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Transvaal

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Transvaal was one of two independent Afrikaner states founded in the South African interior during the nineteenth century. Its resistance to British expansion, intensified by the discovery of gold, ended in the Boer Wars and the incorporation of the Afrikaner states into the Union of South Africa in 1910. Its history connects inland settlement and mineral extraction to the racialized political order that excluded most Black South Africans from power.

Formation in the Interior

After Britain took Cape Town from the Dutch during the Napoleonic Wars, European settlement expanded inland, contributing to a long series of Xhosa wars. In 1835, Afrikaners—Europeans of Dutch descent—began the Great Trek, a mass migration away from British control of the coast and Cape Town area. They established two independent states in the interior: the Orange Free State and Transvaal.

Mineral Wealth and British Expansion

The discovery of extensive diamond deposits at Kimberley in 1867 and rich gold mines in Johannesburg in 1886 transformed the stakes of control over the interior. The mineral wealth convinced Britain to extend its authority across South Africa. Transvaal and the Orange Free State resisted, leading to the Boer Wars of 1880–1881 and 1899–1902. After an initial, unexpected defeat, Britain prevailed and merged the Afrikaner states with the Cape Province and Natal to establish the Union of South Africa in 1910.

Mining and European settlement also created demand for food and other agricultural products, opening new economic opportunities for native Africans in agriculture and trade. Those opportunities, however, developed within a political order that sharply restricted Black participation. At the Union’s founding, the former Afrikaner polities of Transvaal and the Orange Free State had explicit racial franchises that barred Black people entirely from political participation.

Political Exclusion and the Wider South African Order

The Union preserved differing electoral arrangements in its constituent territories. Natal and the Cape Colony permitted Black men to vote if they met property qualifications, which most did not; the existing arrangements there were retained in 1910. By the 1930s, Black South Africans had been explicitly disenfranchised throughout the country. White settlers dominated the police, military, and political institutions, while political power and the right to vote and hold office remained restricted to whites.

The resulting political structure underpinned extractive economic institutions. Although white South Africans had property rights and access to education, more than 80 percent of the population—Black South Africans—were marginalized from most desirable economic activities. They were prevented from making full use of their abilities in skilled work, business, entrepreneurship, engineering, and science, while white prosperity relied on extracting wealth from Black labor. Economic growth persisted while gold and diamond revenues rose, but had stopped by the 1970s.

Historical Significance

Transvaal’s trajectory shows how colonial expansion could redirect local development: inland settlement, the struggle for sovereignty, and mineral wealth culminated in a Union whose founding political arrangements preserved white power and excluded Black people. South Africa’s dual economy did not end through the automatic effects of economic development. Black protest and organization—strengthened after the Soweto uprising of 1976—ultimately brought down the apartheid state in 1994.