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This article was downloaded by: [University of Toronto Libraries] On: 20 December 2014, At: 06:08 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Critique: Journal of Socialist Theory Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rcso20 The world economy, imperialism, colonialism and racial discrimination Published online: 08 Nov 2007. To cite this article: (1996) The world economy, imperialism, colonialism and racial discrimination, Critique: Journal of Socialist Theory, 24:1, 72-82, DOI: 10.1080/03017609608413402 To link to this article: http://dx.doi.org/10.1080/03017609608413402 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http:// www.tandfonline.com/page/terms-and-conditions

The world economy, imperialism, colonialism and racial discrimination

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This article was downloaded by: [University of Toronto Libraries]On: 20 December 2014, At: 06:08Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House,37-41 Mortimer Street, London W1T 3JH, UK

Critique: Journal of Socialist TheoryPublication details, including instructions for authors and subscription information:http://www.tandfonline.com/loi/rcso20

The world economy, imperialism, colonialism andracial discriminationPublished online: 08 Nov 2007.

To cite this article: (1996) The world economy, imperialism, colonialism and racial discrimination, Critique: Journal ofSocialist Theory, 24:1, 72-82, DOI: 10.1080/03017609608413402

To link to this article: http://dx.doi.org/10.1080/03017609608413402

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) containedin the publications on our platform. However, Taylor & Francis, our agents, and our licensors make norepresentations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of theContent. Any opinions and views expressed in this publication are the opinions and views of the authors, andare not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon andshould be independently verified with primary sources of information. Taylor and Francis shall not be liable forany losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoeveror howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use ofthe Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematicreproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in anyform to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

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8The World Economy, Imperialism,Colonialism and RacialDiscrimination

The key questions In South Africa have three dimensions. There is,firstly, the inter-relation between the class and the colonial bond,secondly, the connection between colonialism and racism and thirdly,the relationship between the South African socio-economic variationof the capitalist system and the evolution of the world's politicaleconomy. These three aspects are only detailed forms of the inter-relation of the movement of the law of value and the class struggle.The capitalist/worker relation given by the process of extraction ofsurplus value is constantly modified in its working by the nature of theclass struggle. The law of value itself has its own movement and afterreaching its mature form must necessarily begin a process of decline,epitomized in the evolution of modern finance capital. The decliningform of value, finance capital, in turn, inter-relates and reacts with theclass relation. South Africa has evolved a peculiar form of socialrelation precisely in the epoch of finance capital.

The crucial feature of the epoch of finance capital in this regard hasbeen the need to contradict the essence of capitalism by deliberatelyaccepting the division of labour such that abstract labour is broken upinto two or more sections. By so doing capitalism has becomenoticeably less efficient, less profitable and more political. SouthAfrica, from this viewpoint, is merely one example, an extremeexample, of a feature of the epoch.

Jack Simons has drawn attention to the problems, and to theconnection between racialism and capitalism. In particular, he drawsattention to the importance of the British aristocracy of labour. Whathe failed to do, and for this he cannot be blamed, given the times andhis environment, is solve the puzzle of the relation betweencolonialism/racialism and capitalism. This is not an historical questionbut one of political economy. His solution is simply to state that thewhites acted as a cohesive group to protect their interests, withincapitalism. There is thus a feudalistic structure imposed on capitalism.What is not explained is the reason why the whites were successful, in

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political economic terms and not in historical terms. Why was thecapitalist class of the United Kingdom prepared to make such aconcession?

They were prepared to lose profits for the sake of apparent stability,even before the epoch making 1922 strike. This is not explicable onlyin terms of the internal relations of South Africa. Nor is it explicablein terms of the colonial bond. On the contrary, from the point of viewof the British capitalist class the development of a colonial middleclass, aristocracy of labour, or internal bourgeoisie constitutednuisances they could have done without.

There is an argument which runs as follows. The British ruling classwere extracting the money commodity, gold, from a part of theempire, which enabled the United Kingdom to maintain its dominantinternational financial role at a time when its industrial position wasalready greatly weakened. The lower rate of profit occasioned by theconcessions in South Africa was, therefore, offset by the globaladvantages presented by the control over the money commodityitself. In other words, it was the nature of finance capital, which wasless interested in industry and more in making money out of whateveractivities, that accepted the racialism.

Yet it was not only gold that was extracted from the mines of SouthAfrica and the Boer War was a costly enterprise politically andfinancially, which had to be justified. Nor can it be understood assimply a blunder on the part of the government of the Empire, orsimply an attempt to impose order. Whatever the subjectivemotivations of the bourgeoisie, led by Rhodes, and the understandingof the Generals, there was a logic to the events. In a period whencapital was being challenged in its heartlands, as Rhodes understood,and the British capitalist class was declining, an alternative source ofprofits and stability was required. Finance was invested in areas wherereturns were quick, and high, with easy repatriation to the UnitedKingdom. This meant for the colonies that they were to serve as areceptacle for capital only in relation to the extractive industries,agriculture/plantations or the infrastructure for that purpose. Thework of Michael Barrett Brown long ago showed that this was the casefor the colonies as opposed to the 'developed' countries, whereinvestment, from the UK etc. also went into industry.

The Colonial Relationship

South Africa was a classical colony in being agricultural, having alargely extractive industry (including gold and diamonds), an unskilledworkforce and large peasantry. It was, however, not so typical inhaving settlers from Europe, who were both the peasants and theoverseers over other peasants of the economy. The problem is that

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these settlers were often as little educated, with as little wealth as theindigenous inhabitants and owed as little allegiance to the colonialoverlord as those African peasants. The actual size of theDutch/French/English settler population, before 1870, is greatlyexaggerated in South African government histories but even thesettlers after 1870, and after 1900, were not possessed of wealth, or ofconsiderable education. Nor were they, on the other hand, simplyadventurers, intent on exploiting the black majority. They were largelypart of the export of labour from the continent of Europe, which wasalso going to the Americas.

It has also to be remembered that the white mining/industriallabour of South Africa did not initially supervise the Africanpopulation, although the farmers did employ black labour. Whatthen is colonial in the racialism of South Africa? To say that a blackregime would not have accepted so many whites may or may not betrue, but is irrelevant. It is not the presence of persons of differentcolour that is crucial, but the relationship, which uses colour/language/culture as a means of superexploiting one section of thesociety. That relationship does not have to be colonial at all. TheIrish have suffered from that relation in Britain, as Marx himselfremarks. What then is the specifically colonial aspect?

The colonial relationship between a metropolitan country and asubordinate country or national group is founded on extraction of thesurplus product from the subject grouping as a whole. It involves theextraction of surplus value, in the case of capitalism, from the nationalgrouping as a whole. The meaning to be attached to this latterstatement is that the source of the surplus value is the worker orpeasant but the normal internal rate of surplus value is loweredthrough transfer to another country. As a result, the local capitalistclass has a lower rate of profit than would otherwise be the case, oralternatively is so reduced in numbers and command over capitalthat it constitutes little more than local agents for an externalbourgeoisie. In other words, the existence of a stunted localbourgeoisie is an indication of transfer of capital to the bourgeoisie ofthe metropolitan country. In this sense, of a transfer of capital to themetropolitan countries, particularly the UK, clearly South Africa is stilla colony but one with a powerful internal bourgeoisie.

There is a particular problem when it comes to the wages of theworkers in the colonies. They receive lower wages than theirmetropolitan counterparts, permitting a higher rate of surplus valueeven if the local agents may receive only a small proportion of thatsurplus value. On the other hand, the value of their labour power isnationally determined, not internationally, so that they may artuallynot be superexploited, though the rate of extraction of surplus valuemay be very high. Of course, often enough the workers were a small

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minority of the population, who had to be relatively better paid thanthe peasants to ensure their loyalty. In the non-industrial stage ofextraction of surplus value the metropolitan power had no interest inpreserving the lives of the workers who were then often paid belowvalue.

However, the existence of a colony implies more than just transferof surplus value. Historically, it has always meant a transfer of surplusvalue by force. It is in the end an exaction of tribute. At the presenttime, many third world countries transfer part of their surplus value tothe United States but it is difficult to call such examples as- Brazil orIndia simply colonies. They do have a local bourgeoisie of muchgreater size than before independence and they do Impose restrictionson the export of capital, profits and local currency abroad. The termneo-colony does not solve the problem either, because there is a realdifference between say Tanzania or Mozambique before independenceand after, masked by the use of the word colony in however attenuateda form. The conclusion to be reached is that the political aspect of theinternational state, the Empire, is crucial. The fact that workers are stillexploited in the independent countries, that surplus value is stilltransferred to the metropolitan countries and that these countrieshave only a nominal independence is all true.

They are dependent countries but their governments are locallystaffed, their bureaucracies are local, they have in some cases a localcapitalist class and the population usually acquires health andeducation facilities otherwise not provided. Their standard of livingmay go down, millions may be killed by their own governments andthere is seldom any form of democratic control from below.Nonetheless, it is clear, however unfortunate the country, it is not thesame as before independence. Socialists may recoil in horror at allthese countries, but that does not make them the same as they werewhen they were straightforward colonies.

The view that it is impossible to achieve socialism in one countryhas been amply vindicated in the almost total failure of all the formercolonies which call themselves socialist. They have becomeincreasingly helpless playthings of the world division of labour andhence have become dependencies of international financial capital. Itis also noteworthy that these countries have all failed to develop to thepoint of equality with any developed country. The IMF has had to useeconomic sanctions, which it is increasingly unable to enforce, sincethe metropolitan powers cannot now use direct force. The localbourgeoisies, elites and middle classes have felt compelled, in turn, toreject the demands of the bankers, and the finance capitalestablishment is now afraid of the consequences of a sustained default.

This conclusion does not mean that the extraction of surplus valuefrom South Africa by the United Kingdom is of no importance to the

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76 The Politics of Race

history of South Africa. It signifies that such a process is differentfrom the traditional colonial process. The provision of capital for theUnited Kingdom by South Africa during the Second World War waspart of the Imperial system, which involved, inter alia, blockingaccounts in the sterling area, but it was undone by the Nationalistgovernment on coming to power. The point that has to be taken intoaccount is that South Africa was both a colony and not a colony andthat the racial discrimination which has evolved did so against thewishes and needs of the colonial masters. There should be noconfusion between the racialism of the colonial representatives,reflecting a global elitism, and that of local settlers whose racialism wasnormally total precisely because they were the direct extractors ofthat surplus value, rather than an overlord receiving part of the locallyproduced surplus value.

The difference between a superexploited black man in the US, or asuperexploited Spaniard in Switzerland and a superexploited colonialworker in pre-independence Nigeria is instructive. Although thesuperexploltation in the developed countries is assisted by the state itdoes not actually depend on direct force for its maintenance. Thefetishism of the commodity plays the crucial role. The worker worksbecause he has to feed his family and can only do so in this particularway. The skill and capital required to alter his position are not availableto him. He sells his labour power for the only price that is available.That it is below value cannot be altered. It cannot be alteredcollectively because of the atomized nature of the work force.

The colonial worker, on the other hand, also has to sell his labourpower or starve, but normally he has had the alternative of staying apeasant, or acting politically against the barriers preventing himreceiving higher wages. Governments, like the British in South Africa,have forced peasants off the land through compulsory taxation andmaintained control over workers in the towns with the army or police.India, too, was an occupied country until independence. Economicmeasures such as a poll tax have no meaning unless backed by force.Such a poll tax is very different from local income tax where there areeconomic sanctions.

When we turn, however, to the case of a 'settler economy', such ascontemporary South Africa, the relationship is closer to that of theBlack in the USA, Spaniard in Switzerland, Moroccan in France, Turkin Germany. In both cases there are superexploited and privilegedworkers in situ but in South Africa the majority are the superexploitedas opposed to the metropolitan cases cited above, where the privilegedworkers are the majority. It has also to be noted that the majority ofworkers, in South Africa, are indeed superexploited, paid below thevalue of their labour power, and not just receiving wages less than theircounterparts in Western Europe, as has been true of other countries in

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Africa. Paradoxically in the latter case, the colonial case, the wages ofworkers in those countries could actually be less than the workers inSouth Africa. The reason for that paradox is that the entire workforcein South Africa has been brought into the modern industrial economyand consequently has to be paid accordingly.

The maintenance of control over the majority requires a strongstate, but it only needs the strong state because of the concession tothe minority of privileges over the majority. It is not the colonialcontrol but the demand for a share of the surplus value that hasforced the metropolitan and later local bourgeoisie to introduce andmaintain the racial discrimination. It is here that we see the realdifference between South Africa, a colony and the metropolitaninstances. In the case of South Africa, the wage differences have beenso great as to make all talk of whites also being workers, mental ormanual, open to question. Workers who received between three andtwenty times the wage of a black worker, usually when acting assupervisors, are not capitalists but then they are not simply workerseither. South Africa, therefore, constitutes a particular blend of acolonial past, with a modern capitalist economy founded on racialdiscrimination.

The argument maybe summed up as follows. Racial discriminationand apartheid are not simply features of a colony. If that were so, thenthe same argument applies to blacks and the discrimination againstthem in the US. The colonial masters prefer, by and large, to build upa local elite or bourgeoisie, which has some degree of popular support.In the twentieth century, a colony in which a racial minority ruled wasclearly doomed to revolution or chaos. On the other hand, in Kenya,Rhodesia etc. the United Kingdom did use the settlers as economic andpolitical rulers but they did not shut out the potential black middleclass. Nor did they have the same problem to the same degree ofwhite workers. The whites of Kenya and Rhodesia have done very wellIn the independent states of Kenya and Zimbabwe. For the majority ofwhites in South Africa their only future under black rule must involvea considerably worse standard of living. The fundamental question isthus of the industrialization of South Africa and the break up ofabstract labour to the point where there are actually two separateabstract labour components of the workforce, with one, the whites,receiving surplus value from the other.

The colonial question is of historical significance only. That thewhites came from outside of Africa is irrelevant to any internationalistor humanist. That some of the whites came with particular skills andthat the blacks were not quickly given those skills is of crucialimportance but not immediately traceable to racialism. The blackswere peasants while the imported skilled workers were accustomed todiscipline in an industrial environment. The blacks were a conquered

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people who would clearly revolt, and did so, when possible. There canbe little doubt that the white management had a racialist attitude butnot one that overrode the question of profits, amply proven by theirreplacement of expensive white labour with cheaper black labourwhen the time came. South African history can only be understood interms of its colonial formation, but the imperial expansion of Europealso involved the extermination of large numbers of indigenousInhabitants as in Canada, Australia, the United States and elsewhere.This racialism is different from racial discrimination against a sectionof the working class. The former is colonialism and was also employedin South Africa, but the latter is a modern form of control over theworking class.

The role of gold was as a source of profits of an easily realizablecommodity but it was not the only source of profits. Gold has alsobeen countercyclical and helped to stabilize the class which held thegold mines. South Africa cannot, however, be explained only throughthe peculiarities of the money commodity.

Imperialism and South Africa

South Africa exhibits the charaaeristics of both a modern dependencyand those of an independent metropolitan country. It transfers surplusvalue to the metropolitan country but on the other hand it limits thattransfer in time, amount and category. It does not have the threat orpresence of foreign troops. It no longer has imperial bases on itsterritory. It has considerable investments in other countries, mostparticularly the United Kingdom, the United States, Canada, Australia,Brazil and elsewhere. It maintains control or has a dominant economicposition in Southern Africa. The jargon of the Soviet style theorists isone of a sub-imperialist power, whatever that may mean.

It has to be noted that the word imperialism as used by Leninreferred to the export of capital from the imperialist powers of Europe.In return, the metropolitan powers received cheap imports, providingthe necessary profits. In fact history turned the original form on itshead in that the empire exported its own surplus value and so capitalto the metropolitan countries, allowing the United Kingdom tobecome an increasingly rentier, or finance capitalist country. Thecapital was not simply re-exported or left in the exploited country butemployed by the British imperial masters in the home country tomaintain an aristocracy of labour, ignore the needs of industry andimport industrial goods from other countries, and live a good, gentleand aristocratic life. The rentier/finance capitalist position wasmaintained by re-investing wherever the profit was highest.

Thus the characteristic of a dependent territory, as discussed in theprevious section, has to be that of transfer of surplus value to the

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bourgeoisie of another country. Such transfer may take place throughinterest, dividends, profit, rent, transfer pricing or some other method.It may be processed through finance capital or through industrialcapital or for that matter through the state. (There are dependentterritories, which have no economic function but service the politicalneeds of the superordinate bourgeoisie, such as strategically locatedislands. They do not involve any change in the definition as they onlyserve this function in order to secure the transfer of the surplus valueof other territories.) Such a dependent territory is not necessarily in theposition of a colony, controlled by the state of a another country inorder to secure the necessary transfer of funds, and it has aconsiderable degree of latitude, contingent on the relationship of therespective bourgeoisies.

South Africa is definitively a dependent territory on this definition.It is not, of course, necessary to use this word as it has been employedby the dependency school. It has also to be re-affirmed that capital iseffectively not being transferred or exported to the dependent territorybut on the contrary it is the latter territory that is losing capital to themetropolitan country. It has further to be observed that the control isnot exercised by multinational companies or through possession oftechnological superiority in themselves. The fundamental relation isthrough a transfer of surplus value to the metropolitan country invirtue of the control of capital in that dependent country, control overthe international market in the commodities sold by that country orcontrol over the Imports of that country. Methods of exercising thiscontrol are various and need not be discussed here.

Turning to South Africa, the controls exist through ownership ofcapital internally, through the international market in South Africanexports and through the supply of machinery and other imports tothat country. On examination, however, it appears that since themain export of South Africa is gold, no real control exists over thatcommodity since it is the money commodity itself, and it Is impossibleto do much about restricting its import or influencing its price simplyto affect South Africa. Furthermore, diamonds are in fact controlled bythe diamond syndicate, which is entirely in the hands of the SouthAfrican firm, De Beers. Thus it is not through control over exportprices that control is exercised, though the pricing of imports stillallows for transfer of value, largely to Europe and America. Its extentis greatly limited by the relatively industrialized nature of the country,permitting it to substitute its own manufacture or bargain withdifferent firms in different countries. The fundamental nature of thatdependence then lies in its provision of invisibles, largely to theUnited Kingdom. It is not of course really a question of the balance ofpayments, so much as the proportion of profits provided for UK

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companies. That has been reduced of late by the decline in profitabilityof companies in South Africa.

The feature then of South Africa is that it transfers surplus value toa limited degree to metropolitan powers and that transfer hashistorically involved control over imports, exports and internal profits,but that has gradually diminished. It has been declining for manyyears to the point where the real connection has become morecomplex. In other words, it is surely possible for the South Africanbourgeoisie to invest sufficient internally in order to cause a decline inthe total value exported by a substantial sum. Anglo-American hasenormous investments in the major metropolitan countries and couldoffset its foreign investments against metropolitan holdings in SouthAfrica. It does not do so because it wants to diversify outside itsorigins, most particularly because of the risk of possible change in thatcountry. Hence the dependency began in the colonial status of SouthAfrica and moved away from that situation to a point wherediversification took the form of investment externally or simplyexporting capital by the South African owners.

It would then appear that the real reason for this dependency is theinsecurity-of capital. As a result, it is not able to form a true indigenouscapital and has to form a strong alliance with international capital.

The Eccentric Case of the 'Internal Colony'Argument

The Communist Party of South Africa put forward, in the late 1950s,the hitherto unknown theory of internal colonialism and hence thatthe blacks constituted such an internal colony.73 The whites were thecolonial power controlling the blacks. It is true that, on the definitionabove, which was not the definition of the CP, the whites extractsurplus value from the blacks. It Is also true that an apparatus of forceis required to maintain the blacks as suppliers of labour power.

Nonetheless, the same statement could be made of any working classin revolt against their ruling class. The feature of a colony is that extrasurplus value is extracted from the working class/peasants, in effect arent, via the local agents, whether landlords, an internal bourgeoisie orsimply the superordinate state apparatus. This super surplus value is notthen distributed to an aristocracy of labour, leaving the bourgeoisie ofthe Imperial power no better off, but rather is absorbed into the generalrate of profit in the metropolitan power, making it higher than it wouldhave been in the absence of a colony. If the bourgeoisie chooses to buyoff a section of its metropolitan workers this action is performed muchas a master will give some leftovers to his dogs. He definitely does notgive the dogs the meat itself.

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The argument above has gone to show that there is no evidence thatthe superexploitation of the blacks actually does go to raise the generalrate of profit, compared to what it may have been in the absence ofracial discrimination. The very high salaries of the whites and theoverall costs of apartheid offset the extra surplus value so extractedfrom the blacks.7*

It has also to be added that the categorization of what can moreeasily be termed a case of superexploitation of one section of theworking class to the benefit of another (and of a petty bourgeoisie) inone country has no similar example in colonial history. If, forexample, the Ukraine is called an internal colony of the USSR, as hasbeen argued, it is then stated that extra surplus product is beingsiphoned off from Ukrainian workers which then goes to the Sovietelite for distribution at their pleasure, whether on arms, their luxuries,or on Moscow factories. Whether this argument is true will depend onwhether the Ukrainian workers are superexploited or not. If they arenot, but the surplus product still flows out of the Ukraine, then someother word than colony may be appropriate to describe the inferiorposition of a section of the USSR. No one tries to argue that all Russiansare better off because of the Ukrainian situation. On the contrary,many Russians are actually worse off than Ukrainians, although sinceChernobyl that is open to question.

It may well be objected that the argument has been exclusivelyeconomic and that colonial subjects have been oppressed sociallyand culturally as well. This is true though it has to be noted that theapartheid regime would like nothing more than to ensure that blackshad knowledge only of their own languages. The economic power restswith a class with an alien language and culture from most though notall the exploited. The fact that some (the so-called colouredpopulation) have the same culture as the Afrikaners is some indicationof the weakness of the argument. Britain was conquered by the Frenchspeaking knights of William the Conqueror in 1066, and Britain is notregarded as having been divided into an internal colony and a rulingclass.

Can a country consist of an internal colony and a separate rulingclass with no other working class? Classes require their opposites.The South African capitalist class must have a South African workingclass and vice versa. It is not absurd to extend a reality of all rulingclasses, that they have their own internal language and culture, to theextreme of South Africa. The language and culture of the capitalist classis always dominant, sweeping away the everyday language of theordinary worker, whether, to take the example of the United Kingdom,he be Scottish, Irish, Welsh or Cornish, unless there is a determinedresistance movement. In Switzerland, up to half of the real working

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class of that country comes from other countries and speaks otherlanguages than the dominant one of the canton.

Nonetheless, only a dogmatist would try to impose the simplecapitalist/worker division on South Africa. I have not tried to do so,arguing in terms of a capitalism regulated by racial discrimination.There is also a real national question.

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