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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.

Suggested Citation

  • Johan Fourie & Dieter von Fintel, 2010. "A History With Evidence: Income inequality in the Dutch Cape Colony," Working Papers 184, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:184
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    References listed on IDEAS

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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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    Cited by:

    1. Guido Alfani & Federico Tadei, 2017. "Income Inequality in Colonial Africa: Building Social Tables for Pre-Independence Central African Republic, Ivory Coast, and Senegal," Working Papers 594, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    2. 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.
    3. Johan Fourie & Dieter Fintel, 2014. "Settler skills and colonial development: the Huguenot wine-makers in eighteenth-century Dutch South Africa," Economic History Review, Economic History Society, vol. 67(4), pages 932-963, November.
    4. Johan Fourie & Jan Luiten Zanden, 2013. "GDP in the Dutch Cape Colony: The National Accounts of a Slave-Based Society," South African Journal of Economics, Economic Society of South Africa, vol. 81(4), pages 467-490, December.
    5. Bokang Mpeta & Johan Fourie & Kris Inwood, 2017. "Black living standards in South Africa before democracy: New evidence from heights," Working Papers 10/2017, Stellenbosch University, Department of Economics.
    6. Sophia du Plessis & Ada Jansen & Dieter von Fintel, 2014. "Slave prices and productivity at the Cape of Good Hope from 1700 to 1725: did all settler farmers profit from the trade?," Working Papers 17/2014, Stellenbosch University, Department of Economics, revised 2014.
    7. Jörg Baten & Johan Fourie, 2015. "Numeracy of Africans, Asians, and Europeans during the early modern period: new evidence from Cape Colony court registers," Economic History Review, Economic History Society, vol. 68(2), pages 632-656, May.
    8. Johan Fourie, 2011. "Slaves as capital investment in the Dutch Cape Colony, 1652-1795," Working Papers 21/2011, Stellenbosch University, Department of Economics.

    More about this item

    JEL classification:

    • N37 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Africa; Oceania
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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