South Africa's Energy Revolution
Apartheid’s Economic Model
South Africa’s Energy Revolution
Japanese scholars are likely to disagree with Solidarity’s Chairperson Flip Buys's analysis of the Meiji Restoration because he underemphasizes the critical role that energy played in Japan’s industrialization.
In the late 19th century, Emperor Meiji sent out several expeditions to investigate the economic development that took place during The Western Age of Dominance. Based on their advice, several reforms were implemented to break the feudal system so that Japan could industrialize. Japan’s industrial growth shattered the dogmatic Victorian theories of Western dominance such as Racial Superiority, Western Values, the Protestant Work Ethic, Western Culture, and the Christian Faith
The modern Western understanding of The Industrial Revolution originated in the works of the three great economists Thomas Malthus, David Ricardo, and Adam Smith. They believed that economic growth could be explained by studying the relationships of land, labor, and capital. Because only land is finite, property rights are at the center of modern constitutions and economic theory.
However, as the Industrial Revolution took place, Karl Marx wrote in Das Kapital that the Steam-Engine was “the prime mover” that resulted in the development of England. Today Marx's work is seen as discredited because of the collapse of the USSR and the inability of planned economies to compete with market economies. Communism failed, as F.A. Hayek argued, because a planner could not determine supply and demand as effectively as the price mechanism. But Hayek, in his rejection of Marx's work, missed the critical point that energy acted as the catalyst for economic growth.
The Japanese insight was articulated by the physicist and economist Hideaki Aoyama, who once said that "economists don't know what they're talking about” because they do not understand the relationship between entropy and wealth. Energy’s role during The Industrial Revolution was researched by Sir Anthony Wrigley, who taught economics at Cambridge and passed away in 2022 at the age of 91. During his career, he corresponded regularly with Hayek and Milton Friedman. Wrigley showed that the economic growth that took place in England during the industrial period would not have been exponential without an energy source such as coal. Organic societies that function on market principles alone will have their growth limited by the constraints of three low-density energy sources: photosynthesis, slavery, and draft animals. His work is consistent with Jared Diamond's conclusion in Guns, Germs, and Steel, i.e., that Europe’s ascendancy was a consequence of geography and little more.
In Energy and the English Industrial Revolution, Wrigley showed how societies like the Netherlands and Italy, which became modern, more free-market, and more democratic before England, had limited economic growth because there was no fixed energy source available (see the graph below).
England was the first country to industrialize because the coal deposits were found closer to the surface. In contrast, Italy and the Netherlands's development lagged because the coal deposits in the Limburg or Sardinia regions are located deep below the surface. Geography gave South Africa a crueler fate because our mines are deeper, and our rivers cannot support freight.
The Meiji expeditions came to this conclusion about the Industrial Revolution, and therefore they differ with today’s mainstream economists and agree in part with Karl Marx.
Today, many Afrikaners want to tell the story that our great grandparents elevated themselves out of poverty through the cultural organizations that were formed after the Anglo Boer War. These organizations had the noble goal of addressing the socio-economic conditions of that time, particularly the alcoholism, unemployment, illiteracy, and poverty cited by the 1932 Carnegie Commission’s Investigation on the Poor White Question in South Africa.
Unfortunately, from a physics point of view, it would have been impossible for those organizations to allow for exponential economic growth so that the Afrikaners could escape the deprivation of poverty.
Hendrik van der Bijl, Eskom’s first director, worked for Western Electric in the United States of America. He was invited back to South Africa with the aim of implementing a New Deal. The policy reforms led to various applications of energy in the economy. The nationalization of Eskom, the South African Railways and Harbours, Iscor, Denel, and other state institutions were all dependent on the availability of affordable coal. Energy was the catalyst for state-driven development and Affirmative Action for white South Africans.
Like the Meiji expeditions, the Apartheid elites instinctively understood The Law of Conservation of Energy, and the concept was integrated into South Africa's Economic Model with targeted technological growth at the center of Apartheid’s Total Strategy.
Today it is known as the Asian Tigers Model, but it should also be called Apartheid’s Economic Model
References
1. Buys, F. 2023. Look to Japanese Restoration not Russian Revolution. Politicsweb. [Online] June 29 , 2023.
2. Wrigley, Tony. 2011. Opening Pandora’s box: A new look at the industrial revolution. The Centre for Economic Policy Research (CEPR) . [Online] July 22, 2011.
3. Constable, John. 11. Energy, Entropy and the Theory of Wealth. Northumberland & Newcastle Society. [Online] February 2016, 11.
4. Buys, Flip. 2020. Lesse van Afrikaner-ekonomiese bemagtiging. Maroela Media. [Online] Augustus 7, 2020.