Magazine article The Spectator

The Curse of Riches

Magazine article The Spectator

The Curse of Riches

Article excerpt

DIAMONDS, GOLD AND WAR by Martin Meredith Simon & Schuster, £25, pp. 569, ISBN 9780743286183 £20 (plus £2.45 p&p) 0870 429 6655

When the second half of the 19th century began, South Africa was barely even a geographical expression, as Metternich had contemptuously called Italy. It certainly wasn't a country, but merely an ill-defined area which included two Boer republics, the Transvaal and the Orange Free State, two British colonies, the Cape and Natal, and a number of African principalities. The British had acquired the Cape from the Dutch during the Napoleonic wars not quite in a fit of absence of mind, but with little enthusiasm, and although the Cape of Good Hope itself was of great strategic importance, commanding the passage to India and the Far East, James Stephen of the Colonial Office unpresciently called the lands of the interior 'the most sterile and worthless in the whole Empire'.

Everything was changed by geology, or by its accidental interaction with human history. Just as it's a random fact of life, but full of significance for all of us, that Shiites, although only a one-in-five minority among Muslims as a whole, happen to sit on top of most of the world's oil, so a capricious Providence decided to place most of the world's diamonds and gold beneath the bush and desert south of the Tropic of Capricorn.

How this changed the whole course of South African -- and to no small extent world -- history is the enthralling story told by Martin Meredith in Diamonds, Gold and War.

First came the rush to Griqualand, where immensely rich diamond pipes were found in 1871. Diggers flooded in and created a vast patchwork of little claims. After feuding and rebellion, a few men, led by Cecil Rhodes, Alfred Beit and Barney Barnato, gradually established control of the mines, while the British ruthlessly acquired what had been a disputed territory. The diamond town was now named Kimberley, for the Colonial Secretary of the time (which is why American girls are still called, at third hand, after the Norfolk village whence the Wodehouse family took their title).

If the diamonds had lain in a debatable land, the immense gold field discovered in 1886 did not. 'The ridge of white water' -- Witwatersrand -- belonged to the Transvaal, or South African Republic, a statelet of sorts created by Dutch-speaking Boers escaping northwards from British rule. Incomers came in large numbers to the Rand and its new boom town called Johannesburg, which was soon producing an immense output of gold, and which was soon also in a state of unarmed revolt against the Transvaal.

But there was a fascinating difference between these two mining business, of which Meredith could have made more. In both cases a cartel was established, but with diametrically opposite purposes. Although Kimberley fuelled the great new fashion for engagement rings, the demand for diamonds was essentially artificial, and with such a limitless and easily mined supply the price fluctuated wildly, often plunging downwards. And so the answer for the mine owners was monopoly in the strict sense of a sellers' market, controlling production and thus keeping up the price.

By contrast, from the early 18th century until the Great War the price of gold was fixed by the gold standard. The Rand was incomparably the greatest gold field ever found in terms of quantity, but its quality was very poor, so that in order to make the field payable, as mining managers say, costs had to be controlled by means of monopsony, a buyers' market for the crucial commodity of labour, whose price could be kept down. …

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