Slaves as capital investment in the Dutch Cape Colony, 1652-1795 (original) (raw)
Related papers
Elites in Development. Helsinki: UN-WIDER
The arrival of European settlers at the Cape in 1652 marked the beginning of what would become an extremely unequal society. Comparative analysis reveals that certain endowments exist in societies that experience a 'persistence of inequality'. This paper shows that the emphasis on endowments may be overstated. A more general explanation allows for 'non-tropical products' to contribute to the rise and persistence of an elite, and consequently inequality. The focus shifts to the production method used in the dominant industry -in this case, slave labour in viticulture -and the subsequent ability of the elite to extend these benefits to products that were typically not associated with elite formation in other societies (such as wheat). The Cape Colony is used as a case study to show how the arrival of French settlers (with a preference for wine-making) shifted production from cattle farming to viticulture. A large domestic and foreign market for wine necessitated an increase in production volume. Given differences in fixed and variable costs, this resulted in knecht (wage) labour being supplanted by slave labour, an event which institutionalized the elite and ensured that the Cape remained a highly unequal society, with ramifications for present-day South Africa.
GDP in the Dutch Cape Colony: The national accounts of a slave-based society
2012
New estimates of GDP of the Dutch Cape Colony (1652-1795) suggest that the Cape was one of the most prosperous regions during the eighteenth century. This stands in sharp contrast to the perceived view that the Cape was an "economic and social backwater", a slave economy with slow growth and little progress. Following a national accounts framework, we find that Cape settlers' per capita income is similar to the most prosperous countries of the time -Holland and England. We trace the roots of this result, showing that it is partly explained by a highly skewed population structure and very low dependency ratio of slavery, and attempt to link the eighteenth century Cape Colony experience to twentieth century South African income levels.
A History With Evidence: Income Inequality In the Dutch Cape Colony
econrsa.org
The arrival of European settlers at the Cape in 1652 marked the beginning of what would seemingly become an extremely unequal society, with ramifications into modern-day South Africa. In this paper, we measure the income inequality at three different points over the first century of Dutch rule at the Cape. What emerges from the study is a society characterised by severe inequality, with a relatively (and increasingly) poor farming population combined with pockets of wealth. The inequality is driven largely by wheat and, especially, wine production, which gave rise to an elite. Historical evidence supports our findings: Amongst others, the imposition of sumptuary laws in 1755 is closely correlated with a more segmented elite which includes both alcohol merchants and (wine) farmers. We compare these measures to those of other regions and time-periods in history. Although the exact level of inequality is determined to a large extent by our assumptions, the Cape Colony registers one of the highest Gini-coefficients in pre-industrial societies. This provides some support to verify the Engerman-Sokoloff hypothesis that initial levels of high inequality would give rise to growth-debilitating institutions, resulting in higher inequality and underdevelopment. * Prepared for the Special Edition: A history of poverty and inequality in South Africa, Economic History of Developing Regions (December 2010). The authors would like to thank Jan Luiten van Zanden and an anonymous referee for their valuable comments.
The substitutability of slaves: Evidence from the eastern frontier of the Cape Colony
Economic History of Developing Regions, 2019
The substitutability of the economic institution of slave labour has often been assumed as a given. Apart from some capital investment to retrain slaves for a different task, essentially their labour could be substituted for any other form of labour. This paper questions that assumption by using a longitudinal study of the Graaff-Reinet district on the eastern frontier of South Africa's Cape Colony. We calculate the Hicksian elasticity of complementarity coefficients for each year of a 22-year combination of cross-sectional tax datasets (1805-1828) to test whether slave labour was substitutable for other forms of labour. We find that slave labour, indigenous labour and settler family labour were not substitutable over the period of the study. This lends credence to the finding that slave and family labour were two different inputs in agricultural production. Indigenous khoe labour and slave labour remain complements throughout the period of the study even when khoe labour becomes scarce after the frontier conflicts. We argue that the non-substitutability of slave labour was due to the settlers' need to acquire labourers with location-specific skills such as the indigenous khoe, and that slaves may have served a purpose other than as a source of unskilled labour, such as for artisan skills or for collateral.
Institutions for the taking: property rights and the settlement of the Cape Colony, 1652-1750
The Economic History Review
Institutions for the taking: property rights and the settlement of the Cape Colony, 1652-1750 † By ALAN DYE and SUMNER LA CROIX * We examine the formation of property rights in land during the early settlement by the Dutch of the Cape Colony at the southern tip of Africa. After its founding in 1652 as a provisioning outpost for ships of the Dutch East India Company (VOC), the colonial government promoted settlement initially by granting land with well-specified and enforced property rights in restricted zones near Cape Town. By 1714 it transitioned to accommodate rapidly expanding settlement by creating a weaker form of property rights, the loan farm, which was imprecisely defined and had limited government enforcement. We develop a profit-maximizing monopsony model to explain the VOC's choice to transition from the better-specified land grant to the less well-specified loan farm. We conclude that the decline in the population size and ability of the Khoikhoi, the Cape's original inhabitants, to organize effective resistance to the Dutch invasion was critical to the transition, as it lowered the costs of private enforcement of settlers' territorial claims. The choice of property rights thus enabled and encouraged the rapid taking by European settlers of the western Cape of Africa for the expansion of the Dutch colony's pastoral economy.
2005
In 1652, the Dutch East India Company (VOC) established a company colony at the Cape of Good Hope to serve as a refreshment station for VOC ships sailing between Europe and Asia. This paper analyzes how the Company's policies on settlement of frontier lands and property rights established in those lands evolved between 1652 and 1795. We first explain why the VOC initially maintained rigid controls on frontier settlement for the Colony's first 50 years and then focus on why and how the new system of land claims and land tenure at the frontier-the "loan farm" system-evolved between 1700 and 1714. Our analysis begins by identifying the economic, demographic, social, and political factors that facilitated the development of and the transition to the loan farm system. Second, we consider why the VOC choose to establish a system of land claims and tenure with features almost approximating private property; why it choose to establish a limited Smithian-style government in frontier regions; and why there was conflict over these choices between VOC directors, colonial governors, and free settlers. Third, we show how new pressure from indigenous peoples living at the frontier of graziers' lands induced changes in the loan farm system. We conclude with an evaluation of the loan-farm system and find that it was roughly consistent with efficient settlement and use of the relatively low-value frontier lands.
An Economic History of South Africa: Conquest, Discrimination and Development (a review)
African Studies Quarterly, 2008
This book seeks to "...provide a broad overview of the character, transformation, initial growth, and final decline of South Africa's economy, and an interpretation of the major factors that explain these developments" (p. xviii). It does not contain original research, but rather aspires to be a synthesis of information already in existence. If I remember correctly, it was Harrison White who thanked his professional colleagues in the "Acknowledgments" section of his Identity and Control by stating that all ideas are already present in networks from which we borrow, thus legitimizing once again the important role of "synthesizers" in social science. Feinstein ś synthesis is astonishing and of high quality, and the book ś main arguments are skillfully argued. The author first makes observations about South Africa's economy in an international context. Most notably, growth in South Africa appears to have been slow up to 1870; from 1870 to 1913, there was "...the early development of globalization," with expansion and prosperity