2008a, 2008b) papers and the author's own reading of the reception of the MEC. | Illustrative or anecdotal |
| Early South African economic historiography was a liberal 'progress' narrative that treated gold as the base and secondary industry as a likely drain or an automatic stage of growth. (p. 5) | Readings of de Kiewiet, Norval and Houghton, with quotations from Houghton (1967). | Illustrative or anecdotal |
| Radical scholars (Wolpe, Legassick, Christie, Clark, Innes) laid the groundwork for the MEC by showing the links between mining, labour controls, energy, the state and manufacturing. (p. 12) | Summary of Wolpe 1980, Legassick 1977, Christie 1984, Clark 1994 and Innes 1984. | Illustrative or anecdotal |
| By the 1970s-80s South African capitalism was in structural trouble, and Gelb's 'racial Fordism' came closest to anticipating the MEC. (p. 15) | Gelb 1991, Saul and Gelb 1981, Moll 1992, Fransman 1982, as summarised by the author. | Illustrative or anecdotal |
| Fine and Rustomjee hold that the MEC is the core of the economy, with heavy dependence on electricity (about 40 per cent going to mining) and weak forward integration, and that import-substituting industry peaked around 1960. (p. 18) | Summary of Fine and Rustomjee 1996, including a page 252 quotation; no underlying data shown. | Partial data |
| Post-apartheid policy continued the conservative growth model, and the MEC core is tied to BEE and to the weakening of Eskom, so the historic MEC patterns persist. (p. 21) | The author's own observations and earlier articles (Freund 2007, 2008); no data presented. | Asserted |
| Terreblanche and Feinstein offer parallel insights on state, capital-intensity and cheap labour but sidestep the MEC. (p. 20) | Quotations from Terreblanche 2002 and Feinstein 2005. | Illustrative or anecdotal |
Gaps in the evidence¶
As a historiographical essay it presents no data of its own, so claims about the MEC's dominance, electricity intensity, and post-apartheid BEE and financialisation trends rest on the reviewed works and assertion. Testing them would need sectoral input-output tables, Eskom electricity-consumption series, Chamber of Mines and IDC investment records, and company-ownership data on BEE deals and capital flight. Much of this existed in official statistical series and company archives and could now be assembled.
Replicability: Not applicable.