South African’s National Liberation Movement

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Parliamentary Bulletin

Issue No. 31

SA is still Suffering Inequalities from Racial Capitalism

14 April 1998

Apartheid had two key elements: white political supremacy, which deprived black South Africans of their fundamental rights as citizens, and racial capitalism, which concentrated wealth in the hands of a white minority and kept black South Africans in exploitative poverty. Between 1934 and 1973 the South African economy had an annual growth rate of 4,5 per cent, but this period was one in which whites were undeservedly enriched, and blacks were undeservedly impoverished.

The first democratic elections in 1994 swept away white political supremacy and replaced it with a non-racial democracy, with a constitution guaranteeing the rights and equality of every citizen. In fact, in the years before 1994, the National Party Government had been dismantling some of the elements of white political supremacy in its desperate bid to retain its dominant position. Hence, the pass laws, the Immorality Act and other examples of petty Apartheid were abolished.

But 1994 did not auger the demise of racial capitalism. The stark reality is that many of the social and economic inequalities brought about by racial capitalism are as acute as ever. South Africa’s wealth is still overwhelmingly concentrated in white hands, despite black empowerment, and the crisis of black poverty in the new South Africa is the unacceptable legacy of the Apartheid.

Racial Capitalism – the Facts about Inequality

  1. The per capita income of whites were 10,6 times higher than African per capita income in 1946/47. It was 15 times higher in 1975. Wealth was redistributed upwards from poor blacks to rich whites.
  2. Between 1975 and 1991, the income of the bottom 60 per cent of the population dropped by about 35 per cent.
  3. In 1996, the poorest 20 per cent of income earners received only 1,5 per cent of total income in South Africa, while the top ten per cent had 50 per cent of total income.
  4. In 1995, the poorest 20 per cent of households received only three per cent of all household income, while the richest 20 per cent of households had 65 per cent.
  5. In 1995, the poorest 30 per cent of households received only five per cent of all household income; the poorest 50 per cent received only 11 per cent; the poorest 60 per cent received only 16 per cent; and the poorest 80 per cent had only 35 per cent.
  6. For the first three quarters of the century, per capita spending on pensions, health and housing for Africans was about ten times smaller than on whites. By 1990, it was still four times smaller.
  7. In 1970 spending on education for a white pupil was 20 times higher than spending on an African pupil.

Racial Capitalism – the Effects on Africans

  • Africans were displaced by whites from large parts of land on which they performed successful traditional farming for centuries.
  • For decades millions of black people were paid exploitative wages in all sectors of the economy.
  • Laws deprived blacks of opportunities to acquire skills, and also forced them to do humiliating work at very low wages.
  • Blacks were denied opportunities to accumulate human capital.
  • There was no opportunity for blacks to accumulate property or develop entrepreneurial and professional capabilities.
  • The racist systems impoverished and destroyed not only individuals, but whole black societies, often brutalising large numbers of them, and prevented South Africa’s peoples from becoming a society.

The Focus of the ANC’s Redistribution and Restitution Policy

A major plank of the ANC Government’s policy is a poverty upliftment programme to improve the lives of 18 million of the poorest South Africans, who were the direct victims of the injustices of the Apartheid system and the indirect victims of the “creeping poverty” caused by the Struggle between the freedom movement and the oppressive NP Government between 1975 and 1991.

Some significant changes have already been delivered by the ANC. For example, black empowerment has helped the proportion of urban Africans in the top 20 per cent income group to increase from two per cent in 1990 to six per cent in 1995.

Educating South Africans about Racial Capitalism

Many white South Africans have accepted the injustice of white political supremacy, but have not yet recognised the injustice of racial capitalism. It was not just white Afrikaner business that profited from National Party policy measures: all white businesses benefited, including those owned by English speakers, regardless of whether they agreed with the NP Government’s policies or not.

Whites do not accept that the economic gains they made during Apartheid were undeserved, made as they were on the undeserved economic subjugation, oppression and exploitation of the African majority. But the richest whites should know that a sizable part of their wealth is undeserved, because it was ill-gotten through:

  • white power structures
  • white privileges
  • white favouritism
  • white patronage
  • white corruption.

They should therefore be made to understand that they have to make sacrifices as an investment in reconciliation, social justice and social stability. This is not punishment, nor is it an immoral racially-motivated confiscation of wealth; it is instead a meagre contribution to be made by the richest (mainly white) people in South Africa in order to undo the systemic injustices of the Apartheid system upon the poorest (mainly black) people in South Africa.

This Bulletin is based on a paper by Professor Sampie Terreblanche of the University of Stellenbosch

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