Social capital and economic empowerment: Lessons for black South Africa from the Afrikaners of Vanderbijlpark

8 Feb 2022

In the 1940s, white Afrikaners in the former apartheid, Iscor-dominated town of Vanderbijlpark developed networks, trust and relationships to overcome poverty, joblessness and skills shortages.

The frustration around broad-based Black Economic Empowerment (BEE) legislation continues as poverty, unemployment and inequality remain high among black people while white people enjoy economic dominance because of their social capital.

The big irony is that even though black people enjoy political power, the apartheid “social closure” that barred them from participating in the economy still exists. Unfortunately, the current market-based BEE model does not adequately accommodate their economic aspirations because it failed to foster black ownership, management and control of the economy through employment, skills development and equity transfer. It has concentrated more on mobilising political and economic capital instead of social capital.

The ANC adopted the Reconstruction and Development Programme (RDP) that relied on handouts, and targeted small, medium and micro enterprises to promote empowerment. However, the RDP was later replaced by the neoliberal Growth, Employment and Redistribution (GEAR) strategy.

The biggest challenge with the market-driven empowerment legislation is that it does not address the social aspect of business that appeals to poor, rural and traditional communities. Many small business owners rely on political networks to access government tenders. Organisations that were set up to assist small businesses didn’t empower poor rural and urban black communities.

We know that, unlike most white families, many black families are large and diverse, and have been negatively impacted by years of racial exclusion – something that is still being felt to this day. Despite this negative history, black families have managed to participate in the economy through informal associations like stokvels which attract many poor people, are trust-based and help improve their quality of life. This is the kind of social capital on which BEE should be focusing.

It’s been said that history is a great teacher that offers valuable lessons for the present. When reflecting on BEE, it helps to look at an example from our recent past as it may provide some key insights regarding social capital and empowerment. Here I’m referring to Afrikaner Economic Empowerment (AEE), an early 20th-century government plan to uplift white Afrikaners through protected employment, skills development and welfare services.

According to economic history expert Grietjie Verhoef, the Helpmekaar Vereeniging (Mutual Support Society) and volkskapitalisme (people’s capitalism) were essential ingredients of Afrikaner social capital based on nationalism. In 1914, the former began to mobilise donations – a form of “economic capital” – from rich farmers and the savings of the small bourgeoisie and workers to start AEE.

Later in the 1930s, white Afrikaners initiated a class revolution of their own that saw a new coalition being formed between Afrikaner peasants, labourers, the small bourgeoisie, and emerging Afrikaner financial and industrial capital to push for a macroeconomic policy that advanced redistributive policies to increase the standard of living of workers.

In 1948, Afrikaner Nationalism became a powerful political force that determined the structure of the country’s policies on employment, skills development, education and entrepreneurship.

This AEE focused on the development of networks between Afrikaner families and religious institutions based on nationalistic sentiments that reinforced group cohesion. Furthermore, it operated on ethnicity or Afrikaner Nationalism, drawing Afrikaners across the country into that network to resolve massive, persistent poverty among Afrikaners and to restore their dignity.

In the 1930s, the Broederbond and the Afrikaner insurance company, Sanlam, held the “Eerste Ekonomiese Volkskongres” (First Economic People’s Congress) to advance AEE. Historians highlighted the significance of this event in terms of cultural and economic capital formation. Culturally, the Broederbond represented the Afrikaners’ cultural entrepreneurs and Sanlam Afrikaners’ business expertise. The other aspect of AEE was a new professional-managerial network between leaders.

The current pro-neoliberal BEE model undermines African traditional values such as cooperation, unity, trust and relationships prevalent in many black communities.

One place where this all played out was at Iscor (now ArcelorMittal South Africa – Amsa) in Vanderbijlpark. My own research showed how white Afrikaners in this former apartheid town developed networks, trust and relationships to overcome poverty, joblessness and skills shortage, and why today they enjoy most economic privileges. Language and religious discrimination provided whites an opportunity to build family and religious networks to foster group cohesion, mould their attitudes, and promote information-sharing while organisations such as Helpmekaar, the Iscor Club and the Sakekamer (Chamber of Commerce) were used to grow bridging social capital.

When Dr Hendrik van der Bijl founded Vanderbijlpark in 1943, his philosophy of town planning and community development provided the fullest possible measure of cultural and recreational activities. Since then, leaders of the Afrikaner community have used town space and Iscor to promote bonding capital that benefits the so-called “poor whites” – the early whites who settled in Vanderbijlpark. Afrikaner families were not only relied upon to provide a structured environment to interact in, but also became a medium through which they established networks and offered emotional and social support as well as financial aid.

In addition, whites developed bridging capital to connect people across cleavages that typically divided them (such as race, religion, nationalism and language). In Vanderbijlpark, various associations formed a “bridge” between friends, work colleagues and organisations. Afrikaans, in particular, was key to promoting cultural identity and unity both in the community, at schools, workplaces, sport and media. The Dutch Reformed Church played a major role in providing a moral code including trust and relationship between neighbours in the community and colleagues at Iscor.

The most famous organisation was the Iscor Club, formed in 1944. It triggered a sense of “community” and united various sporting codes and cultural activities which were used to build and maintain Afrikaner exclusive identity and unity.

Linking social capital connected whites to governmental organisations, businesses and NGOs – those higher up the hierarchy in which power, social status and wealth were provided to foster and promote Afrikaner entrepreneurship. In Vanderbijlpark, the Broederbond formed the Sakekamer in 1949 to encourage industrialists and entrepreneurs to open factories and businesses and to share in the economic prosperity that was attending the town’s growth into a city.

Former Sedibeng Sakekamer chairperson Klippies Kritzinger told me a few years ago that it was used as the official voice of the small business community. The Sakekamer was able to play this vital role of assisting Afrikaner entrepreneurs to grow because apartheid gave the state a political monopoly to unite and protect white Afrikaners, leaving most black people to suffer.

Since the late 1980s, Vanderbijlpark has undergone various stages of transformation. These included the privatisation of Iscor in 1989, radical desegregation, and the sale of Iscor to Amsa. Ironically, these changes favoured whites more than black people. At Iscor, most houses, including other non-core facilities built by the company to uplift white employees and families, were contracted out. Although the drop in house prices allowed many Africans to buy houses in Vanderbijlpark, the combined effect of labour market policies and the legacy of apartheid severely limited their ability to develop bonding social capital as a tool for empowerment.

Decades of racial segregation left black people in the workplace, schools and communities divided and this impeded their ability to foster social cohesion. Too few organisations were formed in Vanderbijlpark and its surrounding townships to promote bridging social capital.

Culturally, black people in the townships and the workplace were divided by religion and language, which, ironically, were central to the identity formation of white Afrikaners. Since 1994, there has been a rise of charismatic churches in black townships surrounding Vanderbijlpark, with promises of instant economic prosperity while traditional Afrikaner denominations declined. At Amsa, English has replaced Afrikaans as the dominant language, and this affected the ability of Africans to develop social cohesion among themselves.

After almost three decades of democracy, many black people still wait to taste the fruits that BEE were supposed to deliver. For them, the policy just remains words on a piece of paper. To truly enhance the broader participation of the majority in the economy, BEE should focus more on building business, training and communication capacity among rural and urban black people. This will help to facilitate information sharing, community networks and social mobilisation.

The current pro-neoliberal BEE model undermines African traditional values such as cooperation, unity, trust and relationships prevalent in many black communities.

Perhaps the powers that be should have another look at AEE to see how these qualities can be harnessed as “capital” to empower the poor. DM

Dr Jantjie Xaba is a lecturer in the Department of Sociology and Social Anthropology at Stellenbosch University. His PhD thesis was titled A Comparative Study of Afrikaner Economic Empowerment and Black Economic Empowerment: A Case Study of a former South African Parastatal in Vanderbijlpark.

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