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Samenvatting The Economy - Economics (ECONOM01)
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Summary microeconomics weeks 1-8
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WEEK 3: LECTURE 1 (UNIT 5)Application Example 1: Collective Bargaining
Labour Relations Act, 66 of 1995;
• Established enabling framework for voluntary centralised bargaining by sector
• Minister of Labour can extend agreement to non-participants
The Basic Conditions of Employment Act, 75 of 1997
• Provides a floor of minimum standards and system of sectoral minimum wages in the
form of administrative determinations (see also Minimum Wage Act 2018.)
Three points :
1. Institution: Establishes framework whereby bargaining takes place. Sets a new
minimum wage (equivalent to shifting up of Angela’s reservation ICT. Still need to
determine how surplus is allocated - bargaining
2. Bargaining: Institutions determine who represents the workers (contested – see
National Union of Mineworkers (NUM) and the Association of Mineworkers and
Construction Union (AMCU) at Amplats between 2012 and 2014. Small firms argue
they are not party to the negotiations and are forced to accept higher wages more
suited to capital intensive large firms – see clothing (Nattrass and Seekings, 2014).)
Nattrass, N., Seekings, J. (2014) Job destruction in Newcastle: minimum wage-setting
and low-wage employment in the South African clothing industry. Transformation:
Critical Perspectives on Southern Africa, 84: 1–30.
• Collective action of workers vs. firm owners
3. Political economy: Contestation around institutions plus negotiation around
bargaining around allocation of surplus
Example 2: COVID-19 Vaccines
• The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS)
• South Africa, India, Kenya, Eswatini, Pakistan, Mozambique and Bolivia submitted
application for a waiver for all WTO members of certain provisions of the TRIPS
Agreement in relation to the “prevention, containment or treatment” of COVID-19.
• Bargaining role of COVAX
Protection of intellectual property , geographical indicators, trademarks, copyright,
patents etc.
Institution : TRIPS protects company against competitors. Increases bargaining power in
negotiating price and conditions (e.g. who is liable if vaccine is faulty)
COVAX: COVAX is co-led by vaccine alliance – GAVI, the Coalition for Epidemic
Preparedness Innovations and the World Health Organisation (WHO). As of now, COVAX
has 190 participating economies.. The United States has yet to join.
, COVAX works by collectively pulling donations from rich developed countries,
philanthropists – like the Bill and Melinda Gates Foundation – and private donors
together. These pooled funds are used to fund the research, development and
manufacture of successful vaccine candidates.
Case Study: 1913 Land Act
Setting Context
The Natives' Land Act, eventually passed in 1913, was designed to entrench white
power and property rights in the countryside — as well as to solve the "native problem" of
African peasant farmers working for themselves and denying their labour power to white
employers.
Brought the Transvaal (where a prior court ruling had allowed Africans to purchase
land) into the same ambit as that of Free State (where ownership was not allowed).
Seems that land ownership was still allowed in Cape (and Natal?), but these were
subsequently constrained by later legislation.
The Land Act became a critical edifice in the construction of a racially and spatially
divided South Africa. Subsequent Acts such as the Urban Areas Act (1923), Natives and Land
Trust Act (1936) and the Group Areas Act (1950) reinforced the land dispossession and
segregation in South Africa. https://www.sahistory.org.za/article/natives-land-act-1913
Not focusing on why it was implemented
Some key features
, a. Restricted ownership to 7% of SA Land (increased to 13% in 1936 Native Trust and
Land Act)
b. Prevented land rental
c. Prevented sharecropping
d. Aimed at developing a labour market
e. Facilitated a co-ordinated approach by farmers, providing them with the legislative
power to evict ‘squatters’ from the land.
1. (1) From and after the commencement of this Act, land outside the scheduled native
areas shall, …., be subjected to the following provisions, that is to say: —
Except with the approval of the Governor-General —
(a) a native shall not enter into any agreement or transaction
for the purchase, hire, or other acquisition from a person
other than a native, of any such land or of any right thereto,
interest therein, or servitude thereover; and
(http://www.gutenberg.org/cache/epub/1452/pg1452-images.html)
5. (1) …. any agreement or transaction which is in contravention of this Act or any regulation
made thereunder shall be guilty of an offence and liable on conviction to a fine not
exceeding one hundred pounds or, in default of payment, to imprisonment with or without
hard labour for a period not exceeding six months….
A person shall be deemed for the purposes of this Act to hire land if, in consideration of his
being permitted to occupy that land or any portion thereof —
(a) he pays or promises to pay to any person a rent in money; or
(b) he renders or promises to render to any person a share of the produce of that land, or
any valuable consideration of any kind whatever other than his own labour or services or
the labour or services of his family.
Defined ownership and rights regarding use of land along racial lines (not first – See Glen
Gray Act). Set foundation for subsequent Apartheid legislation.
Restricted ownership
And restricted sharecropping (splitting the surplus) and rent-tenure (rental but farmer
brings own cattle). Only allowed labour tenure and wage labour permitted).
1913 Land Act
“Awaking on Friday morning, June 20, 1913, the South African Native found himself, not
actually a slave, but a pariah in the land of his birth”
[Solomon Plaatje, 1916, Native Life in South Africa]
Born 1878 in the lands of the Tswana-speaking people, south of Mafeking
Joined post office in Kimberley, then served as magistrate’s interpreter in Mafikeng. After
Boer war became editor of Tswana newspapers in Mafikeng and then Kimberley.
, He was the first secretary-general of the "South African Native National Congress", founded
in 1912 (which renamed itself as the African National Congress or ANC ten years later).
Book was written as part of his mobilization campaign in England to persuade the British
crown to overturn the legislation.
The Natives' Land Act, eventually passed in 1913, was designed to entrench white power
and property rights in the countryside — as well as to solve the "native problem" of African
peasant farmers working for themselves and denying their labour power to white
employers.
Turned from politics and dedicated his life to literature.
“The Mote and the Beam: an Epic on Sex-Relationship 'twixt Black and White in British South
Africa” – book written to fund lecture tour of US in 1921.
Mhudi (An Epic of South African Native Life a Hundred Years Ago)“ about the history of his
people and family
Regarded as a South African literary pioneer
The main battle ground for the implementation of the new legislation was the Orange Free
State. White farmers took the cue from the Land Act to begin expelling black peasants from
their land as "squatters", while the police began to rigorously enforce the pass-laws which
registered the employment of Africans and prescribed their residence and movement rights.
Sol Plaatje
“The Baas had exacted from him the services of himself, his wife and his oxen, for wages of
30s. a month, whereas Kgobadi had been making over 100 Pounds a year, besides retaining
the services of his wife and of his cattle for himself.
When he refused the extortionate terms the Baas retaliated with a Dutch note, dated the
30th day of June, 1913, which ordered him to "betake himself from the farm of the
undersigned, by sunset of the same day, failing which his stock would be seized and
impounded, and himself handed over to the authorities for trespassing on the farm.“ (pg 69)
Talks about how the law altered: (a) Opportunities to own land, (b) rent and farm land using
own capital, both of which reduced the bargaining power of African’s in the exchange over
the surplus of agricultural land.
Major Legislative and Policy Developments relating to land in SA: 1890-1991
a) Glen Grey Act of 1894 restricted African’s access to land.
b) 1913 Natives Land Act: Most Africans were restricted to “reserves” constituting 7%
of the country’s land.
c) 1936 Native Trust and Land Act: Increased designated land to 13%, but introduced
stricter controls on Africans living on white-owned farms.
d) 1937 Natives Law Amendment Act: prohibited Africans from acquiring land from
non-Africans except with Governor-General’s consent.
e) 1950 Group Areas Act providing for racial segregation in urban residential areas
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