The long read: In the 1980s, South African libertarians set up a deregulated zone that they sold to the world as ‘Africa’s Switzerland’. It was a sham, but with its clusters of sweatshops, it was very modern – and in some ways it anticipated the world we live in today
In the 1980s, South African libertarians set up a deregulated zone that they sold to the world as ‘Africa’s Switzerland’. It was a sham, but with its clusters of sweatshops, it was very modern – and in some ways it anticipated the world we live in todaystandard globe shows an uneven mosaic of colours, pixelated more densely in Europe and Africa, easing out to broader stretches across Asia and North America.
Beginning in the 70s, the zone offered an alternative to the messiness of mass democracy, and therefore a way of preventing the destruction of a free economy that Friedman feared. Today the zone also holds out a promise cherished by much of the contemporary political right – that capitalism can exist without democracy.
was at the other. Its buildings were low-slung, made from cinder blocks patterned for ventilation, decoration and economy. The few urban areas featured a smattering of multistorey towers in reinforced concrete. Dirt roads wound down to collections of, round mud huts topped with thatched roofs, or to rectangular dwellings capped with sheets of corrugated iron.
Extending the technique of “divide and rule”, South Africa even made some Bantustans into pseudo-independent nations unrecognised by any other states. The first to gain this nominal independence was the Republic of Transkei in the Eastern Cape in 1976, followed by Bophuthatswana in 1977, Venda in 1979, and Ciskei in 1981. Under Bantustan policy, Black South Africans lost their South African citizenship and were made into citizens of homelands that many had never set foot in. Upwards of 3.
The commission praised the suppressed “free market spirit” of the Black community and hoped that Ciskei would be a showcase of a non-racial form of capitalism to influence the rest of the nation. Yet what came into existence bore little resemblance to the cultivation of an indigenous entrepreneurial class. The homeland that sold itself as “Africa’s Switzerland” was a caricature case of corporate welfare, overseen by state-funded union-busting security forces willing to murder.
Reports hailed an “economic boom” of rapid industrialisation and rising employment, but this relied on increasing aid flows from the South African government, with transfers of 120m rand in 1984 alone. A rise in the price of gold – one of the nation’s key exports – filled state coffers and allowed it to set up some of the world’s best investor incentives in the Bantustans.
The tragedy of the libertarian partnership with the police state was starkest in 1987. That year, Louw travelled to Dakar to meet members of the African National Congress in exile. He hoped to persuade the socialist ANC that privatisation was a better way to reform South Africa. Months later, the Black civil rights lawyer who had organised the meeting was found in the back seat of his own car bound and beaten to death by the Ciskei security forces.
“I think [Ciskei] is a beacon for all of us on South Africa, and I am very happy with what’s going on there,” he said. “Can we have a Ciskei here?” he asked of the United States. Like many other libertarians, he saw the height of economic freedom in the form of a state unburdened by representative democracy, stripped of its capacity to tax and redistribute, and trained by the threat of capital flight to always put investors’ needs first.
This was precisely how the existing labour market worked in apartheid South Africa, as Black workers moved in and out of white areas for employment but had limited rights of residence, let alone property ownership. For Louw and Kendall, the freedom to privately discriminate was central.
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