SPECIAL FOCUS
in various forms, which prolonged the struggles to almost never-ending squabbles spilling over generations. Despite the outwardly similar characteristics of the struggle towards independence and equality, South Africa, renamed the Republic of South Africa in 1961, had (unlike India, or worse, Zimbabwe) long gained independence from the United Kingdom following the Statute of Westminster in 1931. It was no longer under the dominion status entered into in the year 1910 by the South Africa Act of the British Parliament. However, South Africa’s problems were not merely with the passage towards independence from a foreign ruler, but of the racial segregation initiated by the minority (20%) white rulers in the form of the Natives’ Location Act, the Pass Laws and the Natives’ Land Act that continued to jeopardize the society and economy of South Africa for the next six decades. It was not until 1993 that the racial segregation was completely abolished from the country and the first universal election was held in 1994 with transfer of power and policies and the government in all nine provinces containing the historic cities of Cape Town, Durban, Pretoria, Port Elizabeth and Johannesburg also as the major centers of economic activities. This was principally an outcome of the determination and persistence of Madiba Rolihlahla Mandela and his comrades, such as, Oliver Tambo. The transition with successful negotiation between Nelson Mandela and F. W. de Clarke happened shortly after Nelson Mandela was released from the Robben Island after 27 years of life imprisonment following the well known Rivonia Trial of 1962, in which he and seven associates were implicated for sabotage, violent conspiracy and treason. Mandela had by then stopped believing in non-violence, simply because the repeated massacres of unarmed, peaceful black protestors by the white government had forced him
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THE MANAGEMENT ACCOUNTANT
A view of Cape Town now where in the 1970s in District Six, a former inner-city residential area of the city, over 60,000 of its inhabitants were forcibly removed by the apartheid regime and the area made whites-only
to redress ideals in the form of seeking guerilla training in Algeria and staging sabotages. That he was not the one who would seek retaliation after the African National Congress assumed absolute power, was ruled out with his clear message on co-existence that stirred the world even during the Rivonia Trial of 1962 (the epilogue). This article argues that the white governance in South Africa clearly underestimated the social and economic costs of racial segregation despite already celebrated pieces on the economics of discrimination, of which the color or ethnicity-based discrimination is a major component. The reinstating of non-discriminatory practices in South Africa via the transfer of governance to the African National Congress has unambiguously conferred economic benefits in a relatively short time compared to the long regime of segregation, such that, South Africa has turned itself into a major player in the global economy alongside, Brazil, China, India and Russia. The reason behind such turnaround should be clear when one looks carefully into the losses that the economics of discrimination generates for itself. When Madiba passed away on December 5, 2013, he finally left behind a country that he cherished for all through his life. The accomplishments of Mr. Mandela or of his American contemporary Dr. Martin Luther King Jr. rising against the vices of discrimination along racial lines or any other form are the strongest testimonials of the bad economic and societal understanding that often shrouds the minds of the powerful. The economics of Apartheid, as much as the sociology and politics of it, are mere accounts of global losses al-
JANUARY 2014
though admittedly it makes only a few practitioners of it rich, unconditionally. This is inherent in the definition of economic discrimination. An enormous literature, starting with Gary Becker’s 1957 book “The Economics of Discrimination”, explores the economics of discrimination. The treatment of discrimination in economics can be divided into two classes: competitive and collective. Competitive analysis of discrimination studies individual maximizing behavior that may factor in discrimination in several fronts, including, access to resources. In collective models, groups act collectively against each other. Almost all economic accounts have focused on analysis of competitive behavior, which can further be divided
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