Why Nations Fail: The Origins of Power, Prosperity, and Poverty
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they generated demand for food and other agricultural products and created new economic opportunities for native Africans both in agriculture and trade.
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The Xhosa, in the Ciskei and Transkei, reacted quickly to these economic opportunities,
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As the agricultural economy developed, the rigid tribal institutions started to give way. There is a great deal of evidence that changes in property rights to land took place.
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Private property in land had weakened the chiefs and enabled new men to buy land and make their wealth, something that was unthinkable just decades earlier.
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This also illustrates how quickly the weakening of extractive institutions and absolutist control systems can lead to newfound economic dynamism.
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This new economic dynamism, not surprisingly,
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did not please the traditional chiefs, who, in a pattern that is by now familiar to us, saw this as eroding their wealth and power.
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Chiefs also resisted improvements made on the lands, such as the digging of irrigation ditches or the building of fences.
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start a vigorous African economic boom. Alas, it would be short lived. Between 1890 and 1913 it would come to an abrupt end and go into reverse.
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antagonism by European farmers who were competing with Africans.
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The Europeans wanted a cheap labor force to employ in the burgeoning mining economy, and they could ensure this cheap supply only by impoverishing the Africans.
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Both of the goals of removing competition with white farmers and developing a large low-wage labor force were simultaneously accomplished by the Natives Land Act of 1913.
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It stated that 87 percent of the land was to be given to the Europeans, who represented about 20 percent of the population.
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formation of the South African Apartheid regime,
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The 1913 legislation also included provisions intended to stop black sharecroppers and squatters from farming on white-owned land in any capacity other than as labor tenants.
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It had been created by European colonialism.
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As their economic incentives collapsed, the advances that had taken place in the preceding fifty years were all reversed.
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The political changes that had started to take place also went into reverse. The power of chiefs and traditional rulers, which had previously been in decline, was strengthened,
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1951, when the government passed the Bantu Authorities Act.
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As early as 1904 a system of job reservation for Europeans was introduced in the mining economy.
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banned from occupying any skilled job in the mining sector.
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This was the first incarnation of the famous “colour bar,” one of the several racist inventions of South Africa’s regime.
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Bantu Education Act.
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On the contrary, the success of the
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modern sector relied on the existence of the backward sector,
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This economic growth without creative destruction, from which only the whites benefited, continued as long as revenues from gold and diamonds increased. By the 1970s, however, the economy had stopped growing.
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Before its overthrow in 1994, the South African political system vested all power in whites, who were the only ones allowed to vote and run for office.
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At the time of the foundation of the Union of South Africa in 1910, the Afrikaner polities of the Orange Free State and the Transvaal had explicit racial franchises,
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but by the 1930s, blacks had been explicitly disenfranchised everywhere in South Africa.
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Black South Africans protested and rose up against the regime that did not recognize their basic rights and did not share the gains of economic growth with them.
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After the Soweto uprising of 1976, the protests became more organized and stronger, ultimately bringing down the Apartheid state.
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EIGHTEENTH-CENTURY ENGLAND—or more appropriately, Great Britain after the 1707 union of England, Wales, and Scotland—had a simple solution for dealing with criminals:
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Before the War of Independence, the convicted criminals, convicts, were primarily sent to the American colonies. After 1783 the independent United States of America was no longer so welcoming to British convicts, and the authorities in Britain had to find another home for them.
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On April 29, 1770, Cook landed in a wonderful inlet, which he called Botany Bay in honor of the rich species found there by the naturalists traveling with him.
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A fleet of eleven ships packed with convicts was on its way to Botany Bay in January 1788 under the command of Captain Arthur Phillip.
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Even though in 1787, Britain had inclusive political and economic institutions, this inclusiveness did not extend to convicts, who had practically no rights.
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A writ was issued to David Collins, the judge advocate there,
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Though Collins was less than enthusiastic about the case, and the jury was composed of the people sent to Australia to guard convicts such as the Cables, the Cables won.
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To reach this verdict Judge Collins didn’t apply British law; he ignored it. This was the first civil case adjudicated in Australia.
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Australia was not Britain, and its law would not be just British.
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Convicts had to perform “compulsory work,” essentially just another name for forced labor, and the guards intended to make money out of it.
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the alternative was to give them incentives.
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Convicts were given a set of tasks to do, and if they had extra time, they could work for themselves and sell what they produced.
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set up monopolies to sell goods to the convicts.
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In 1806 Britain appointed William Bligh,
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and he immediately challenged the rum monopolists. This would lead to another mutiny, this time by the monopolists, led by a former soldier, John Macarthur. The events, which came to be known as the Rum Rebellion,
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and he and his fellow sheep magnates became known as the Squatters,
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Squattocracy.
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the elite ultimately found it in their interest to create economic institutions that were significantly more inclusive than those in Austria-Hungary, Russia, Mexico, and Peru.
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Convicts were soon allowed to become entrepreneurs and hire other convicts. More notably, they were even given land after completing their sentences,
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