The nature and origins of capitalism in South Africa

Abstract

In economic history, capitalism is a crucial concept. It draws attention to the role of social institutions in the rapid and sustained productivity increases of the past two hundred years. It was Karl Marx who first advanced a coherent view on how particular social forms affect the rate of economic innovation. As Cohen points out, 'the Marxist approach compels one to analyse social forms as totalities and to integrate economic with non-economic factors'. Thus, within the Marxist approach, the capitalist system consists of particular social relations that allow the forces of production to develop more rapidly than in previous systems. Such a framework represents an important advance from the point of view of institutional economic historians, who, in contrast to orthodox economists, seek to explain how social contexts influence the way in which people utilise and develop the factors of production. However, the weakness of the Marxist definition of capitalism is that it remains at a level of abstraction which obscures, rather than illuminates, the nature and origins of actual capitalist systems. Nor has the Marxist definition been effective in explaining the various changes that modern systems have experienced. Subsequent attempts by authors to either build on the Marxist definition or to offer an alternative have suffered from similar limitations. Applications of the concept capitalism have therefore shed very little light on the economic history of countries such as South Africa. This paper consists of two separate sections. Section one explores theoretical issues in pursuit of a new definition of capitalism. The section establishes the need for a new definition of capitalism; it demonstrates that no fully formed alternative that can fruitfully be applied to the history of South Africa exists; it then sets out to construct a more useful definition. Section two examines the early development of capitalism in South Africa from the point of view of the theoretical definition constructed in section one. There is a brief discussion of the pre-colonial period followed by an exploration of the colonial period until about 1840.