Iviwe Tshiamo My 2025 Notes
Sociology 144
Week 1: 21 July: Magubane 1979
The Political Economy of Gold Mining and Its Impact on South Africa
Impact of Gold Mining on South Africa's Economy
Gold mining has historically been the cornerstone of South Africa's political and
economic development. Since the discovery of gold on the Witwatersrand in 1884,
the industry has significantly shaped the country's economic structure. It catalyzed
the transition from an agrarian society to an industrialized nation by fostering the
growth of related industries such as steel, chemicals, machinery, and
transportation.
Gold's dominance is reflected in its contribution to exports and national income. For
example, in 1910, gold accounted for approximately 80% of South Africa's exports,
and by the mid-20th century, it remained a major source of foreign exchange, with
nearly half of the country's exports still deriving from gold and its by-products like
uranium. The industry generated substantial employment, with over 400,000
workers involved, including a large proportion of African miners subjected to harsh
conditions and low wages.
The profits generated from gold mining fueled industrial expansion and
infrastructural development, but this growth was heavily dependent on the
exploitation of mineral resources and low-cost African labor. Consequently, the
industry contributed to the formation of a deformed capitalist economy
characterized by deep inequalities and racial segregation, which continue to
influence South Africa's socio-economic landscape today.
British Imperialism and Control of Gold Industry
From its inception, the gold industry in South Africa was dominated by British
imperialist interests. The ownership and control of major mining companies, such as
the Central Mining and Investment Corporation, were concentrated in London and
other British financial centers. The industry was characterized by monopolistic
practices, with a few powerful mining houses, notably Anglo-American and De
Beers, controlling most of the output.
The British government and financial institutions exerted significant influence over
the sector through secretive organizations like the Chamber of Mines, which acted
as an imperialist instrument to safeguard British economic interests. This institution
operated as a highly secretive body, often aligned with imperialist policies, and was
instrumental in shaping labor, trade, and investment policies favorable to British
capital.
1
,Iviwe Tshiamo My 2025 Notes
British imperialism used the industry not only for economic gains but also as a
strategic tool to maintain political dominance in South Africa. The control over gold
resources allowed Britain to influence the political stability and economic policies of
the region, ensuring that profits flowed offshore and that South Africa remained an
appendage of the imperialist economic system.
Afrikaner Nationalist Capitalism and Industrialization
The rise of Afrikaner nationalist capital after 1910 marked a significant shift in the
control and direction of South Africa’s gold industry. Afrikaner entrepreneurs and
capitalists sought to challenge British dominance by establishing their own financial
institutions, such as SANLAM and Volkskas, and by gaining control over mining
enterprises.
This nationalist movement aimed to develop a more diversified economy through
industrialization, funded largely by taxing gold profits. The Afrikaner nationalist
capitalists promoted policies of state-led industrial growth, including establishing
the Industrial Development Corporation (IDC) in 1940, to foster domestic industries
and reduce reliance on foreign capital.
The Afrikaner capitalists also sought to integrate the gold industry into broader
economic plans, emphasizing the importance of protecting and expanding their
interests through state intervention, tariffs, and monopolies. Their efforts
contributed to the gradual shift of economic power from British to Afrikaner hands,
which was intertwined with the political consolidation of Afrikaner nationalism and
the institutionalization of apartheid policies.
Exploitation of African Labor in Gold Mining
A central feature of South Africa’s gold industry has been the institutionalized
exploitation of African labor. From the beginning, African workers were subjected to
brutal conditions, low wages, and racial segregation. The industry relied heavily on
migrant labor, recruited from various regions, often under coercive and
discriminatory policies.
The industry created a racialized labor system that entrenched economic
inequalities and laid the groundwork for apartheid. African miners worked in
dangerous conditions, with minimal safety measures, and were paid wages that
kept them in poverty. The industry’s profitability depended on maintaining this low-
cost labor supply, which was enforced through legislation, pass laws, and violent
suppression of resistance.
This exploitation was not incidental but systematically embedded in the social and
political structures of South Africa, ensuring that the benefits of gold profits accrued
to white capitalists and the settler state while African workers remained
impoverished and marginalized.
2
,Iviwe Tshiamo My 2025 Notes
Gold's Role in the International Monetary System
South Africa’s gold industry is deeply integrated into the global monetary system.
The international gold standard, established in 1815, positioned gold as the ultimate
medium of exchange and a store of value. South Africa became a key supplier of
gold to the world market, with its gold exports acting as a stabilizing factor for the
international monetary system.
The fixed price of gold, historically set at $35 per ounce, was maintained for many
decades, and South Africa’s gold output continually supplied the international
market, influencing currency values and global economic stability. The country’s
vast gold reserves and production capacity meant that fluctuations in world demand
and prices directly affected its economy.
South Africa’s gold exports helped stabilize its balance of payments, and the
international monetary system’s reliance on gold meant that South Africa played a
pivotal role in maintaining global financial stability. The country’s position as the
world’s leading gold producer gave it significant leverage within the international
system, although this also made its economy vulnerable to global price fluctuations
and monetary policies.
Political Economy and Social Structure of Mining
The political and economic structures of South Africa’s gold industry have been
instrumental in reinforcing racial and class divisions. The industry’s super-profits
were sustained through a racialized system that privileged white capitalists and
marginalized African workers.
The state, under settler dominance, institutionalized segregation and racism, which
became central to the industry’s operation. The white settler state created a social
order where African labor was exploited under harsh conditions, and the benefits of
mineral wealth were concentrated in the hands of a white minority.
This social structure was maintained through legislation, such as pass laws and
labor policies, and through the control of key institutions like the Chamber of Mines,
which acted as a guardian of capitalist interests. The racial division of labor and
wealth became a defining feature of South Africa’s social fabric, with the industry
serving as a model for apartheid’s racial policies.
Struggles Over Control of Gold Mining Capital
Throughout the 20th century, there were intense political and economic struggles
over control of South Africa’s gold industry. Initially dominated by British interests,
Afrikaner nationalists sought to gain a larger share of profits and influence.
In the 1950s, Afrikaner nationalist capitalists, led by institutions like SANLAM and
Volkskas, attempted to assert control over key mining companies such as Central
3
, Iviwe Tshiamo My 2025 Notes
Mining and Investment Corporation. These efforts were often thwarted by
international finance interests, including British and American corporations, which
sought to maintain their dominance.
A notable incident was the attempted takeover of Central Mining in 1957, which was
prevented by a coalition of international financiers and South African capitalists.
This struggle reflected broader tensions between imperialist and nationalist forces
and underscored the strategic importance of control over mineral resources for
political sovereignty.
The battle for control was not merely economic but also political, as Afrikaner
nationalists aimed to assert economic independence and consolidate political
power, challenging British imperial influence and shaping South Africa’s future
trajectory.
Urbanization and Capitalist Mode of Production in South Africa
The growth of South African cities is intricately linked to the capitalist mode of
production centered around gold mining and related industries. Urbanization was
driven by the need for a concentrated labor force, technological development, and
infrastructure to support mining operations.
Cities like Johannesburg emerged as epicenters of industrial activity, with their
spatial and structural development reflecting the dynamics of capital accumulation
and racial segregation. The urban landscape was shaped by policies that enforced
racial zoning, with African workers confined to townships and mining compounds,
while white populations occupied privileged residential areas.
The city’s growth also facilitated the reproduction and circulation of capital,
reinforcing social inequalities. The infrastructure—roads, railways, housing—was
designed to serve the interests of the mining industry and the settler economy,
embedding the capitalist logic within the urban environment.
In sum, South Africa’s urbanization cannot be understood outside the framework of
the broader political economy, which perpetuated racial divisions, exploited labor,
and prioritized mineral resource extraction as the foundation of national
development.
This comprehensive synthesis captures the core themes of the materials,
emphasizing the interconnectedness of gold mining, imperialism, racial exploitation,
and urban development within South Africa’s political economy.# The Political
Economy of Gold Mining and Its Impact on South Africa
Impact of Gold Mining on South Africa's Economy
Gold mining has historically been the cornerstone of South Africa's political and
economic development. Since the discovery of gold on the Witwatersrand in 1884,
4
Sociology 144
Week 1: 21 July: Magubane 1979
The Political Economy of Gold Mining and Its Impact on South Africa
Impact of Gold Mining on South Africa's Economy
Gold mining has historically been the cornerstone of South Africa's political and
economic development. Since the discovery of gold on the Witwatersrand in 1884,
the industry has significantly shaped the country's economic structure. It catalyzed
the transition from an agrarian society to an industrialized nation by fostering the
growth of related industries such as steel, chemicals, machinery, and
transportation.
Gold's dominance is reflected in its contribution to exports and national income. For
example, in 1910, gold accounted for approximately 80% of South Africa's exports,
and by the mid-20th century, it remained a major source of foreign exchange, with
nearly half of the country's exports still deriving from gold and its by-products like
uranium. The industry generated substantial employment, with over 400,000
workers involved, including a large proportion of African miners subjected to harsh
conditions and low wages.
The profits generated from gold mining fueled industrial expansion and
infrastructural development, but this growth was heavily dependent on the
exploitation of mineral resources and low-cost African labor. Consequently, the
industry contributed to the formation of a deformed capitalist economy
characterized by deep inequalities and racial segregation, which continue to
influence South Africa's socio-economic landscape today.
British Imperialism and Control of Gold Industry
From its inception, the gold industry in South Africa was dominated by British
imperialist interests. The ownership and control of major mining companies, such as
the Central Mining and Investment Corporation, were concentrated in London and
other British financial centers. The industry was characterized by monopolistic
practices, with a few powerful mining houses, notably Anglo-American and De
Beers, controlling most of the output.
The British government and financial institutions exerted significant influence over
the sector through secretive organizations like the Chamber of Mines, which acted
as an imperialist instrument to safeguard British economic interests. This institution
operated as a highly secretive body, often aligned with imperialist policies, and was
instrumental in shaping labor, trade, and investment policies favorable to British
capital.
1
,Iviwe Tshiamo My 2025 Notes
British imperialism used the industry not only for economic gains but also as a
strategic tool to maintain political dominance in South Africa. The control over gold
resources allowed Britain to influence the political stability and economic policies of
the region, ensuring that profits flowed offshore and that South Africa remained an
appendage of the imperialist economic system.
Afrikaner Nationalist Capitalism and Industrialization
The rise of Afrikaner nationalist capital after 1910 marked a significant shift in the
control and direction of South Africa’s gold industry. Afrikaner entrepreneurs and
capitalists sought to challenge British dominance by establishing their own financial
institutions, such as SANLAM and Volkskas, and by gaining control over mining
enterprises.
This nationalist movement aimed to develop a more diversified economy through
industrialization, funded largely by taxing gold profits. The Afrikaner nationalist
capitalists promoted policies of state-led industrial growth, including establishing
the Industrial Development Corporation (IDC) in 1940, to foster domestic industries
and reduce reliance on foreign capital.
The Afrikaner capitalists also sought to integrate the gold industry into broader
economic plans, emphasizing the importance of protecting and expanding their
interests through state intervention, tariffs, and monopolies. Their efforts
contributed to the gradual shift of economic power from British to Afrikaner hands,
which was intertwined with the political consolidation of Afrikaner nationalism and
the institutionalization of apartheid policies.
Exploitation of African Labor in Gold Mining
A central feature of South Africa’s gold industry has been the institutionalized
exploitation of African labor. From the beginning, African workers were subjected to
brutal conditions, low wages, and racial segregation. The industry relied heavily on
migrant labor, recruited from various regions, often under coercive and
discriminatory policies.
The industry created a racialized labor system that entrenched economic
inequalities and laid the groundwork for apartheid. African miners worked in
dangerous conditions, with minimal safety measures, and were paid wages that
kept them in poverty. The industry’s profitability depended on maintaining this low-
cost labor supply, which was enforced through legislation, pass laws, and violent
suppression of resistance.
This exploitation was not incidental but systematically embedded in the social and
political structures of South Africa, ensuring that the benefits of gold profits accrued
to white capitalists and the settler state while African workers remained
impoverished and marginalized.
2
,Iviwe Tshiamo My 2025 Notes
Gold's Role in the International Monetary System
South Africa’s gold industry is deeply integrated into the global monetary system.
The international gold standard, established in 1815, positioned gold as the ultimate
medium of exchange and a store of value. South Africa became a key supplier of
gold to the world market, with its gold exports acting as a stabilizing factor for the
international monetary system.
The fixed price of gold, historically set at $35 per ounce, was maintained for many
decades, and South Africa’s gold output continually supplied the international
market, influencing currency values and global economic stability. The country’s
vast gold reserves and production capacity meant that fluctuations in world demand
and prices directly affected its economy.
South Africa’s gold exports helped stabilize its balance of payments, and the
international monetary system’s reliance on gold meant that South Africa played a
pivotal role in maintaining global financial stability. The country’s position as the
world’s leading gold producer gave it significant leverage within the international
system, although this also made its economy vulnerable to global price fluctuations
and monetary policies.
Political Economy and Social Structure of Mining
The political and economic structures of South Africa’s gold industry have been
instrumental in reinforcing racial and class divisions. The industry’s super-profits
were sustained through a racialized system that privileged white capitalists and
marginalized African workers.
The state, under settler dominance, institutionalized segregation and racism, which
became central to the industry’s operation. The white settler state created a social
order where African labor was exploited under harsh conditions, and the benefits of
mineral wealth were concentrated in the hands of a white minority.
This social structure was maintained through legislation, such as pass laws and
labor policies, and through the control of key institutions like the Chamber of Mines,
which acted as a guardian of capitalist interests. The racial division of labor and
wealth became a defining feature of South Africa’s social fabric, with the industry
serving as a model for apartheid’s racial policies.
Struggles Over Control of Gold Mining Capital
Throughout the 20th century, there were intense political and economic struggles
over control of South Africa’s gold industry. Initially dominated by British interests,
Afrikaner nationalists sought to gain a larger share of profits and influence.
In the 1950s, Afrikaner nationalist capitalists, led by institutions like SANLAM and
Volkskas, attempted to assert control over key mining companies such as Central
3
, Iviwe Tshiamo My 2025 Notes
Mining and Investment Corporation. These efforts were often thwarted by
international finance interests, including British and American corporations, which
sought to maintain their dominance.
A notable incident was the attempted takeover of Central Mining in 1957, which was
prevented by a coalition of international financiers and South African capitalists.
This struggle reflected broader tensions between imperialist and nationalist forces
and underscored the strategic importance of control over mineral resources for
political sovereignty.
The battle for control was not merely economic but also political, as Afrikaner
nationalists aimed to assert economic independence and consolidate political
power, challenging British imperial influence and shaping South Africa’s future
trajectory.
Urbanization and Capitalist Mode of Production in South Africa
The growth of South African cities is intricately linked to the capitalist mode of
production centered around gold mining and related industries. Urbanization was
driven by the need for a concentrated labor force, technological development, and
infrastructure to support mining operations.
Cities like Johannesburg emerged as epicenters of industrial activity, with their
spatial and structural development reflecting the dynamics of capital accumulation
and racial segregation. The urban landscape was shaped by policies that enforced
racial zoning, with African workers confined to townships and mining compounds,
while white populations occupied privileged residential areas.
The city’s growth also facilitated the reproduction and circulation of capital,
reinforcing social inequalities. The infrastructure—roads, railways, housing—was
designed to serve the interests of the mining industry and the settler economy,
embedding the capitalist logic within the urban environment.
In sum, South Africa’s urbanization cannot be understood outside the framework of
the broader political economy, which perpetuated racial divisions, exploited labor,
and prioritized mineral resource extraction as the foundation of national
development.
This comprehensive synthesis captures the core themes of the materials,
emphasizing the interconnectedness of gold mining, imperialism, racial exploitation,
and urban development within South Africa’s political economy.# The Political
Economy of Gold Mining and Its Impact on South Africa
Impact of Gold Mining on South Africa's Economy
Gold mining has historically been the cornerstone of South Africa's political and
economic development. Since the discovery of gold on the Witwatersrand in 1884,
4
