for him in the European community above the
level of certain forms of labour … For that
reason it is to no avail to him to receive a
training which has as its aim absorption in
the European community while he cannot and
will not be absorbed there.
Naturally, the type of dual economy articulated in
Verwoerd’s speech is rather different from Lewis’s dual
economy theory. In South Africa the dual economy was not
an inevitable outcome of the process of development. It
was created by the state. In South Africa there was to be no
seamless movement of poor people from the backward to
the modern sector as the economy developed. On the
contrary, the success of the modern sector relied on the
existence of the backward sector, which enabled white
employers to make huge profits by paying very low wages
to black unskilled workers. In South Africa there would not
be a process of the unskilled workers from the traditional
sector gradually becoming educated and skilled, as
Lewis’s approach envisaged. In fact, the black workers
were purposefully kept unskilled and were barred from
high-skill occupations so that skilled white workers would
not face competition and could enjoy high wages. In South
Africa black Africans were indeed “trapped” in the
traditional economy, in the Homelands. But this was not the
problem of development that growth would make good. The
Homelands were what enabled the development of the
white economy.
It should also be no surprise that the type of economic
development that white South Africa was achieving was
ultimately limited, being based on extractive institutions the
whites had built to exploit the blacks. South African whites
had property rights, they invested in education, and they
were able to extract gold and diamonds and sell them
profitably in the world market. But over 80 percent of the
South African population was marginalized and excluded
from the great majority of desirable economic activities.
Blacks could not use their talents; they could not become
skilled workers, businessmen, entrepreneurs, engineers, or
scientists. Economic institutions were extractive; whites
became rich by extracting from blacks. Indeed, white South