There is no consensus about the reasons for the demise of South Africa’s political system of apartheid. Was it the domestic unrest and political awakening of black South Africans that forced the White government to turn to the negotiating table or face civil war? Was it the magmanimous leadership of FW de Klerk or the reconciliatory courage of Nelson Mandela that allowed a peaceful transition? Or was it economics: changing internal and external resource allocations that by the end of the 1980s made apartheid non-viable even for the whites which were the supposed beneficiaries?

This is a question raised in Hlumelo Biko’s new book, The Great African Society. Biko argues that “global discomfort with the apartheid government’s modus operandi ultimately contributed significantly to the undoing of the apartheid regime” (p. 4), assigning an important role for the international community – and sanctions – in raising the costs of apartheid and increasing the likelihood of capitulation. But Biko’s view is challenged by an earlier literature. Already in 1997, Anton Lowenburg, Professor of Economics at California State University, published a paper in Contemporary Economic Policy which argued that “the direction of causality between sanctions and economic damage might have been quite the reverse of that normally supposed”. He provides evidence which shows that sanctions followed internal events, such as the 1973 strikes and Soweto riot, rather than causing those events. He argues that instead of forcing the government to the negotiating table, sanctions may have resulted in a conservative backlash from white South Africans, contributing to the continuation of the regime. Think of the impact of sanctions on Robert Mugabe’s Zimbabwe, for example, or North Korea.

A different economic explanation is found in Martine Mariotti’s recent paper on “Labour markets during apartheid in South Africa“, published in the Economic History Review. Mariotti argues that white skills improved significantly during apartheid (due to the emphasis on education), reducing the number of semi-skilled white workers and increasing the number of skilled white workers. Apartheid also coincided with a large increase in the manufacturing and services sectors, where skilled and semi-skilled labour was required. Thus, instead of white labourers competing with black labourers (as was the case during the early part of the twentieth century and the reason for the imposition of the colour bar), white labour and black labour was now complementary. White skilled labourers and the white owners of capital needed to fill semi-skilled positions with black workers, which is why the apartheid government in 1979 followed the recommendations of the Wiehahn Commission to abolish all forms of statutory job reservation. Apartheid, of course, would still continue for another 15 years, which suggests that economic forces don’t immediately trump racial ideology. But the shifts in the labour market, changing the economic incentives for white labourers, put the apartheid policies on an inevitable road to failure.

There were likely other economic causes as well: the high costs of industrial decentralisation, the use of import-substitution policies during apartheid that left huge current account deficits, industrial policy that attempted to pre-empt the impact of sanctions (like building SASOL), and the high security and military costs. The extent to which these policies mattered is still open for debate.

Understanding the reasons for apartheid’s failure is today, 19 years after its end, still important. Says Biko (p. 4): “To date the focus has been on a diagnosis of the racial symptoms of apartheid, resulting in a weak prescription of a Truth and Reconciliation Commission with a narrow mandate focused on racist-motivated crimes against humanity, and prescribing a cocktail of Black Economic Empowerment and affirmative procurement (policies) as a remedy for South Africa’s economic ills. If the desired outcome behind BEE as a policy was broad-based economic empowerment of previously disadvantaged South Africans, then so far it has failed”. If we are to address the legacies of apartheid that still persist – and Biko makes a number of radical suggestions, which is a discussion for another day – it is essential to gain consensus on the economic causes for the fall of the apartheid regime.

*From 20-22 March, Economic Research Southern Africa will host a workshop on the Economics of Apartheid in Cape Town. Several South African economic historians, including Martine Mariotti (mentioned above), will present papers. Send me a mail for more information.