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A History With Evidence: Income inequality in the Dutch Cape Colony

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  • Johan Fourie
  • Dieter von Fintel

Abstract

The arrival of European settlers at the Cape in 1652 marked the beginning of what would seemingly become an extremely unequal society, with ramifications into modern-day South Africa. In this paper, we measure the income inequality at three different points over the first century of Dutch rule at the Cape. What emerges from the study is a society characterised by severe inequality, with a relatively (and increasingly) poor farming population combined with pockets of wealth. The inequality is driven largely by wheat and, especially, wine production, which gave rise to an elite. Historical evidence supports our findings: Amongst others, the imposition of sumptuary laws in 1755 is closely correlated with a more segmented elite which includes both alcohol merchants and (wine) farmers. We compare these measures to those of other regions and time-periods in history. Although the exact level of inequality is determined to a large extent by our assumptions, the Cape Colony registers one of the highest Gini-coefficients in pre-industrial societies. This provides some support to verify the Engerman-Sokoloff hypothesis that initial levels of high inequality would give rise to growth-debilitating institutions, resulting in higher inequality and underdevelopment.

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Bibliographic Info

Paper provided by Economic Research Southern Africa in its series Working Papers with number 184.

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Length: 31 pages
Date of creation: 2010
Date of revision:
Handle: RePEc:rza:wpaper:184

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  1. Sophia du Plessis & Stan du Plessis, 2012. "Happy in the service of the Company: the purchasing power of VOC salaries at the Cape in the 18th century," Working Papers 01/2012, Stellenbosch University, Department of Economics.
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  1. The past is the future we fear: notes from 1827
    by Johan Fourie in Johan Fourie's Blog on 2014-04-03 13:00:56
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Cited by:
  1. Piraino, Patrizio & Muller, Sean & Cilliers, Jeanne & Fourie, Johan, 2013. "The transmission of longevity across generations: The case of the settler Cape Colony," SALDRU Working Papers 113, Southern Africa Labour and Development Research Unit, University of Cape Town.
  2. Johan Fourie, 2011. "Slaves as capital investment in the Dutch Cape Colony, 1652-1795," Working Papers 21/2011, Stellenbosch University, Department of Economics.

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