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As the Dutch
and later English increasingly established permanent settlements in the country, relations with indigenous
people changed dramatically. Of utmost importance were a series of discoveries during the mid and late
nineteenth centuries of precious metals—especially gold and diamonds—in the country’s interior. Large
industrial conglomerates sought to utilize the indigenous African population as a cheap labor source to
maximize profits in these labor intensive mining industries.
While the interests of the South African state (dominated by Afrikaners) and the (English) mining
conglomerates never entirely coincided, the ability of industrial elites to influence state policies during the
early and middle twentieth century resulted in the creation of the Bantustan system, formalized in the
8
1913 Natives Land Act and 1951 Bantu Authorities Act (Magubane 1979). The Bantustans both created a
stable labor pool from which industrial capital could draw and, by preserving a pre-capitalist system of
subsistence agriculture, allowed employers to pay a below-subsistence level wage (Legassick and Wolpe
1977; Burawoy 1976). Three important characteristics of this system must be emphasized. First,
connected with the Bantustans was an elaborate legal mechanism—known as Segregation—for
controlling black movement throughout the country and especially between the rural Bantustans and
urban industrial centers (of which the infamous Pass Laws are the most extreme example). Second, the
Bantustan system functioned economically to perpetuate a particular stage of capitalist production. And
third they were associated with a vast ideological apparatus which legitimated exploitation through
reference to the genetic inferiority of black Africans (Wolpe 1972).

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