South Africa’s War Against Capitalism

Nelson Mandela’s Battle Against Unionism, and Interventionism

By Thomas DiLorenzo

“Workers of the world unite, keep South Africa white.”

–Slogan of early twentieth-century South African Labor Unions

“South Africa’s apartheid is not the corollary of free-market or capitalist forces.  Apartheid is the result of anti-capitalistic or socialistic efforts to subvert the operation of market (capitalistic) forces.”

–Walter E. Williams, South Africa’s War Against Capitalism

During the twentieth century the worldwide socialist movement attempted to criticize capitalism by associating it with Nazi Germany since the Nazis did not nationalize many industries as the Russian socialists had done (they allowed ostensibly private enterprises that were nevertheless regulated, regimented and controlled by the state).  The truth is that the roots of Nazism or “national socialism” were thoroughly socialistic.  The Nazis were “national” socialists, whereas the Soviets claimed to be international socialists.  The Nazis and the communists were ideological clones who considered the ideas of classical liberalism (free-market capitalism, limited government, low taxes, private property, the rule of law, peace), and those who espoused them, to be their mortal enemy. 

Similarly, the international socialist movement has long attempted to associate another kind of socialist movement – the former South African Apartheid laws – as some kind of abuse of capitalism.  Nothing could be further from the truth.  Government-imposed discrimination against black South Africans was instigated by white labor unions associated with various Marxist and communist movements.  It was a pervasive system of government regulation, regimentation and control.  This of course is the exact opposite of free-market capitalism.

It was this form of massive government interventionism that the late Nelson Mandela battled against in his youth, and for which he was imprisoned for twenty-seven years by the South Africa government.  (Unfortunately, Mandela himself was a socialist and a covert member of the executive committee of theSouth African Communist party who idolized such totalitarian monsters as Fidel Castro.  He apparently never understood that it was a version of Castroite socialism that had victimized him and the black population of South Africa, and that what South African blacks needed the most was the economic freedom and opportunity provided by free-market capitalism).

What Was South African Apartheid?

Two books are indispensable to understanding the system of government-imposed, institutionalized discrimination against South African blacks known as “Apartheid.”  They are The Colour Bar by William H. Hutt, and South Africa’s War Against Capitalism by Walter E. Williams.  Both were published before the final collapse of Apartheid.

The origins of institutionalized discrimination against South African blacks were in the violent, Marxist-inspired white labor union movement (which had American ties) of the early twentieth century.  One of the first leaders of this movement, as Hutt describes, was one W. H. Andrews, who formed a chapter of the International Socialist League and who became the first secretary of the Communist Party of South Africa.  He championed the use of violence and terrorism to “protect” white workers from competition from blacks.  This union movement eventually became joined at the hip with the South African government so as to use the coercive powers of government (which can be far more violent and terroristic than mere unions alone) to deprive South African blacks of economic opportunity.

The first “Colour Bar Act,” as they were known, was the 1911 Mines and Works Act, which listed numerous jobs that could not legally be performed by blacks.  South African capitalistsopposed this law because they wanted to be able to hire employees in a free market.  In such a market, the generally lower-skilled and less-educated black workers (less skilled because of inferior educational opportunities as well as racism) could indeed find employment, albeit at a lower, entry-level wage than more experienced and skilled white workers.  The unions’ main goal was to deprive “the capitalist class,” which they harshly condemned, of this opportunity to hire black workers.  As Hutt explained, what the general secretary of the white workers’ labor union opposed was “the desire of the capitalist class to achieve economies by bringing better-remunerated and more responsible work within the reach of the Africans.”

The Mines and Works Act of 1926 was the result of “the combination of socialism and racism” brought about by the ruling Nationalist party, a socialist political party that had formed a coalition government with the South African Labour Party.  The lynchpin of this law was known as “the rate for the job,” a law that mandated minimum wages that precluded thousands of black workers from offering to become employed at entry-level wages, thereby depriving them of employment opportunity altogether.  This of course is the effect of minimum-wage laws anywhere and everywhere.   As Hutt wrote, the law “had the effect of preventing the entry of subordinate races or classes into the protected field.”

A 1922 Apprenticeship Act saw to it that only whites could attain apprenticeships in numerous trades, with apprenticeship being a prerequisite for employment.  When South African blacks attempted to bypass all these socialistic, protectionist labor laws by becoming entrepreneurs and starting their own business enterprises, the union-dominated South African government issued Obama-style “directives” or executive orders forbidding the opening of any black-owned businesses,  “even in African urban areas.”  There was also a system of “job reservations” where hundreds of jobs were “reserved” for white workers only.

There were also pervasive separate-and-unequal laws and regulations affecting just about every institution in South African society.  Inter-racial marriage was outlawed, as was sexual intercourse between whites and non-whites.  These all of course had nothing whatsoever to do with capitalism or markets or a free society and were entirely the work of the dark hand of statism.  As Walter Williams concluded in South Africa’s War Against Capitalism,

 “The whole ugly history of apartheid has been an attack on free markets and the rights of individuals, and a glorification of centralized government power.”