This research examines the relationship between business, the state and society in South Africa -- particularly the Western Cape -- over the period from 1960 to 1990, viewed against the background of economic conditions in this region, South Africa and the world. Utilising a development history approach, it is based on an extensive study of primary and secondary documentation, supplemented by a panel of in-depth interviews and observation. This study finds that the relationship between business and apartheid incorporated both functional and dysfunctional elements, although over time the benefits diminished and the costs multiplied. The latter, Regulation Theory suggests, is true for any institutional order, but it could be argued that, under apartheid, the particularly fragile and contradictory nature of the institutional arrangement made inevitable crises more rapid and more pronounced. On the one hand, apartheid restricted the economic development of the country, as a result of a range of factors from skills shortages to the visible waste of resources on grand ideological projects and security; as suggested by Resource Curse Theory, minerals windfalls tend to encourage irresponsible behaviour by governments. On the other hand, certain businesses prospered, notably the Afrikaner business sector. All business benefited from the overall growth of the 1950s and 1960s, whilst niche players often did quite well even during the 1980s. Further, the South African businessmen, both English- and Afrikaans-speaking, were skilful in adapting to the difficult conditions brought about by apartheid, and in many cases they prospered. As highlighted by Business Systems Theory, embedded social ties and informal relations may help either support or compensate for formal regulatory pressures. Many of these general trends were particularly accentuated in the Western Cape. The fact that business protests against government policies were often more motivated by concerns as to future property rights and of social disorder, rather than human rights, does indeed raise serious moral issues. However, in helping encourage political reform, they may have made a positive contribution. This study is founded on three related strands of thinking within the political economy tradition, Resource Curse Theory, Regulation Theory and Business Systems Theory, with the emerging common ground between these three bodies of thought being highlighted. As suggested by Resource Curse Theory, non-mineral producing regions tend to be particularly adversely affected in mineral rich countries, and there is little doubt that the region bore all the costs of the collapse of the gold price in the 1980s, and lacked the deeper capital base of the now Gauteng region to cushion the shock. Whilst apartheid may, as we have seen, have served conservative sectors of agriculture and mining quite well for many years, it also involved large costs incurred through social engineering experiments and the increasing demands of the security establishment. Resource Curse Theory suggests that national economies become dangerously dependent on the vagaries of commodities markets, and that the process of institutional design and evolution is hampered by assumptions of easy money which may temporary resolve the negative consequences of any institutional shortcomings. The poor price of gold in much of the 1980s brought about a crisis in the system, and, there is little doubt that this contributed to the demise of the order. As suggested by Resource Curse Theory, the experience of the Western Cape, a region of the country poor in minerals, was often one of inefficient and wasteful state intervention, coupled with increasingly poor performance of non-mineral related industries. Indeed, the effects of the recession of the 1980s were most pronounced in non-mineral producing areas of the country, particularly in the Western Cape. Regulation Theory highlights that no set of institutions and practices is ever totally coherent and functional, but at specific times may work to promote both certain types of economic activity and overall growth. It is wrong to suggest that because an order only works for some players at specific times it is simply dysfunctional or does not work properly at all. However, over time, internal contradictions mount and the benefits diminish. A particular feature of the apartheid order was that some of its core benefits at its height were particularly concentrated on some players (segments of Afrikaner commerce and industry, mining and agriculture), whilst the costs were shared across a wider range of players, with a disproportionate burden being borne by the black majority. A further feature was that the costs were often indirect and spread over many years if the benefits were sometimes immediate: this would include the persistent dysfunctionality of much of the South African education system and the criminal ecosystem that was nurtured through sanctions busting. Internal contradictions and spreading dysfunctionality rarely leads to a conscious and coherent period of institutional redesign, but rather an incoherent, experimental and contested process, such as characterized late apartheid reforms, and, indeed, the post February-1990 negotiation process. Finally, again at a theoretical level, as Business Systems Theory highlights, it is important to take account of the formal and informal ties interlinking firms in different sectors in the region, and firms and government, and the extent to which regions within a particular country may follow very distinct developmental trajectories. The benefits and the costs of the system diffused unevenly in the region, giving many players both a stake in the existing order, and an interest in some or other type of reform.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:9125 |
| Date | January 2014 |
| Creators | Wood, Robert Jameson |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Doctoral, DPhil |
| Format | xi, 204 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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