and eighteenth centuries" (1997, p. xii). Minter says that from its inception, "wool from the Cape and sugar produced by Indian labor in Natal laid the basis for an export economy" (1986, p. 5). However, before diamonds were discovered at Kimberley in 1867 and gold in the Winvatersrand near Johannesburg a decade later, the economy was largely self-sufficient, characterized by the herding and farming activities of Boer or Afrikaner farmers.
Foreign investment capital, primarily portfolio capital, flowed into South Africa in the last quarter of the 19th century to develop the diamond fields and gold mines. By the turn of the century more foreign capital was invested in South Africa than in all the rest of Africa combined. The South African economy was dominated by mineral monopolies based in London. According to Minter, "capital owned by foreign investors . . . has consistently been an important factor in the southern African mining industry, but investors permanently resident in Southern Africa have also held substantial ownership and control" (1986, p. 15). The great British imperialist, Cecil Rhodes, controlled most of the diamond production through his De Beers Consolidated Mines. A leading local entrepreneur was the Oppenheimer family which came to dominate the production of gold and many other minerals through their Anglo-American Corporation.
The mineral discoveries led to a struggle for control of South Africa between Britain and local Afrikaner interests which finally resulted in the Boer War (1899-1903) which was won by the British after a bitter struggle. British investors and financiers played a key role in influencing British policy. Thompson says that "as the mineral wealth of the region became revealed, some British politicians and business people came to regard its control as a matter of national importance" (1990, p. 111). Rhodes said that Britain needed South Africa as a source of gold and as an outlet for Briti...