Working Life - Factories, Township and Popular Culture 1886 - 1940 - New Factories, New Workers

From the book: Working Life - Factories, Township and Popular Culture 1886 - 1940 by Luli Callinicos

Topic

Today the industrial working class is more numerous and better organised on the Rand than here else in Africa. More and more workers are employed in factories, and their lives are shaped by this fact. Yet less than sixty years ago the manufacturing industry hardly existed except tall, craft-based industries, or repair shops for the mines. By 1943 South Africa’s factories producing more wealth than her gold mines.

How did this spectacular development occur so rapidly, especially in a colony whose capital resources were largely controlled by Britain?

This section examines

• The growth of manufacturing which today employs such a large work force
• How South African capital was developed with government help to finance the factories
• How the changing labour needs of the manufacturing industry produced a new kind of worker.

An early assembly line in a motor car plant, showing how mass production divided jobs into smaller tasks, thus speeding up production.

Factories start manufacturing

We learned that World War I stimulated industry because Britain was unable to deliver goods to South Africa during the period of the war. Many new factories were set up in South Africa during this time. Many factory owners now became capitalists — they used their capital, which they had either accumulated or borrowed, to set up machines and employ a number of workers to do the productive work, while they themselves managed the factory and supervised the work.

However, the progress of the manufacturing industry was uneven — it did not always develop at the same rate. In spite of the boost to South African manufacturing during the war, by 1920 more goods were imported than ever before. Why was this?

After the war, the British economy slowly recovered and went back into full production. American factories, too, were expanding and there was fierce competition for new customers. Many overseas factories were offering their products at ‘bargain’ prices.

This was called ‘dumping’. The new South African factories found it hard to match that price and so could not sell their products easily. In 1923 the consultant engineer for Portland cement pointed out:

‘The demand for cement in South Africa is well maintained and were it not for the continuance dumping by foreign manufacturers, the company’s own business would show considerable expansion.

But the basic reason why so many goods continued to be imported was that South African factories had not developed sufficiently — in numbers or in output to keep pace with steadily growing market demands The most important drawback remained: South Africa did not have the capital to develop the factories that were needed. We have seen that much the profit from the mining industry went back to investors in Britain.

The growing strength of manufacturers

But despite its uneven growth, the South African manufacturing industry had a long-term future. Manufacturers soon found that they were gaining important allies.

Some mining companies were beginning to invest capital into local industry for products that the mine needed all the time, like cement and dynamite.

Many traders also began to support the development of South African manufacturing. During the war when imported goods were nearly all stopped, trade suffered badly. Traders were therefore grateful whet South African factories began to produce and profit picked up again.

Among the large-scale commercial farmers, too, there were those who supported the development of local manufacturing. The farmers and manufacturer needed each other. A properly organised manufacturing industry would provide a regular market for the raw materials of the farmers.

White workers also supported the growth of local industry. They used their political weapon — the vote— to put pressure on government to create more factories and thus more jobs.

Government help

In 1924 the Smuts government was swept from power— we have seen how white workers voted against Smuts after the crushing of the 1922 strike. Others, too, including some manufacturers, saw Smuts as a tool of mine owners and British imperial capital. Over half the profits from the mines were going out to foreign countries. To make things worse, unemployment and inflation were rising.

The new Pact government, on the other hand, had a policy of supporting local industry. As we saw in the last section, the Pact government was an alliance between two parties. The National Party wanted to develop South African, and not foreign, capital; the Labour Party wanted more industry in South Africa so that there would be more jobs for workers.

So the new government wanted to encourage local industry as much as possible. It wanted to develop a South African or national capitalist class, which keep its profits in South Africa. These profits serve the needs of the country and especially the Afrikaner people.

In 1925 the Pact government passed the Tariff Act, protected local industry by taxing many more imported goods. A tariff is a tax, which makes foreign, more expensive and thus encourages people to buy local goods because they are cheaper. Local businessmen are encouraged to build up more factories because they have a market for their goods.

The result of the Act was that the manufacturing industry began to grow again. The chart on this page shows the progress made by manufacturing in the four years after the Tariff Act. As the chart shows, the established factories grew in size and profits. Small businesses grew into much bigger firms. In 1929 the President of the Federated Chamber of Industries remarked that fewer factories were being run by the owner — as the factories grew, experts in management and money control were directing the firms.

By 1931, the manufacturing industry was producing nearly one sixth of the country’s wealth. Furthermore, industries like food and canning, footwear and cigarettes were also helping the commercial farmers, because the manufacturers were turning more and more to local raw materials — local farming products received the greatest protection from the Tariff Act, so they were cheaper.

In only four years, the value of goods produced by South African factories jumped by R69 million, and profits by R36 million. These profits were then reinvested to develop the manufacturing industry further. Although this remarkable growth provided jobs for 26 000 more workers, the wages of the semi-skilled remained very low.

The Pact government’s labour policy also helped the manufacturing industry, as this section will show later. However, since the government had strong white worker support, both from the largely English-speaking Labour Party and from Afrikaner workers who voted for the National Party, it had to balance the interests of the white workers against the labour needs of the manufacturers. This was not easy to do, because the interests of the employers were opposed to the interests of their workers. A wage was income for the worker, but a cost for the employer, and the employer was concerned to keep costs down as much as possible in order to increase profits.

The legacy of the mines

In South Africa, the manufacturer had inherited from the mines a system of cheap black labour.

As was shown in Gold and Workers, black labour was cheap because it was based on migrant labour, so that the land helped to support the low wages given by the mining companies.

It remained cheap through a system of control, which included the pass system, contracts and com- pounds. This system made it very difficult for black workers to resist this ultra-exploitation by bargain for better wages and conditions.

The system worked so well that it was adopted by other large employers of labour on the Rand — for example, the municipalities and the railways.

The manufacturers inherited from the mines a more expensive white labour force. Gold and Workers traces the history of white labour on the mines — how at first they were able to charge more for their labour because their skills were badly needed and scarce; how they arrived from other industrialised countries with experience of worker organisation; and how (after 1922 strike) they also used the power of the vote.

The manufacturing industry in South Africa the fore entered the capitalist system with a racially divided (cheap black and expensive white) system of labour

Labour needs of the manufacturing industry

The labour needs of the factories were similar to those of the mines but also different in certain respects. The labour process of manufacturing — that is, the way work was organised to produce goods — was different. Before World War I, the labour process in manufacturing was based on jobbing.

In the early years, most factories made products order. But after the war the nature of production began to change in the new, larger factories (mostly clothing, footwear and furniture). As larger orders came in, factories began to produce fewer items in larger numbers. They began mass produce with the aid of new machines.

Machines were expensive, but they had a number of advantages for the employer. They speeded up the work and they usually produced a more accurate product with a better finish. Even more important, machines enabled employers to cut down on the use of the organised, highly paid, skilled workers.

With machines employers were able to re-organise production by breaking up jobs into smaller tasks done by large numbers of less skilled and lower-paid workers. As a result, large quantities of the same product were produced more cheaply in every shift.

The result of mass-production was that factories needed mainly semi-skilled labour (rather than the small group of craft workers, backed by a massive number of labourers, which the mines had required their early years).

As the factories developed from the mid- 1 920s onwards, they found, with the help of the government, a ready-made labour supply in the towns. With the growing number of townspeople settling Rand, and the hardships they suffered unemployment.

These two factors — the use of semi-skilled labour, which was cheaper than skilled labour, and a reserve of in the towns — created a new kind of worker on the Rand. One result was that the position of the craft workers was weakened. They lost ground through the deskilling of their work.

Factory owners employed both black and white workers—all at low wages because they were new to industry and had little bargaining power. However, the Pact government stepped in to encourage manufacturers to employ whites in preference to blacks: the so-called labour ‘civilised labour’ policy.

The Labour Party wing of the Pact government would not accept that Africans were workers. They Argued that Africans were still tied to the land and were only part-time wage labourers. Nor would they accept that there was a large black population settled in the towns.

The Standard

Depression

South African manufacturing received a hard knock when most of the industrialised, capitalist countries were hit by a severe depression. South Africa in the Depression describes the causes and nature of this disaster. In South Africa, thousands of people were laid off — often, black workers were the first to be fired.

Factories slowed down, or even stopped production. The Pact government’s policy of putting ‘South Africa first’ did not guarantee steady profits. South Africa still relied heavily on British capital and world trade, and was influenced by the rise and fall of the business cycles of the capitalist world economy.

On the other hand, the South African economy recovered more rapidly than most other countries. South Africa’s steady gold production saved her economy. Money, The Gold Standard and Devaluation shows that gold remained profitable. As an international measure of wealth, it was always in demand.

New support

When the depression was over, the two leading political parties formed an alliance in order to work towards economic recovery for South Africa — the manufacturers and commercial farmers, and even the mining companies, were ready to get together to put the South African economy ‘back on the road’.

Hertzog, the Prime Minister, had lost a lot of popularity during the depression and he felt he could govern the country without support. In 1933, the two main political parties, Hertzog’s National Party South African Party led by Smuts, agreed together. A year later, they joined together to new party, the United Party.

The new government protected manufacturing and farming by raising even further the price of imported goods. It also gave bonuses to firms or farmers exporting (except gold, diamonds and sugar). Furthermore, the government was worried that militants might join forces with black workers to overthrow the capitalist system. Even if they did not succeed, their strikes and protests might set a bad resistance to black workers and plant the seed of violent resistance. This was a general anxiety amongst the class. For example, after the 1922 strike, Smuts confessed to parliament:

‘The fear that obsessed me above all things was that owing to the wanton provocation of the revolutionaries, there might be a wild, uncontrollable outbreak among the natives.’

White workers and the white unemployed were re protected, segregated from blacks and brought into the fold of white ruling class society. The Industrial Conciliation Act of 1924 (passed by the Smuts government) recognised the organisations of workers but not those of blacks, as we shall see next section.

The Pact government also backed up its ‘civilised policy with social welfare — help in education, care, and later housing — for the general upliftment of poor white people.

The ‘civilised labour’ policy was supported by the colour bar’ act — the Mines and Works Act —reserved skilled jobs for whites. The government further encouraged manufacturers to employ whites by rewarding them with lower taxes if they did so. In 1928,it also introduced the Wage Act, which was to push employers into paying ‘civilised’ wages. The idea was that if employers had to pay higher, they would prefer to employ whites. The Wage as only partly successful in this respect.

The Wage Act did succeed, though, in encouraging manufacturers to modernise their factories and invest in machines for mass-production. In that way, they afford to pay the higher, ‘civilised’ wages se production was speeded up. To that extent, the ‘civilised labour’ policy helped to develop the manufacturing industry.

The ‘civilised labour’ policy was most successful, however, in the large state industries, such as the railways. The white workers to realise that their jobs depended on government protection, and thus their employers gained the advantage of a willing labour force.

The government imposed a new tax on the mines, the Excess Profit Tax. This brought in more than twice as much revenue to the government — an extra R12 million — and provided most of the money to help local industries, including the state-run electricity supply (ESCOM), the railways, and ISCOR.

How gold helped manufacturing

From 1933, there was a burst of industrial growth in South Africa. Production more than doubled between 1933 and 1939. Gold sales soared after devaluation. The profits of the gold mining companies rose from about R25 million a year between 1913 and 1932, to R65 million a year between 1933 and 1939.

The mining interests were not always happy with the heavy taxes on their extra profits and they complained to the government (and especially to Smuts) about this extra taxation. But as more gold mines were opened and developed (the most important being the Far West Rand goldfields) the extra taxation was absorbed by the mines.

The increased gold sales also helped state industries in another way — South Africa was able to pay in gold for the heavy machinery needed to develop ISCOR.

Mining and foreign investment

The capital from the gold mines was also used to help the growth of manufacturing more directly. The more far-seeing mining companies had already begun to invest in manufacturing materials such as dynamite and cement.

In the l930s, some mining companies invested capital in established factories, while others started industrial concerns — Anglo-American in fertilisers and the engineering industry, for example; Union Corporation in pulp and paper milling (SAPPI); and Anglo Transvaal in engineering, glass, cement and fishing.

South Africa’s economic growth attracted outside capital, too. Most of this was invested by large British and American companies wanting to establish South African branches of their firms. They did this partly to avoid paying the heavy protective tariffs, but also because steel was inexpensive. For investors, these were important factors because they kept down the cost of production.

Branches of such big firms as Nestlé, Cadbury, Ford, General Motors, McKinnon Chain (US), Dunlop, Firestone, Siemens, Babcock and Wilcox, Dorman Long, Stewarts and Lloyds, Davy Ashmore, and General Electric were set up during this time. These today are part of huge multi-national concerns with branches all over the world.

The Growth of the Manufacturing Industry Compared with Other Industries

The manufacturing industry made steady progress from World War I onwards — it more than doubled its income between 1912 and 1920. It continued to develop even during the Depression (see the figures for 1930-1935), and by 1945 had surpassed mining.(The value of gold mining, however, goes beyond the income it brings in, because gold is always in demand — see Money, the Gold Standard and Devaluation.)

Manufacturing in 1940

By the end of the 1930s, manufacturing had made v good progress. It had, in fact, expanded faster than any other sector of industry, as the chart on this pa~ shows. By 1940, South African factories were employing 236 000 workers, most of whom were already black (93 000 were whites).

During the 1930s, the industries of blankets, clothing, footwear, canning, sweets, soap, cigarettes and tobacco had expanded. These were light consumer industries, producing goods, which people needed to buy regularly. They were not yet very large — the average factory employed only 33 workers — but the were already beginning to change production by dividing jobs into smaller tasks, repeated many time in a shift (mass production). Machines for light industries did not require large amounts of capital f investment, so they were established more easily that the metal industries.

The World War boom

In 1939 war broke out again between Germany and Britain and France. For the second time in 25 years, the war spread across the world, and pulled in South Africa as part of the British Empire and the British economy.

During World War II, while millions of people were being killed, South African industry boomed. As in the previous war, foreign supplies were cut off, and South Africa was forced to turn to its own resources. The v was expected to drag on for many years, so it was necessary for the South African economy to become independent.

At this stage of its development, South Africa was well-placed for enormous growth: ISCOR was already producing the iron and steel needed to make machinery; coal and electric power were available an cheap; and there was enough capital from the gold boom to start all these new projects.

The government did not stop to count the costs of war, but immediately placed huge orders at good prices for war supplies with local factories. Hundreds of private investors, too, were eager to provide capital for all this new war industry, and to profit from its growth.

All these changes led to higher productivity and lower costs for the manufacturing industry. Bigger pi fits created more capital for investment, and massive growth resulted. In the six years between 1939 and 1945, manufacturing nearly doubled its output, from R164 million to R316 million. By 1943 it was producing more of the country’s wealth than gold mining.

Control of labour

Increased capital and the availability of raw materials were one aspect of this ‘success story’ — the other was ready supply of cheap labour. The ultra-low wages the mines set a pattern, which the manufactures were happy to follow. Low wages meant bigger more capital accumulation and growing factories.

The war led to more careful planning by the state. A Directorate of War Supplies was set up to study and age greater productivity at lower cost. It tried to fix wages and regulate disputes in terms of the War Measure of 1942. It did not succeed entirely in suppressing strikes and worker resistance, as we shall seen next section.

Nevertheless, this tighter control over the workers, in the name of the war, was important in lowering the production.

Conclusion

This section has shown how the manufacturing industry, after some early difficulties in getting started, got massive support both from the government and also from the other two main industries, mining and farming. It was thus able to grow very quickly under favourable economic conditions of war.

This section has also explained how manufacturing, as it switched to mass production, needed a new kind of worker — the semi-skilled, industrial worker, black or white, who lived in the towns. During the 1930s the working population of the Rand almost doubled.