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

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  • Johan Fourie

    (Department of Economics, University of Stellenbosch)

  • Dieter von Fintel

    (Department of Economikcs, University of Stellenbosch)

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 23/2010, Stellenbosch University, Department of Economics.
  • Handle: RePEc:sza:wpaper:wpapers122
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    References listed on IDEAS

    as
    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," Economic History of Developing Regions, Taylor & Francis Journals, vol. 27(1), pages 125-149.
    2. Lembke B., 1918. "√ a. p," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 111(1), pages 709-712, February.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The past is the future we fear: notes from 1827
      by Johan Fourie in Johan Fourie's Blog on 2014-04-03 18:00:56

    Citations

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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. Stefania Galli & Klas Rönnbäck, 2021. "Land distribution and inequality in a black settler colony: the case of Sierra Leone, 1792–1831," Economic History Review, Economic History Society, vol. 74(1), pages 115-137, February.
    5. Ekama, Kate & Fourie, Johan & Heese, Hans & Martin, Lisa-Cheree, 2021. "When Cape slavery ended: Introducing a new slave emancipation dataset," Explorations in Economic History, Elsevier, vol. 81(C).
    6. Dieter von Fintel & Sophia Du Plessis & Ada Jansen, 2013. "The Wealth Of Cape Colony Widows: Inheritance Laws And Investment Responses Following Male Death In The 17th And 18th Centuries," Economic History of Developing Regions, Taylor & Francis Journals, vol. 28(1), pages 87-108, June.
    7. Galli, Stefania & Theodoridis, Dimitrios & Rönnbäck, Klas, 2022. "Economic inequality in Latin America and Africa, 1650 to 1950: can a comparison of historical trajectories help to understand underdevelopment?," LSE Research Online Documents on Economics 113838, London School of Economics and Political Science, LSE Library.
    8. 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.
    9. 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.
    10. 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.
    11. Links, Calumet & Green, Erik & Fourie, Johan, 2018. "Was Slavery a Flexible Form of Labour? Division of Labour and Location Specific Skills on the Eastern Cape Frontier," African Economic History Working Paper 42/2018, African Economic History Network.
    12. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," Economic History Working Papers 107491, London School of Economics and Political Science, Department of Economic History.
    13. Martins, Igor, 2019. "An Act for the Abolition of the Slave Trade: The Effects of an Import Ban on Cape Colony Slaveholders," African Economic History Working Paper 43/2019, African Economic History Network.
    14. 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.
    15. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," LSE Research Online Documents on Economics 107491, London School of Economics and Political Science, LSE Library.
    16. 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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    More about this item

    Keywords

    South Africa; VOC; Gini; wealth; comparative; Kuznets; Williamson;
    All these keywords.

    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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