The Economics of the Colour Bar

WILLIAM HAROLD HUTT was born in 1899. He was educated in London and served in the R.F.C. and R.A.F. from 1917 to 1919. After the war he studied at the London School of Economics. He worked for several years with Benn Brothers, London, and joined the University of Cape Town in 1928. He was appointed Professor of Commerce and Dean of the Faculty of Commerce in 1931 and has held this post ever since.

He has written several works on theoretical and applied economics. His books include The Theory of Collective Bargaining, 1930; Economists and the Public, 1936; The Theory of Idle Resources, 1939; Plan for Reconstruction, 1943; Keynesianism—Retrospect and Prospect, 1963. He has also written numerous articles in economic journals, including several dealing with economic aspects of South African colour problems.

Professor Hutt has long been a critic of racial policies in South Africa. His fears were aroused before the election in 1948 of the Afrikaner Nationalist Government. Through the Statute of Westminster (1931) the British Government had relinquished effective control over the constitutional development of South Africa. The 1934 South African Status Act took a further step in this direction and in 1937 Professor Hutt tried to arouse South African public opinion to the danger that the entrenched clauses in the constitution, which safeguarded inter alia the right of coloured men in the Cape to vote on the common roll, were being under-mind. He warned his adopted country through the columns of the Cape Times that it had carelessly torn up its constitution. For this he was rebuked by the paper for irresponsibility. Since 1948 Professor Hutt has consistently opposed the South African Government’s policy of apartheid.

In 1955 his passport was withdrawn by the Department of the Interior but returned after the matter had been raised in Parliament. In 1961, as South Africa was seceding from the Commonwealth, he argued in The Times that all South African citizens, irrespective of race, colour or creed should be offered British citizenship.

‘It is a striking historical fact that the development of capitalism has been accompanied by a major reduction in the extent to which particular religious, racial, or social groups have operated under special handicaps in respect of their economic activities; have, as the saying goes, been discriminated against. The substitution of contract arrangements for status arrangements was the first step toward the freeing of the serfs in the Middle Ages. The preservation of Jews through the Middle Ages was possible because of the existence of a market sector in which they could operate and maintain themselves despite official persecution. Puritans and Quakers were able to migrate to the New World because they could accumulate the funds to do so in the market despite disabilities imposed on them in other aspects of their life. The Southern states after the Civil War took many measures to impose legal restrictions on Negroes. One measure which was never taken on any scale was the establishment of barriers to the ownership of either real or personal property. The failure to impose such barriers clearly did not reflect any special concern to avoid restrictions on Negroes. It reflected rather, a basic belief in private property which was so strong that it overrode the desire to discriminate against Negroes. The maintenance of the general rules of private property and of capitalism have been a major source of opportunity for Negroes and have permitted them to make greater progress than they otherwise could have made. To take a more general, example, the preserves of discrimination in any society are the areas that are most monopolistic in character, whereas discrimination against groups of particular colour or religion is least in those areas where there is the greatest freedom of competition.’

MILTON FRIEDMAN, Capitalism and Freedom