Manipulating the Market: Understanding Economic Sanctions, Institutional Change, and the Political Unity of White Rhodesia 0472111876, 9780472111879

Citation preview

Manipulating the Market

Manipulating the Market Understanding Economic Sanctions, Institutional Change, and the Political Unity of White Rhodesia

David M. Rowe

Ann Arbor

The University of Michigan Press

To Pam, Sarah, and Stephen

Copyright © by the University of Michigan 2001 All rights reserved Published in the United States of America by The University of Michigan Press Manufactured in the United States of America ® Printed on acid-free paper 2004 2003

2002 2001

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No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, or otherwise, without the written permission of the publisher. A CIP catalog recordfor this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Rowe, David M., 1960— Manipulating the market : understanding economic sanctions, institutional change, and the political unity of white Rhodesia / David M. Rowe. p. cm. Includes bibliographical references and index. ISBN 0-472-11187-6 (cloth : alk. paper) 1. Economic sanctions. 2. International economic relations. 3. Economic sanctions—Case studies. 4. Economic sanctions—Zimbabwe. I. Title. HF1413.5.R69 2001 337—dc21 00-010835

Contents

Preface

vii

List of Abbreviations

xi

Chapter 1. Markets, Politics, and Influence: Toward a Deeper Understanding of Economic Sanctions

1

Chapter 2. Economic Sanctions, Collective Action Dilemmas, and Institutional Change Chapter 3. Prelude to Sanctions: The Polarization of Rhodesian Politics

20 36

Chapter 4. Muzzled Dogs Don’t Bark: The Political Capture of Rhodesia’s Tobacco Industry

63

Chapter 5. Reaping the Windfall, Paying the Piper: Rhodesia’s Business Community Responds to Sanctions

96

Chapter 6. Slippery Business: The Oil Embargo of Rhodesia

133

Chapter 7. Economic Sanctions, Political Economy, and the Racial Unity of White Rhodesia

163

Notes

181

Bibliography

227

Index

235

Preface

Economic sanctions are an important instrument for managing interna­ tional conflict. Unfortunately, they are not well understood. Most studies analyze economic sanctions in the wrong way. In the rush to provide pol­ icy-relevant advice, these studies seek to infer “lessons” from past uses of sanctions and neglect the much more important task of developing rigor­ ous causal theories to explain how and why economic sanctions influence the behavior of targeted actors. This is a serious shortcoming. Sound causal theories are fundamental to sound policy advice. For policymakers to use sanctions wisely, they must be able to accurately predict the consequences of their actions. Yet it is precisely this causal knowledge that scholars have by and large failed to generate regarding economic sanctions. This book maps out a new way to study economic sanctions. I use standard economics to explain how the government and private actors within a target country will respond to economic sanctions. I then explore my explanation through an intensive analysis of economic sanctions against Rhodesia, one of the core cases of the sanctions literature. The “lessons” scholars have drawn from the Rhodesian case, especially the ideas that sanctions do not work and that they usually unify the target country, have played a fundamental role in shaping sanctions research by shaping what research questions scholars ask about economic sanctions and what answers they expect. By providing a rigorous alternative account of causation, I force us to reconsider sanctions using a new set of theoretic lenses. My goal is not to advise policymakers about whether or not to use sanctions. After all, the decision to use sanctions is not an intrinsic char­ acteristic of economic sanctions themselves, but a function of the goals policymakers pursue and the means available to pursue them. Rather my goal is to engage in a dialogue between theory and evidence that provides the rigorous, scientifically based causal knowledge that enables policy­ makers to better understand the trade-offs that arise from using sanctions and thus to use economic sanctions more wisely. This book also addresses several broader themes. Economic sanctions sit at the junctures of several important areas of inquiry. By exploring how sanctions influence the politics of target countries, this book increases our

viii

Preface

understanding of the interactions of politics and markets on the one hand, and international and domestic political behavior on the other. By show­ ing how economic sanctions (and other analogous economic shocks) gen­ erate strong societal demands for new political institutions to govern the market as well as strong incentives for governments to supply them, this book advances our knowledge of institutional change. Explaining institu­ tional change currently stands as one of the most important research fron­ tiers of political economy and the new institutionalism in economics and political science. In sum, economic sanctions are useful not only to policy­ makers seeking to manage conflict in a complex and challenging world, they are also useful to scholars seeking to understand the fundamental relationships that underlie social behavior. This project involved research on three continents. It proved more difficult and took much longer to complete than I ever anticipated. I incurred many debts along the way. Dan Johns and Solomon Nkwane proved critical in helping me obtain the necessary permission for field research in Zimbabwe. Terrence Ranger also provided useful advice on how to navigate the Zimbabwean bureaucracy. Without their efforts, it would have taken me even longer to get to Zimbabwe. Peter Duignan, Lewis Gann, Roger Riddell, Elizabeth Schmidt (with whom I corre­ sponded by mail), and Stephen Stedman all pointed my research in many useful directions. I also thank the many people in Britain and Zimbabwe whom I interviewed for this research. Sanctions were a delicate subject at the time, and I am grateful for their willingness to speak openly with me. The Commonwealth Secretariat provided me with a desk and telephone in London, invaluable aids to any researcher in the field. I also thank the archivists and librarians at the British Library, the Hoover Institution, the Institute for Commonwealth Studies, the Public Record Office, and Rhodes House for their assistance. In the early 1990s, I suspended work on this project to become the executive director of the Aspen Strategy Group, a policy program of the Aspen Institute. My experiences with the group gave me important insights into the policymaker’s view of the world and how it often conflicts with the views held by scholars. Joseph Nye, the group’s director, was invaluable in helping me understand both worlds. This book is better as a result. Like the Israelites, this book wandered many years in the desert before finding a home. I discovered that a book that spans international relations, comparative politics, and political economy, but does not fit neatly into any one field, fits poorly with the publishing priorities of many university presses in an age when university presses are being driven increasingly by commercial concerns. White Africa no longer captures the

Preface

ix

editor’s imagination, even though the political, economic, and social issues raised by the struggles over the political future of Rhodesia/Zimbabwe are timeless. I am especially grateful to Chuck Myers, then political science editor of the University of Michigan Press, for believing in the manuscript, and to the University of Michigan Press. Jeremy Shine, Michigan’s new political science editor, and Nichole Argyres and Kevin Rennells ably guided the manuscript through the production process. My many friends in the political science department at Kenyon Col­ lege, where my wife teaches, provided the stimulating intellectual environ­ ment so critical to creative thinking. My discussions with them strength­ ened my conviction that to understand politics deeply is not simply an empirical exercise, but more importantly an intellectual and philosophical one. I also thank Kenyon College for the gracious use of its library resources while I was an affiliated scholar with that institution. I incurred many other important intellectual debts over the course of this project. Robert Bates provided constant intellectual support and encouragement. He taught me to recognize that the large questions of pol­ itics are always refracted through specific events that occur in particular times and settings. Hence, the production of knowledge through the theo­ retically rigorous analysis of these events, with careful attention to richness, context, and detail, is an essential part of the social-scientific enterprise. Peter Lange introduced to me economic sanctions as a rich area of scientific inquiry, guided my early research, and forced me to think analytically and deeply about my ideas. His enthusiasm for intellectual “trespassing” taught me the joys of bridging field and disciplinary boundaries. Jonathan Kirsh­ ner read the final two versions of the manuscript from beginning to end, and I have benefited greatly from his insights. Two anonymous referees at the University of Michigan Press provided invaluable advice for sharpen­ ing my arguments, as did Timothy Frye, Blair King, Patrick McDonald, and Edward Mansfield. Early versions of the manuscript (in whole or part) were read by Kimberly Ann Elliott, Joseph Grieco, Ole Holsti, James Leitzel, Roy Licklider, Kevin O’Brien, Robin Renwick, Beth Simmons, and George Tsebelis. My discussions with Doug McAdam while I was a summer fellow at the Center for Advanced Study in the Behavioral Sciences in Palo Alto improved my understanding of the complex ways in which race can intersect with economics and politics. Research assistance was provided by Laurel Elder, Tresa Rice, and Kevin Bauer. Jeffrey Martinson was especially helpful in preparing the final version. Portions of this book have previously appeared in David M. Rowe, “Economic Sanctions Do Work: Economic Statecraft and The Oil Embargo of Rhodesia Reconsidered,” Security Studies 9, no. 1-2 (2000): 254-87, also published in Power and the Purse: Economic Statecraft, Inter­

X

Preface

dependence and National Security, ed. Jean-Marc Blanchard, Edward Mansfield, and Norrin Rippsman (London: Frank Cass, 2000). I thank Frank Cass Publishers, London for their permission to reproduce this work here. One of the biggest obstacles to a research project of this kind is finan­ cial. I am particularly grateful to the Social Science Research CouncilMacArthur Foundation Program in International Peace and Security for providing initial funding with a two-year grant. The Pew Charitable Trusts, the Irwin Foundation, and the Olin Institute for Strategic Studies at Har­ vard University also supported me at critical junctures of this project. My work was made easier by a strong network of friends and family. John Garofano motivated me and improved the quality of my thinking. Andrew Sobel provided important encouragement during my long search for a publisher. Moral and material support were provided by Mary Booth, Nigel Boyle, Sue and George Gorman, Shelley Harris, and Gertrud LaRoche-Jeschke. I especially thank my wife Pam for being my best friend and most valuable critic. She read countless drafts of the man­ uscript and improved every one. She and my children, Sarah and Stephen, have tolerated much over the years. Even as I write these words, they are building snowmen in my absence. To them I dedicate this book.

Abbreviations

ACCOR ANC ARnI BP BSAC CAB CAPREF

CRO

FCO

FO GENTA NDP POWE PREM PRO RCA RF RNFU RP RTA SASOL TTA UDI UFP ZANU ZAPU

Associated Chambers of Commerce of Rhodesia African National Congress (Rhodesia) Association of Rhodesian Industries British Petroleum British South Africa Company Cabinet Papers (Public Record Office) Central African Petroleum Refinery company (Feruka, Rhodesia) Commonwealth Relations Office Papers (Public Record Office) Foreign and Commonwealth Office Papers (Public Record Office) Foreign Office Papers (Public Record Office) Rhodesia’s oil procurement agency National Democratic Party (Rhodesia) Ministry of Power Papers (Public Record Office) Premier’s Papers (Public Record Office) Public Record Office, London Rhodesian Constitutional Association Rhodesian Front Party Rhodesian National Farmers’ Union Rhodesia Party Rhodesia Tobacco Association South Africa’s national oil company Tobacco Trade Association (Rhodesia) Rhodesia’s Unilateral Declaration of Independence United Federal Party (Rhodesia) Zimbabwe African National Union Zimbabwe African Peoples Union

CHAPTER 1

Markets, Politics, and Influence: Toward a Deeper Understanding of Economic Sanctions

Economic sanctions are an important tool of statecraft. Sanctions lie between diplomacy and military force in terms of the coercion they exert on target regimes. Sanctions also enable policymakers to exert influence from a distance, thus minimizing the risks of deeper entanglement inherent in stronger forms of statecraft such as military intervention. These factors permit policymakers to use sanctions for a wide range of purposes, from adding coercive weight to diplomacy in situations where military responses are disproportionate, impractical, or politically unpopular, to providing stepping-stones to military action in situations where lesser forms of statecraft prove inadequate. In short, economic sanctions are an extremely versatile instrument that policymakers can use to do many things: exert influence;1 avoid the recourse to force;2 build consensus for stronger measures;3 strike balances between multiple and often conflicting objectives;4 send credible signals to other states;5 change the domestic behavior of other countries;6 reinforce international norms by punishing states that violate accepted standards of behavior.7 This versatility makes economic sanctions a well-suited instrument for the rapidly changing world of the twenty-first century. The demise of the cold war bipolar system has left in its wake a less stable and more uncertain world in which the interests and stakes of the great powers in many potential conflicts are unclear and domestic support for military intervention ambiguous. Economic sanctions are a valuable tool for pur­ suing interests in such an uncertain environment by offering policymakers a middle range of options between diplomacy and force that minimize risks of entanglement. Not surprisingly, states have increasingly turned to sanctions as an instrument of choice. Between 1990 and 1994, the UN security council imposed mandatory economic sanctions eight times, com­ pared to only twice in the previous forty-five years.8 The United States has likewise made sanctions a core instrument of its post-cold war foreign pol­

2

Manipulating the Market

icy. Between 1993 and 1996, thirty-five countries were targeted by new U.S. sanctions.9 Despite their clear importance to policymakers, our understanding of economic sanctions remains limited.10 Scholars have focused almost exclu­ sively on discerning whether past uses of economic sanctions successfully achieved the foreign policy goals of the states that employed them.11 By comparing past instances of success and failure, scholars hope to discern the conditions under which policymakers can use economic sanctions most successfully as an instrument of foreign policy. As a result, the his­ tory of the literature can largely be written as a debate between sanctions optimists who argue that sanctions “work” and sanctions pessimists who argue that sanctions “do not.”12 There are several fundamental problems with this approach. First, the literature judges the success of sanctions almost exclusively in terms of the publicly stated demands of the sanctioning governments and then only over a narrow range of the target actors that these governments are seeking to influence.13 This is a serious analytical flaw. “To view the use of economic statecraft strictly in terms of securing compliance with explicit and publicly stated demands,” David Baldwin writes, is “to load the dice in favor of fail­ ure. Third parties, secondary goals, implicit and unstated goals are all likely to be significant components of such undertakings.”14 The oil embargo of Rhodesia, for example, is widely regarded as a sanctions failure because it collapsed soon after it was imposed and could not compel Rhodesia’s gov­ ernment to accept eventual majority rule. Yet as I show later in this book, this view oversimplifies the complex range of goals that Britain pursued in the embargo.15 A close reading of internal British government documents reveals that Britain did not expect the embargo to work. It imposed the embargo not to force Rhodesian capitulation, but to send a credible signal to black Africa and the Commonwealth that it was serious about ending the Rhodesian rebellion and to deflect pressures for even more drastic mea­ sures against the colony. These were goals that Britain substantially achieved. To label the embargo a failure because it failed to obtain Britain’s publicly stated goal of ending the rebellion misinterprets the real purposes of the embargo and denies policymakers valuable information about the ability to use sanctions to send credible signals in an international environ­ ment rife with “cheap talk” in which states possess powerful incentives to engage in deceptive and opportunistic behavior. Second, most studies of the “success” of sanctions use oversimplified analytical frameworks likely to yield inaccurate assessments of sanctions. Sanctions are almost never assessed in comparison to the other instru­ ments of statecraft that policymakers have available to them. It may be that sanctions often fail to achieve their objectives, but this fact cannot be

Markets, Politics, and Influence

3

an accurate guide to policy unless one can also show that some other set of plausible policies would have performed better.16 In pursuing sanctions against Rhodesia, for example, Britain periodically explored whether other potential policies, from using force to end the rebellion to simply handing the whole problem over to the United Nations, would better serve British interests. It consistently concluded, however, that even though sanctions had yielded unsatisfactory results, sanctions still worked better than any plausible alternative. To argue in this case that sanctions were a suboptimal policy because they failed to achieve Britain’s goal of eventual majority rule is clearly wrong. As Jonathan Kirshner succinctly puts it, “No strategy can guarantee success: all one can hope to do is enact the ‘optimal’ policy.”17 Yet the suboptimality of sanctions is precisely what most scholars wrongly conclude when they infer from past instances of “failure” that economic sanctions “do not work.”18 Third, there is a potentially serious selection bias in the universe of sanctions cases that scholars use to estimate the relative success or failure of sanctions as a policy instrument. The most comprehensive listings of sanctions are offered in the successive studies by Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott.19 These data have become the empirical foundation of a number of important studies about sanctions.20 They do not, however, include instances where sanctions are threatened or applied in relative secrecy. To their credit, Hufbauer, Schott, and Elliott readily recognize this limitation.21 Yet it raises serious concerns, for it may be that many successful uses of sanctions never become public. As I show later in the book, Britain’s willingness to aggressively pursue the oil embargo against Rhodesia was severely circumscribed by an explicit, highly successful, and previously unknown South African threat to impose countersanctions on Great Britain should South Africa’s own oil trade be disrupted. South Africa’s threat represents a stunning, successful use of economic statecraft. It also demonstrates that until scholars have better knowledge about the entire universe of sanctions cases, the meanings of probabilistic statements such as Hufbauer, Schott, and Elliott’s claim that sanctions work one-third of the time or Robert Pape’s counterclaim that sanctions succeeded in only 5 of 115 cases are ambiguous at best.22 Finally, it is not clear that assessing the past success or failure of sanc­ tions yields the knowledge that is most useful to policymakers who con­ template using them. Policymakers have repeatedly demonstrated that they turn to economic sanctions for a wide variety of reasons, ranging from the need to placate domestic constituencies to being faced with a lack of feasible alternatives. Given this fact, the question policymakers need answered is not whether to use economic sanctions, but how to use them wisely. Only by enabling policymakers to understand better the likely con­

4

Manipulating the Market

sequences of their actions can the literature assist policymakers in choos­ ing wisely among competing policy alternatives.23 In other words, sound policy guidance requires sound explanatory theory. Yet there is no well developed theory to explain to policymakers how economic sanctions affect the economic and political behavior of the actors against whom they are directed. In 1967, for example, Johan Galtung roundly criticized the then prevailing “naive” theory of sanctions that held that the amount of political pressure exerted by sanctions on the target country is directly pro­ portional to their economic impact.24 Yet, despite almost no empirical support, this simple theory still persists more than thirty years later. As one recent (1994) study notes, “The ‘naive’ theory of sanctions has been exceedingly popular.... it continues to make an appearance in virtually all sanctions debates.”25 The reason is not that policymakers don’t listen to scholars of sanctions, but that scholars of sanctions have devoted precious little effort to understanding and explaining the mechanisms by which sanctions actually work.26

Building Theories about Economic Sanctions

To build theories about economic sanctions, it is critical to realize that economic sanctions may affect the target country’s behavior in a number of ways. By seriously disrupting the target’s economy, they may create domestic political and economic pressure on the target government to change its policies. They may also impair the target government’s ability to pursue its objectives, force it to rethink its behavior by signaling the concerns and intentions of the sanctioning countries, or create a sense of solidarity among its opponents. This multiplicity of channels through which sanctions work also high­ lights that the study of sanctions encompasses many different problems, all of which are critical for a better understanding of sanctions. Thus, the role sanctions play in defining or enforcing norms of interstate behavior, the problems involved with enforcing multilateral sanctions, why coun­ tries and international organizations turn to sanctions, and how sanctions influence the actors against whom they are directed are all important ele­ ments of the sanctions puzzle. A general theory of economic sanctions must explain how sanctions exert influence through their many different mechanisms—legal, social, psychological, economic, and political; hence, building such a theory will necessarily be an interdisciplinary exercise, drawing on and synthesizing concepts from across the social sciences. Developing the theoretical building blocks of one strand of a more general theory of sanctions—understanding the ways in which sanctions exert

Markets, Politics, and Influence

5

influence via their impact on the domestic economy—is the goal of this project. I choose this focus for several reasons. First, this is one of the primary avenues by which sanctions exert influence on targeted parties. Economic sanctions, one study notes, “are explicitly designed to disrupt, to a greater or lesser extent, the economic life of a society. . . . The disruptions to the economy are designed to hurt a target society, and to hurt it enough to produce political change—by prompting wrong-doers to change their behavior, or by prompting their opponents to overthrow them in a revolu­ tion or a coup.”27 Yet, there are few studies that try to flesh out in any detail the domestic economic and political processes that lead to these out­ comes.28 Most studies simply describe how sanctions affected the target country’s economy and then ask whether the target country’s behavior changed in the ways sought by the sanctioning countries, neglecting alto­ gether how such changes might come about. Second, focusing on the domestic political impact of economic sanc­ tions is important because changing the domestic political behavior of the target country is often a primary objective of the policymakers that use sanctions. Sanctions are often aimed at subverting the governments of the target countries.29 For example, U.S. sanctions against Cuba were intended to undermine Castro, while sanctions against Haiti were intended to compel that country’s military junta to return Jean-Bertrand Aristide to power. Moreover, the United Nations’ sanctions against Rhodesia and South Africa or the recent sanctions against Yugoslavia were less con­ cerned with these countries’ external behavior than with internal relations among their major ethnic groups. If changing the domestic behavior of another country is to be an important objective of the policymakers using sanctions, they need to understand the ways in which the economic impacts of sanctions may influence that behavior. A final reason for studying the domestic political impact of sanctions is that sanctions often fail precisely because target governments can manipulate the impact of sanctions in ways that advance their own inter­ ests. In his 1967 study of sanctions against Rhodesia, Galtung observed that societies rarely respond passively to economic sanctions, but react instead in ways that mitigate their effects. As a consequence, “the target society may even be partly strengthened because of hidden forces that are activated. The goals of the system may not only be maintained but even be reinforced; the sending nation(s) not only may fail to achieve their goals, but may even contribute to exactly the opposite of what they hoped for.”30 The tendency of sanctions to strengthen the regimes they are targeted against is one of the most widely noted empirical findings in the sanctions literature. This outcome has been noted not only in the Rhodesian case,

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Manipulating the Market

but in other cases such as the U.S. sanctions against Cuba as well as more recently in the cases of U.S. sanctions against Haiti and Western sanctions against Serbia.31 It is, according to Baldwin, the “single most common basis for the charge that economic sanctions tend to be counterproduc­ tive.”32 Yet, aside from Galtung’s study, little effort has been devoted to understanding how and why this outcome emerges.33 As a consequence, the central theoretical puzzle posed by economic sanctions, how govern­ ments can often survive—and even benefit from—severe disruptions to the national economy, remains largely unanswered. By examining how an economic sanction’s market disruptions trans­ late into political behavior in the target country, I explore this puzzle in depth. In particular, I will show how a target government can use sanc­ tions to reorganize the country’s traded markets in ways that enable it both to create clienteles among major domestic actors as well as to disor­ ganize potential political opposition. Thus, the national unity that often emerges in response to sanctions is not simply the spontaneous upwelling of popular support for a beleaguered regime or the automatic response of a society to external coercion, but a political construct with substantial roots in the political organization of the marketplace. In reaching this con­ clusion, moreover, this study breaks new theoretical ground. Whereas Galtung relied upon concepts drawn from social psychology to argue that external coercion produces internal cohesion, I use the tools of political economy to explore how target governments may use sanctions to restruc­ ture markets in ways that consolidate or extend their domestic political power.

Expanding Knowledge of Economic Sanctions and Rhodesia

I explore my theory of how economic sanctions affect domestic politics through a detailed examination of the British and UN sanctions against Rhodesia. Great Britain and the UN imposed economic sanctions against this central African colony when it declared itself independent of British authority in an act known as the Unilateral Declaration of Independence (UDI).34 The sanctions’ primary objective was to force Rhodesia’s white minority government to renounce its claims of independence and accept constitutional mechanisms that would produce eventual majority rule in the colony. These economic sanctions comprise one of the central cases of the sanctions literature. By 1968, nearly all trade with the colony was legally prohibited. Moreover, these sanctions represented the first instance in

Markets, Politics, and Influence

7

which the United Nations imposed comprehensive mandatory economic sanctions against another actor. Although sanctions had a profound impact on Rhodesia’s economy and society, they produced little overt political pressure on the Rhodesian government. Significant domestic political opposition to the government practically disappeared among the white community. As a consequence, the Rhodesian “crisis” lingered for some fourteen years, until the cumulative pressure of economic sanctions and a bitter guerrilla war in the countryside, also known as the Chimurenga war, forced the Rhodesian government to finally accept at Lancaster House a settlement leading to immediate majority rule and the renamed African country of Zimbabwe. I focus my study on the Rhodesian sanctions for several reasons. First, the central task of this study is to construct causal theories about how economic sanctions influence the domestic politics of target states. Case studies are extremely valuable in this process. They allow researchers to identify key variables and map out causal processes that may then be tested against experiences elsewhere.35 By exploring Rhodesia’s responses to sanctions in depth, I seek to construct a theoretically rigorous and empirically detailed causal explanation of how the market disruptions of sanctions affected Rhodesian politics. My goal is not just to “explain” Rhodesia’s responses to sanctions, but even more important to provide highly plausible alternative accounts of causation that force us to consider economic sanctions in new ways. Second, Rhodesia is especially appropriate for building theories about the central empirical puzzle posed by sanctions—how target gov­ ernments may survive, or even exploit, severe disruptions of the national economy. This puzzle looms especially large in the Rhodesian case because Rhodesia seemed especially vulnerable to economic sanctions. Over one-third of its foreign exchange was earned by a single commod­ ity—tobacco—whose sales were concentrated in a single country—Great Britain. Moreover, tobacco was a politically important industry. Rhode­ sian tobacco growers were not only the strongest economic interest group in Rhodesian politics, but also the most important constituent of the rul­ ing Rhodesian Front party. Cutting Rhodesia’s tobacco trade thus appeared to threaten the very heart of the Rhodesian government’s domestic political base. Yet, despite devastating Rhodesia’s tobacco industry, sanctions did not fragment domestic political support for the Rhodesian Front government. If anything, the Rhodesian case is most noted for the opposite response, the government’s apparent ability to unify the white populace behind a policy that isolated the country interna­ tionally and risked destroying it economically. The third reason I explore Rhodesia’s internal responses to sanctions

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Manipulating the Market

in detail derives from the importance of the Rhodesian case to the sanctions literature. In the process of scientific inquiry, prior knowledge shapes our expectations about what questions to ask and what answers to expect. If this knowledge is itself faulty or misleading, so too can be the empirical findings and research programs that follow from it. Rhodesia’s domestic responses to economic sanctions underlie many of the core “lessons” of the sanctions literature, especially the claims that sanctions do not work and that economic sanctions are counterproductive, and thus they form a criti­ cal element of the prior knowledge that shapes research about sanctions. Yet, it is critical that the Rhodesian case be reexamined using histori­ cal hindsight. Most studies of the Rhodesian sanctions appeared during or immediately after the sanctions ended and cannot judge the case with his­ torical perspective. This study benefits not only from the insights gained through historical distance, but also from new sources of evidence such as access to previously classified government documents and interviews with major figures of the Rhodesian sanctions. It also joins a body of work questioning the previous lessons drawn from the Rhodesian case.36 It is now apparent that sanctions contributed significantly to com­ pelling the white Rhodesian government to accept majority rule. Sanc­ tions dominated Rhodesia’s political and economic behavior. From UDI onward, Rhodesia’s single most important foreign policy goal was to end sanctions—either by making sanctions irrelevant through sanctions-busting or by reaching an acceptable agreement with Britain. Although the scale of sanctions-busting was significant, it failed to negate the damaging effects of sanctions on Rhodesia’s economy. This, according to Ian Smith, then prime minister of Rhodesia, made a settlement with Great Britian imperative. Speaking to the BBC several years after Zimbabwean inde­ pendence, Smith recounted that recognition by Great Britain “was key to the whole thing. ... If Britain had supported us it would have meant the end of sanctions. This was our biggest problem, always. Sanctions and economic war. It (settlement) would have reinstated confidence within our country.”37 As a consequence, Rhodesia kept coming back to negotiate with Britain throughout the fourteen years of sanctions.38 Only by settling with Britain could Rhodesia end sanctions and regain the open access to international markets that it so desperately needed. Sanctions not only kept Rhodesia at the bargaining table, they were critical in bringing about majority rule in the country. By the late 1970s, the long-term effects of sanctions had undermined the Rhodesian govern­ ment’s position. Sanctions led to shortages of capital goods and foreign investment that impeded growth and made the economy extremely vulner­ able to the oil and commodity price shocks of the mid-1970s. By the late 1970s, according to one observer, Rhodesia’s economy was held together

Markets, Politics, and Influence

9

“by rubber bands and paper clips.”39 The deteriorating economy caused some social groups that had originally acquiesced to the government’s bid for independence, such as the business community, to begin talking with the African nationalists. It also fed a spreading guerrilla war as growing numbers of unemployed blacks turned to revolutionary activity. Sanctions hampered the government’s ability to counter this turn of events because extracting ever more resources from an economy already strained to the limit proved progressively more difficult. The result was a downward spi­ ral that left the white government no way out except by acceding to imme­ diate majority rule—a concession that far exceeded Britain’s original demands in 1965. Zimbabwe’s settlement at Lancaster House was far more favorable than would have been the case had Britain abandoned sanctions in the late 1960s because they “didn’t work.” Fourth, by exploring Rhodesia’s internal responses to sanctions, I can compare my political economy-based explanations for the failure of sanctions to subvert the Rhodesian Front government with highly plausi­ ble explanations based on norms of group or racial solidarity. When sanc­ tions were imposed in 1965, Rhodesia’s population consisted of approxi­ mately 220,000 whites and 4 million blacks. Although the white community dominated political and economic life in the colony, whites had reason to fear sanctions and Britain’s stated goal of instituting major­ ity rule. The white Rhodesian community had for almost seventy years used its virtual monopoly on political power to create a system of racial oppression that systematically advanced white interests over black. Both the Mau Mau rebellion in Kenya and the civic chaos following Belgium’s abrupt pullout from the Congo fanned popular white fears about the likely consequences of losing white political control. Moreover, race was a prominent theme in the history of Rhodesian politics. Garfield Todd had been ousted as prime minister in 1958, in part because he sought to open Rhodesia’s political system to greater black participation.40 His successor, Sir Edgar Whitehead, was swept from power by the Rhodesian Front party in the 1962 election when he promised to repeal the Land Apportionment Act, the central institution of Rhodesia’s race relations that reserved the colony’s most productive agri­ cultural land for whites. The Rhodesian Front, for its part, successfully used race as a rallying point in its electoral campaigns. One of its most inflammatory posters showed the legs of white and black schoolgirls standing in line with the caption “rhodesia is not ready for this.”41 It is difficult to imagine more favorable circumstances for arguing that external coercion forges internal cohesion. The white Rhodesian com­ munity was small, homogenous, and isolated. It had already been mobi­ lized against even minor political concessions to the colony’s black inhab­

10

Manipulating the Market

itants. Yet Britain’s goal in the conflict was even more drastic—to force a settlement leading to majority rule in the colony. This makes the rallying of the white Rhodesian community behind the Rhodesian Front a hard case for exploring other explanations of Rhodesia’s domestic political unity in the face of economic sanctions. Yet, when examined closely, racial solidarity proves surprisingly weak as an explanation. Although the Rhodesian Front purposefully played on racial fears in the white electorate, this alone was insufficient for generating and sustaining broad support for the government and its policy of unilateral independence. The government also found it necessary to squelch political debate in the colony. It gave itself powers to deprive citi­ zenship to any person bringing the community into “disesteem,” which some Rhodesians interpreted as a clear government threat to deport its opponents.42 Garfield Todd was placed under house arrest. Black nation­ alist leaders were either jailed or exiled—and, in the case of Herbert Chitepo, assassinated43—not only to prevent them from mobilizing black opinion, but to keep them from appealing to white opinion as well. Cen­ sorship and propaganda were facts of life. And, unless it was voiced by the electorally unpopular multiracial parties at the fringes of the political spec­ trum, open criticism of the government and its policy of unilateral inde­ pendence from Britain was treated by the government as treason. The gov­ ernment could and did threaten to retaliate against those who criticized it too strongly. Significantly, as we shall see, many of its means for doing so lay in the political control of the economy. Moreover, racially based explanations of Rhodesia’s behavior under sanctions oversimplify the complex contours of this conflict. Racial atti­ tudes and economic interests intertwined tightly in the fabric of Rhodesian politics. Rhodesia’s race relations were deeply embedded in the structure of the national economy.44 Economic interests profoundly shaped the position of various groups on racial matters. The white farming commu­ nity and white labor were most opposed to black economic and political advancement, in part because they benefited most heavily from the struc­ ture of Rhodesia’s race relations. On the other hand, the white business community saw gradual black economic and political attainment as criti­ cal to Rhodesia’s future prosperity. It stood to benefit both from increas­ ing black purchasing power and from dismantling the market-distorting racial laws that were the central structures of the Rhodesian economy. Even the major schism in Rhodesian politics, that between black and white, was thoroughly suffused by considerations of economic interest and economic justice. The primary grievance fueling the Chimurenga war against the white regime was the pattern of property rights that conferred largely into white hands the ownership and control of the country’s most

Markets, Politics, and Influence

11

valuable natural resource—land. The war was, according to Robert Mugabe, leader of the Zimbabwean African National Union (ZANU) and now president of Zimbabwe, being fought over “land, land, land.”*5 David Caute, a journalist who covered the final years of white Rhodesia, elo­ quently captured this longing in an interview with a school teacher whose students were being recruited by the nationalist fighters. “Do the guerillas discuss economic issues?” [Caute asked.] “Land,” Joseph put in. “People ask the ‘boys’: when you come to power, shall we still be confined to these rocky patches of soil where nothing grows well and no water flows? The ‘boys’ tell them, no, the big white estates will be divided up, you shall have the fertile land.”46

In short, to reduce Rhodesian politics to race alone is to misinterpret the complex patterns of economic interest, political identity, and racial conflict that characterized this struggle. It is also mistaken to characterize Rhodesia’s conflict with Britain, especially in its early phases, as a stark choice between resisting sanctions or submitting to immediate majority rule. Although the British govern­ ment desired eventual majority rule in the colony, it would “not go so far as to commit ourselves to majority rule immediately upon termination of the rebellion,” but sought instead to “establish some form of government acceptable to all the people of Rhodesia.”47 In other words, Britain desired a “moderate” solution that would guarantee eventual majority rule by set­ ting in motion a constitutionally entrenched process that would over time progressively expand the size of the black electorate. Although opposed by the Rhodesian Front party, Britain’s position nonetheless overlapped sub­ stantially with portions of the white electorate. The Rhodesian business community, for one, had traditionally taken a liberal position inside Rhodesian politics on racial issues. It saw black economic and political advancement as a fact of life and felt that creating a strong black middle class that gradually shared the reins of political power would serve as a bulwark against the more virulent forms of nationalism then sweeping the African continent. In fact, Rhodesia and Britain came very close to settling in the Tiger talks of 1966 and the Fearless talks of 1968 (named after the warships on which they were held). According to a secret British source present at the Rhodesian cabinet’s deliberations of the Tiger proposals, nine cabinet ministers initially favored accepting the settlement, two were uncertain, and only one opposed it, while Smith himself took no part in the discus­ sion. Only after the day wore on did sentiment build to reject the proposal, but even then, according to the source, acceptance of the settlement had

12

Manipulating the Market

remained a possibility.48 The terms of the Fearless proposals would have delayed the onset of majority rule by at least ten to fifteen years, but were rejected by the Rhodesian cabinet only after strenuous debate. They were, however, more favorably received not only by the business community but by other segments of Rhodesian society. As Harold Hawkins, then head of the Rhodesian air force, recalls:

We missed a golden opportunity at the time of HMS Fearless in 1968. On those terms, the then army commander and I went along to Ian Smith, the Prime Minister.... We urged him to accept the settlement terms. We said to him that we knew there were some elements on the right of his cabinet who would wish to turn them down, but our advice to him was to accept . . . but he did not accept the Fearless terms. I always thought that was a great, a very, very great mistake.49 In short, compromise solutions acceptable to portions of the white electorate seem possible.50 As a result, the absence of outspoken white opposition must be seen not as a clear-cut indicator of white solidarity, but as the ability of the regime to preclude the emergence and discussion of credible alternatives on the domestic political agenda. White unity was not spontaneously generated by sanctions, it was politically constructed by the Rhodesian Front party as a means of advancing its own vision of Rhode­ sia. It was a remarkable political achievement. This turns our attention from explanations of Rhodesian politics based on racial solidarity to con­ sidering the ways in which the Rhodesian Front created the appearance of solidarity by defining and controlling the domestic political agenda. Again, as we shall see, many of its means for doing so lay in the political organization of the marketplace. Finally, I explore Rhodesia’s domestic responses to sanctions because they left a lasting legacy in Zimbabwean political and economic life. Not only did sanctions help bring majority rule to Zimbabwe, they also shaped its economic prospects. Under pressure of sanctions, the Rhodesian gov­ ernment extended political control over all major sectors of the economy. Many of the market institutions designed by the Rhodesian Front to man­ age the political impact of sanctions survived the transition to majority rule. They were adapted and even extended by the Mugabe government as a means for attaining its political vision of Zimbabwe’s transformation.51 Thus, understanding how sanctions led to the emergence of new economic institutions to govern the economy and how these institutions persisted and later shaped Zimbabwe’s development are key to understanding its political and economic prospects.

Markets, Politics, and Influence

13

Expanding Knowledge of Political Economy

I explore how economic sanctions affected Rhodesia’s domestic economic and political behavior from the perspective of political economy. The modem field of political economy encompasses two overlapping areas of inquiry. The first explores how markets and politics interact. It analyzes both how the economy influences the political process as well as how actors may use the political process to influence economic outcomes. The second is an analytic approach to understanding social behavior. It uses the tools of neoclassical economics to explain how political and economic institutions produce social outcomes by shaping the behavior of self-inter­ ested individuals. This study addresses both elements of political economy. First, the interaction of politics and markets is a central theme of this book. States pursuing economic sanctions manipulate international market flows as a means to alter the political behavior of other actors. Thus, one of the core theoretical issues raised by economic sanctions is understanding how eco­ nomic disruptions influence political behavior. In exploring this theme, moreover, this book draws on the second area of political economy— applying the tools of neoclassical economics to understanding social behavior. I use the tools of partial equilibrium analysis to understand how economic sanctions disrupt the target country’s traded markets and how these economic shocks, in turn, animate its politics by engendering inter­ ests, altering preferences, and creating political opportunities for actors in the target country. By exploring the domestic political economy of economic sanctions, this work also illuminates other important areas of interest. First, this study contributes directly to the growing literature on open economy political analysis, also called the open polity school of comparative poli­ tics, that uses economic trade models to analyze how the international economy influences domestic politics.52 This literature argues that interna­ tional economic change generates societal demands for policy by altering the fortunes of different economic groups (factors, sectors, firms) inside the domestic political economy. Winners from a shift in world market con­ ditions will generally lobby to consolidate their gains while losers will seek to redress their losses.53 As a consequence, international economic shocks rarely operate directly on governments, but are instead presented to gov­ ernments in the form of political demands emanating from within and through the structures of the domestic political economy. This study shares with the open polity school both a substantive inter­ est in understanding how the international economy influences domestic

14

Manipulating the Market

politics, as well as a theoretical approach that uses economic trade models as the starting point for political analysis. It departs from the open polity school, however, in one significant respect. Open polity analysis explains the international origins of domestic demands for policy by pointing to the domestic distributional consequences of international economic change and how these demands are subsequently filtered through the country’s economic and political institutions to determine the content of its poli­ tics.54 This focus is problematic on two counts. First, it minimizes the role of politicians. The economic actors (factors, sectors, firms) that populate open polity models are generally not political actors unless they have been first organized and mobilized by politicians. Thus, the domestic political demands that emerge in response to a changing world economy are not determined simply by who wins and who loses in the domestic economy, but by how politicians mobilize and use these groups to compete for power within the country’s economic and political institutions. Second, although open polity analysis recognizes the role that institu­ tions play in shaping the domestic politics that emerge from international economic change, this recognition itself raises an even more fundamental issue. Profound economic change not only generates societal demands for policy, it also serves as the midwife of institutional change. Economic cri­ sis renders politics fluid by altering the configuration of interests in the political economy, straining existing political alignments and making pos­ sible the forging of new political coalitions.55 This fluidity provides politi­ cians the opportunity to protect important constituencies and consolidate new or existing political coalitions by creating institutions that embed their interests in the very structure of the political economy. In short, the political and economic institutions that structure politics do not stand outside the political process, but are instead a product of it. They are created by politicians in moments of opportunity to lay the foun­ dations for sustained political power. But if institutions are created by politicians, then it is politicians who also determine the nature of the polit­ ical demands that ultimately emerge in response to profoundly changing international economic conditions.56 For by altering the structure of the country’s economic and political institutions, politicians can organize and disorganize economic groups as political actors, govern how their demands are handled in the policy process, and hence determine how the economic shock becomes defined—and answered—as a political problem. The key issue for understanding how the international economy influences domestic politics is not determining how a given change in inter­ national economic conditions affects the economic interests of different societal actors, nor even how demands for policy are filtered through the country’s economic and political institutions. It is instead determining

Markets, Politics, and Influence

15

how economie change affects the political interests of politicians. Thus, rather than focusing on how economic shocks lead to societal demands for policy, this study instead focuses on how economic shocks alter the incen­ tives of politicians: by creating opportunities for them to organize and dis­ organize economic interests as they seek political power and, even more important, to determine how economic shocks become transformed into political issues by recasting the institutional foundations of the domestic political economy. Finally, by exploring how the international economy influences domestic politics, this study also speaks to key themes in international political economy. One is understanding the political implications of inter­ national economic interdependence. The vulnerabilities inherent in inter­ national economic exchange are cast in sharpest relief by the use of eco­ nomic sanctions. Sanctions are an explicit attempt by states to exploit for political gain the economic dependence of other actors on world markets. Thus, by showing how economic shocks alter the political incentives of politicians, this study also shows how economic interdependence can con­ strain the policy choices of governments. By showing how governments can mitigate the political consequences of sanctions by reorganizing the political economy, this study also shows both how governments may cope with the political vulnerabilities inherent in economic interdependence by reorganizing the country’s domestic markets, as well as how international economic interdependence can profoundly influence the structure of a country’s economic, political, and social institutions. Another theme from international political economy that this study enables us to understand better is the meaning of national “economic secu­ rity” in an integrating world economy. Unlike traditional notions of national security that can claim the territorial or physical integrity of the country as a common goal for all members of society, no such parallel notion of economic security can exist. The fundamental starting point for any discussion of economic security must be that international economic exchange divides societies. As a result, how “economic security” comes to be defined is inherently a question of politics. Different definitions of eco­ nomic security will connote different distributions of economic resources and property rights inside domestic society, with different sets of winners and losers. Thus, a state’s “national” economic interests do not start at the water’s edge and emanate outward to the international system, but rather spring from a deeper political struggle over how wealth and power are allocated in domestic society. In short, economic security is not structurally determined by the economy’s position in world markets, it is politically defined by the domes­ tic political process. This means that the key issue for understanding eco-

16

Manipulating the Market

nomic security, and the strategies states use to pursue it, is not the expo­ sure of the national economy to external economic shocks nor even how this vulnerability can be manipulated by other states. It is instead how national politicians exploit this vulnerability as they compete for power within the country’s economic and political institutions, and how this competition determines the policy responses that result. The study of international political economy must move away from explanations that treat states as unitary actors and toward understanding the ways in which the international behavior of states is politically constructed by national politicians. By showing how Rhodesia’s politicians sought to use sanctions to further their domestic political goals, this study contributes to this needed shift in focus. In sum, just as economic sanctions are useful to policymakers because they do many things, so too are they equally useful to scholars. Economic sanctions sit at the junctures of several important areas of inquiry. They are a form of international interaction between states, yet they exert influence via the domestic politics of the target country. Sanctions are also an economic instrument that policymakers use to achieve overt political ends. By exploring economic sanctions and how they influenced Rhode­ sia’s domestic economic and political behavior, this study becomes an exercise in building bridges between different fields and disciplines in the social sciences. Using economic sanctions, this study advances our knowl­ edge of links between international and domestic politics on the one hand, and economics and politics on the other.

Method of Inquiry and Organization of the Book

This book builds theories about the domestic political consequences of economic sanctions for the target country. In chapter 2,1 develop a partial equilibrium framework for understanding how sanctions alter the political incentives for politicians to intervene and reorganize a country’s markets. I seek to create an internally consistent, deductive, high-leverage theory to explain a country’s behavior under sanctions. Because my theory is derived not from the case under study, but from widely accepted standard economic theory, I not only provide a highly plausible explanation of Rhodesia’s behavior under sanctions. I also provide a deductively fertile set of propositions that should be readily generalizable to other cases of sanctions as well.57 My empirical strategy is to explore sanctions against Rhodesia both longitudinally over time and cross-sectionally across markets. Chapter 3 explores the background to the Rhodesian conflict, in particular, the racial

Markets, Politics, and Influence

17

polarization of Rhodesian politics in the years before UDI. Chapters 4, 5, and 6 explore Rhodesia’s domestic responses to sanctions across several markets—tobacco, mining, commerce, domestic manufactures, and oil. Studying the impact of sanctions upon individual markets allows me to increase the number of empirical observations associated with the Rhode­ sian case, a common research strategy in “small-AT studies. I can thus highlight how domestic responses to sanctions varied across markets and market structures, as well as the range of responses domestic actors pur­ sued when faced with sanctions. These markets are important for several reasons. First, each com­ prised a significant sector of the Rhodesian economy. Tobacco earned the bulk of its foreign exchange; oil was a critical input; mining had played an important role in the country’s development; commerce and the domestic manufacturing sectors were among the largest contributors to Rhodesia’s GDP. Second, each market had a different relationship to world markets. The tobacco and mining industries were major exporters; oil was imported and had no domestic source of supply; commerce not only mediated between world and local markets, but within Rhodesia between producers and consumers; domestic manufactures represented the import-competing sector of the economy. Third, sanctions on Rhodesia’s oil and tobacco were considered by actors of the time to be critical to the success or failure of the sanctions effort. Finally, the major economic actors in Rhodesia’s markets for tobacco, mining, oil, commerce, and domestic manufacturing differed substantially in their relationship to the Rhodesian government. Tobacco farmers were the primary constituency of the government; the multinationals that dominated Rhodesia’s mining and oil markets were inherently distrusted by the government as representing foreign interests; while the commercial, manufacturing, and mining interests—which were collectively regarded as the Rhodesian “business community”—com­ prised the core of white opposition. In the first four markets of the study (tobacco, mining, commerce, and domestic manufactures), I trace economic development of the indi­ vidual sectors and locate their positions within Rhodesian politics. I then ask how the actors in each market were affected by sanctions, how these economic dislocations created political pressure on the government, how the government responded to these pressures, and how this strategic inter­ action generates the patterns of behavior we observe. In the fifth market, oil, I take a slightly different tack. Because the oil market of southern Africa was deeply integrated, I explore how the economics and politics of oil were determined jointly by the actions of a handful of multinational oil companies and the governments that hosted them. There are three reasons that all the chapters focus particular attention

18

Manipulating the Market

on the period from the imposition of sanctions to the attempt by Britain and Rhodesia to settle in the abortive Smith-Home agreement of 1972. First, this was the most intense period of institution-building by the Rhodesian Front in response to sanctions. The dramatic changes in the nature and structure of the Rhodesian political economy wrought by sanc­ tions took place primarily within the first few years that sanctions were in effect. Once these new institutions were created to govern trade and the economy, economic and political life settled into a pattern that, according to one prominent businessman, became routine and even comfortable.58 Second, the politics of institutional change are path dependent. Because institutions are often difficult to change, institutions created in the first period also set the stage on which political conflicts are played out in later periods. Thus, understanding the development of Rhodesian politics over the history of the sanctions era requires understanding how Rhode­ sia’s initial responses to sanctions set the parameters within which it could manage the economic and political challenges of later periods, especially the commodity price shocks of the mid-1970s and the spreading Chimurenga war. The third reason for focusing on the early period of sanctions is that the failure of the Smith-Home agreement shifted fundamentally the strate­ gic context of the conflict between Rhodesia, Britain, and the black nationalists. This agreement sought to wash Britain’s hands of the Rhode­ sian problem by offering Rhodesia independence on highly favorable terms. The agreement foundered, however, when Britain discovered that it was opposed by an overwhelming majority of Rhodesia’s black inhabi­ tants.59 This led Britain to despair that it would be able to compel a settle­ ment with Rhodesia. It also convinced the black nationalists that sanc­ tions and international pressure alone would not bring majority rule to Rhodesia (Zimbabwe) and led them to intensify the Chimurenga war in the hopes of achieving a violent overthrow of the Smith regime. As a con­ sequence, Rhodesian political behavior from the failed Smith-Home agreement onward would become dominated not simply by the need to counter the economic damage inflicted by sanctions, but also by the need to fight and win the spreading and increasingly bitter “battle in the bush.” Thus, distinguishing the distinctive domestic political consequences of economic sanctions is easiest during the initial stages of the conflict, before the Rhodesian government faced the dire military threat posed by the black nationalist armies. Finally, I focus in this study primarily on the struggles that sanctions generated within Rhodesia’s white community. This choice is driven by two factors. The first is that because they were excluded from power,

Markets, Politics, and Influence

19

blacks did not play an important role in the domestic politics of sanctions until the Smith-Home agreement convinced the nationalist parties to seek a violent resolution to the crisis. My focus does not imply that blacks did not suffer from sanctions or that the effects of sanctions on blacks were not important to the final outcome. The Smith government consciously sought to shift the costs of sanctions onto blacks. Rhodesia’s inability to generate the growth necessary to absorb young blacks into the work force also created a pool of fighters available to the nationalist armies. But these effects had little influence on Rhodesian politics in the initial half-decade of sanctions. Second, Britain’s primary objective in using sanctions was to alter the political behavior and preferences of Rhodesia’s whites. Accord­ ing to a British policy directive on sanctions: Our principal target is therefore the white community in Rhodesia and their supporters outside. The aim must be to promote early and complete disillusion with the motives, politics and performance of the Smith regime.... The white population as a whole must be hit hard economically, politically and psychologically, so that they become convinced that continued support for Smith means an end to life in Rhodesia as they have known it. We therefore seek an immediate and painful dislocation of normalcy leading to rejection of the regime, with special measures which will touch the convenience and pockets of the ordinary voter.60

Social science consists of constructing, testing, and refining theories about social behavior. I explore Rhodesia’s domestic responses to economic sanctions using the method of “analytic narrative.” This approach com­ bines the rigor of analytic forms of reasoning used in economics and polit­ ical science with the narrative form more common to history. Its advan­ tages lie in the ability to produce knowledge and understanding both through richness, texture, and detail, and by extracting explicit lines of for­ mal reasoning from events that occurred in particular times and settings.61 By carefully exploring Rhodesia’s responses to economic sanctions, I seek to deepen our understanding of that conflict by producing a historically accurate, finely grained, and causally rigorous explanation of the colony’s behavior under sanctions. By grounding my explanations of Rhodesia’s responses to sanctions in widely accepted standard economic theory, I also seek to derive a set of highly plausible hypotheses about the ways in which economic sanctions—and international economic shocks more gener­ ally—influence a country’s domestic politics. Developing these hypotheses is the task to which I now turn.

CHAPTER 2

Economic Sanctions, Collective Action Dilemmas, and Institutional Change

The core conceptual problem of this study is nearly identical to the core problem of the open polity literature in comparative and international political economy: how do sudden changes in a country’s international economic environment affect its domestic political behavior? In this chap­ ter, I build on the insights of the open polity literature and its critics to explore how economic sanctions affect the target country’s domestic poli­ tics. Drawing from the open polity literature, I employ simple economic models and neoclassical reasoning to explore how economic sanctions impose economic costs and benefits on domestic actors, alter the underly­ ing distribution of societal preferences for government policy, and thus create the potential for the emergence of new political coalitions to pres­ sure or challenge the government. Like the open polity literature’s neoin­ stitutionalist critics, I do not assume that changing distributions of societal preferences translate directly into political outcomes.1 I focus instead on how a country’s domestic institutions shape the incentives for the political competition that emerges in response to sanctions and, even more impor­ tant, on how sanctions enable the target government to change these struc­ tures to determine the forms this political competition takes. I build my argument in two steps. I show first how the economic shock of sanctions generates societal demands for the target government to restructure sanc­ tioned markets by creating substantial collective action dilemmas among actors in these markets. Second, I show how the government can manipu­ late this demand to build new institutions that suppress domestic dissent and build networks of resilient political support.

The Domestic Political Economy of Economic Sanctions

Trade sanctions fall into four categories. They may be applied against countries that are small on world markets (are price takers), either on that country’s exports or on its imports. Or sanctions may be applied against 20

Collective Action Dilemmas and Institutional Change

21

countries that are large on world markets (have market power), again on that country’s exports or on its imports.2 This yields four different cases of sanctions: against a small country’s exports; against a small country’s imports; against a large country’s exports; against a large country’s imports. The domestic economic and political consequences of these trade disruptions are similar across all four cases. I will only explore two cases— sanctions against a small country’s imports and exports—in the body of the chapter. I treat sanctions against a large country in an appendix. Case 1: Sanctions against a Small Country's Exports

Figure 1 is a back-to-back partial equilibrium model depicting the effects of a sanction against a small country’s exports.3 The left-hand panel rep­ resents the target country’s external market for exports. The target coun­ try’s supply of exports to world markets is given by the curve S'. It relates the quantity of exports supplied to world markets to price by tracing out the difference between the domestic supply and demand schedules given in the right-hand panel. At the autarky price, Pa, exports will be zero because domestic demand equals supply. As the world price rises above autarky levels, supply exceeds domestic demand and the quantity of exports rises. Hence, the export supply schedule rises upward to the left.4 Because this is the small country case, world demand for this country’s exports is the world price line, Pw. At Pw the country exports OX to world markets. The right-hand panel depicts the domestic market for the exported good, with domestic supply and demand given by S and D respectively. At free trade, the domestic price is given by the world price Pw. The country produces OH of the good, while consuming OE. The excess of production over consumption, EH, is exported to world markets and equals OX in the left-hand panel. Suppose some of this country’s trading partners impose a boycott. This segregates foreign importers into two groups: those that participate in the boycott (X'X), and those that do not (OX')5 Importers who boycott this country will not buy this good at any price, while nonparticipating importers will purchase this export at price Pw or below. The effect is to kink the demand curve for exports so that it is horizontal at Pw over the range of nonparticipating importers (OX'), turning straight downward at X'. Domestic exporters perceive the boycott as a drop in demand and respond by competitively lowering prices to Ps to secure sales to the importers who remain in the market. In other words, the boycott does not change the world price for this good, but rather drives a wedge between the prevailing world price Pw, and the sanctions-depressed price obtained by this country’s exporters Ps.

22

Manipulating the Market

EXPORT MARKET

DOMESTIC MARKET

Fig. 1. An export sanction

The right-hand panel depicts the domestic economic consequences of the boycott for the target economy. Slackened demand for exports causes production to fall from OH to OG, and price to fall from Pw to Ps. Domes­ tic consumption responds to lower domestic prices by rising from OE to OF. In addition, the sanction creates both deadweight costs and economic windfalls. The total deadweight costs are depicted by Ct in the left-hand panel, which is the sum of Cx and C2 in the right-hand panel. These repre­ sent the loss of producer surplus inflicted by the sanctions. Windfalls are depicted by the areas and W2. The area W2 represents the windfall gained by domestic consumers of the sanctioned good, who now enjoy a lower price for this product. The area Wx (in either the right- or left-hand panel) represents the windfall captured by those foreign importers who still trade with the target economy. As domestic exporters respond to falling demand for this country’s exports by lowering prices below world levels, they provide a windfall to foreign importers who can now buy this good at a discounted price Ps, while its price on world markets remains Pw. In this way, the boycott transfers wealth from domestic exporters of this good to foreign importers. Consequently, the economic cost of the boycott to the target economy consists of the deadweight welfare costs created by the sanction plus the economic windfall that is captured by those foreign importers still serving this market (Ct + W\).6 Its cost to the target coun­

Collective Action Dilemmas and Institutional Change

23

try ’s exporters is even larger, consisting of the entire sum of deadweight costs and windfall transfers (Ç + Wx + PK2). Export Boycotts and the Demandfor Institutional Change Exporters have two alternative strategies to mitigate these losses. The first is to persuade the target government to comply with the boycotters’ demands and cause sanctions to be lifted.7 Where industry pressure is unlikely to force government compliance, and the poor track record of sanctions suggests this is most often the case,8 the only alternative open to exporters is to recover the windfall losses generated by sanctions. These transfers to foreign consumers arise when the sanctions-induced drop in foreign demand causes exporters to lower prices below world levels. Because foreign consumers will pay up to the level of world prices Pw for this output, and domestic consumers up to the relevant portion of the domestic demand curve, exporters may recoup these losses to the extent that they can collude to raise prices above the market-clearing level Ps? The desire to recover the windfall losses from the boycott confronts domestic exporters with a substantial collective action problem.10 Volun­ tary collusion in markets is inherently unstable. A producer price that exceeds the level set by the unconstrained operation of the market is a form of public good. Although all producers desire the higher price, each individual producer is better off by exploiting the collusive efforts of oth­ ers. By marginally undercutting the prices of one’s competitors, each can capture a larger share of the market. But what is rational for each individ­ ual exporter is not rational for exporters as a group. For if each seeks to undercut the prices of others, collusion will not emerge and prices above those set by the market cannot be defended.11 In the absence of mecha­ nisms that compel individual exporters to act in the collective interest, exporters individually and as a group will suffer the greatest possible losses generated by sanctions. This collective action dilemma creates the political demand for the target government to change the institutional structure of this market. Because voluntary efforts to recoup the windfall losses from sanctions are likely to fail, exporters must instead create an institution that can compel them to act in the collective interest. To be credible, this institution requires two properties: first, it must be able to monitor the prices and out­ put of individual producers to ensure that each acts in the collective inter­ est; and second, it must be able to punish those who do not. Efforts to defend prices above market clearing levels simply will not work unless exporters can identify and meaningfully punish those who would cheat on the collusive arrangement.12 This need to monitor and punish the behavior

24

Manipulating the Market

of individual exporters, in turn, generates among this group the demand for government intervention in the market. Because the government con­ trols the state and thus holds a monopoly over the legitimate means of coercion, only the government can confer upon exporters an agency with the means and legal authority to monitor and coerce their individual behavior. Thus, the desire to recoup the windfall losses from sanctions generates among exporters the demand for government intervention to establish a new institution to regulate the operations of the market.13 And, because a government is unlikely to be responsive to the demands of those who actively oppose it, even sanctions that impose substantial export losses create powerful incentives not for exporters to strongly oppose the government, but rather to actively seek its favor.14 Export Boycotts and the Politics of Institutional Supply To explain why sanctions lead exporters to demand new market institu­ tions, however, does not explain why the government will supply them. Governments enter markets not to solve economic problems, but to solve political ones. Because they delineate and enforce rules that govern behav­ ior, institutions are inherently political structures. Governments therefore create institutions not only to enable actors to resolve collective action dilemmas to achieve joint gains, but to solve pressing political problems by reallocating power in social relations in ways that advantage some inter­ ests over others.15 These political considerations are key to understanding the structure and operation of the new institutions that governments are likely to create in response to sanctions. An economic boycott, by design, confronts the target government with a significant domestic political problem. On the one hand, the boy­ cott creates “natural opponents” to the target regime by imposing costs directly on the target country’s exporters. This creates the potential for intense economic and political disaffection among a group that suffers directly as a consequence of the target government’s policies. If left unmet, this disaffection can erode the government’s support and increase its vul­ nerability to potential challengers. On the other hand, the boycott creates few “natural allies” for the target government. Most people tend to spe­ cialize in production by concentrating the primary sources of income in a few major activities, but generalize in consumption by spreading their con­ sumption across a wide basket of goods. Consequently, the consumers who reap a windfall from the sanctions-induced drop in prices are likely to find that the boycott affects only a portion of their total basket of con­ sumption, to be thinly dispersed throughout the economy, and to possess only weak preferences for policies to preserve their economic windfall. In sum, a boycott of the target country’s exports creates an underlying shift

Collective Action Dilemmas and Institutional Change

25

in societal preferences that is highly conducive to opposition politicians or political entrepreneurs who seek to challenge the government or its poli­ tics. Thus, the critical political problem for a target government facing export sanctions is to prevent its opponents from using the economic and political discontent generated by sanctions as a basis from which to mount an effective challenge of the government. The government faces two alternative strategies for accomplishing this goal. One is to coopt those exporters who have been harmed by sanc­ tions by implementing policies that mitigate their losses. The other is to suppress any political dissent that might emerge from this group, either by raising the costs of political opposition so high as to dissuade disaffected groups from engaging in it or by disorganizing these groups as political actors so that they will be unable to articulate a coherent set of political demands on the target government. Interestingly, the government can pursue both strategies by respond­ ing to the exporters’ demand to restructure their market in ways that facil­ itate collusion to raise export prices. On the one hand, by creating an insti­ tution that enables exporters to recover their windfall losses, the government minimizes the economic costs of the boycott to the economy as a whole as well as to exporters as a group. This step tempers dissent by demonstrating the government’s responsiveness to exporters’ concerns. It also incurs few domestic political costs, as the costs of intervention fall on groups that either are politically irrelevant (foreign consumers), are difficult to mobilize (domestic consumers), or may not yet realize the full extent of their potential gains (again domestic consumers). On the other hand, by granting exporters the legal authority to monitor and enforce the behavior of their individual members, the government also raises the opportunity costs of political dissent. The government can now respond to political opposition among exporters by simply taking back the legal authority that allows them to recoup their windfall losses, thus exposing this group to the hostile blast of market forces. Yet ensuring successful collusion in the export industry provides only a partial solution to the government’s need to neutralize potential political opposition. Industry collusion to recover the windfall losses is a second best outcome for exporters, who continue to suffer the deadweight costs of the boycott. Unless government intervention is accompanied by further subsidies to the industry, exporters remain worse off than before sanctions were imposed. Although they now possess weaker incentives to oppose the government, the potential for organized opposition remains. Moreover, the government faces substantial disincentives that may prevent it from credibly responding to political opposition by taking back the legal authority that enables the industry to recover the windfall losses from

26

Manipulating the Market

sanctions. This step is not only a blunt instrument that forces the govern­ ment to punish all exporters, opponents and supporters alike, it also imposes substantial costs on the national economy as it allows foreigners to again capture some of the economic windfall created by sanctions. To attain its political objectives, then, the government must not only enable exporters to recoup their windfall losses, it must do so in a manner that instills political loyalty among producers in this industry. It can accomplish this task through careful institutional design. When govern­ ment and industry design the institution to facilitate industry collusion, they do not meet on equal terms. Not only does the government possess a monopoly over the coercion needed by exporters to recover their windfall losses, but the exporters are themselves under substantial economic pres­ sures from the boycott. The government can exploit this asymmetry in power relations to ensure that the new institution acts in ways that project government power over actors in this market.16 Two points appear to be key. First, by designing the institution so that control over its operations remains in government (not industry) hands, the government makes the institution an agency of government interests in the market, even as it delivers benefits to (and promotes the dependency of) export producers. Second, by designing the institution in ways that make an individual pro­ ducer’s enjoyment of the public good—above market prices—dependent upon a private good—say a license or a production quota—that is avail­ able only from the government or its agency, the government transforms the public good being sought by the industry into an aggregation of divis­ ible private goods that it alone provides to individual producers.17 These designs enhance the government’s power over market actors in several ways. They make industry members directly dependent on the gov­ ernment for their continued economic viability. They also enhance the gov­ ernment’s discretionary powers over individual industry members by giving it a monopoly over the licenses and quotas that are now necessary “inputs” in the production process. Both enable the government to build political clienteles among this producer group by targeting discrete and tangible benefits—say larger production quotas—to individual producers in return for political loyalty, as well as to punish those individuals that might dissent from its policies either by reducing the quotas they hold or by excluding them from the market altogether. In this way, the government can attach real economic costs and benefits to the political behavior of individual members in this industry, which, in turn, enables it to demobilize any potential collective political dissent that might emerge as a consequence of the boycott. As Mark Lichbach writes in his study of collective dissent, “the financial opportunity costs of protest and rebellion are related to the extent of the rebels’ economic dependence on authorities. The greater the eco-

Collective Action Dilemmas and Institutional Change

27

nomic pressure that can be brought to bear on dissidents, the greater their opportunity costs and, hence, the less their dissent.”18 In essence, rather than provoke producers of the export good into strong, organized, and sustained opposition of the target government or its policies, a boycott of the target country’s exports appears more likely to have the opposite effect. No government is likely to be responsive to a dis­ tressed industry that actively opposes it. As a consequence, exporters must essentially choose between opposing the government, and thereby suffer­ ing the full brunt of sanctions, or currying favor with the government to create the institutions necessary to recoup their windfall losses. And, because the government can design the institutions it supplies to the indus­ try in ways that reward political loyalty and punish dissent, the govern­ ment can exploit the industry’s need for an institution to capture its polit­ ical loyalty over time. It can do so because the capabilities needed by the export industry to ensure successful collusion to recoup the windfall losses from sanctions—an agency with the ability to monitor and coerce the behavior of individual producers—are exactly the same capabilities that can be exploited by the target government to control this group's political behavior. Thus, the new institutional structure of the market creates a pat­ tern of government-industry interaction in which subsequent political demands that emerge from this industry are likely to be narrowly defined, self-limiting, and explicitly couched in terms that express the industry’s continuing fealty to the government, for only “loyal” demands that openly renounce challenges to the government are likely to avoid retaliation.19 Sanctions against the target country’s exports appear less likely to gener­ ate domestic political opposition among the export industry than to cause the industry’s quiescence and perhaps even vocal support for the target government and its policies. Case 2: Sanctions against a Small Country's Imports

How does the analysis change when the sanction is an embargo of the tar­ get country? Figure 2 is a back-to-back partial equilibrium model depict­ ing the effects an embargo of the targeted country’s imported good. Because the target country’s autarky price for this good, Pa, lies above the world price, Pw, this country imports this good from world markets. The target country’s market for imports is given in the left-hand panel, in which the demand for imports is given by the downward sloping D' sched­ ule, while the supply of imports is the world price line Pw. At free trade, the country imports OM of the good. The domestic market for this good is depicted in the right-hand panel, with domestic supply and demand given by the schedules S and D respectively. At free trade, domestic prices equal

28

Manipulating the Market PRICE

Fig. 2. An import sanction

the world price Pw. The country produces OE of the good, while consum­ ing OH. The excess of consumption over production, EH, is imported from world markets and equals OM in the left-hand panel. The economic effects of an embargo of the target country’s imports are symmetrical to the effects of a boycott of its exports. First, the embargo kinks the foreign supply curve by segregating foreign suppliers of this good into two groups: suppliers over the range M'M participate in the embargo and will not supply this good at any price; suppliers over the range OAT do not participate in the embargo and will supply this good at price Pw or higher.20 The sanctions-distorted supply schedule is horizontal at Pw over the range of nonparticipating suppliers DA/'and turns vertical at Aí'. This reduces the target country’s imports from OM to OAT and cre­ ates a domestic shortage that propels their price upward to Ps. The right-hand panel shows the domestic consequences of this shock from the international economy. Domestic production rises from OE to OF while domestic consumption falls from OH to OG. Like a boycott, the embargo imposes deadweight welfare costs and windfall transfers. Total deadweight costs are depicted by Ct in the left-hand panel and consist of the sum of lost consumer surplus (C2) and the opportunity costs of secur­ ing output EF from domestic sources rather than trade (Ç), which are given in the right-hand panel. Area W2 is the windfall captured by import­

Collective Action Dilemmas and Institutional Change

29

competing producers who raise both prices and output behind the protec­ tive barriers erected by sanctions. Area FFj is the windfall captured by for­ eign suppliers who still trade with this market. Domestic consumers respond to the growing shortage of imports by bidding prices above world levels, generating a windfall for the remaining foreign suppliers, who reap the difference between the good’s higher domestic price Ps and its price on world markets, which remains Pw. Like an export boycott, the total losses to the target economy are the sum of the deadweight welfare costs plus the windfall captured by foreign suppliers who do not participate in the sanc­ tions (Cz + JFj). The losses to the target country’s importers are much greater, consisting of the total sum of deadweight costs and windfall trans­ fers (C, + Wx + fr2).

Import Embargoes and the Demandfor Institutional Change Given the symmetry between the economic effects of export boycotts and import embargoes, it is not surprising that import embargoes also gener­ ate a demand for government intervention. As consumers bid up prices for goods made scarce by the embargo, they generate a windfall for those for­ eign and domestic producers who still supply these goods. Again, this con­ fronts consumers with a substantial collective action dilemma. Although it is in the public interest of consumers as a group to refrain from competi­ tive behavior, it is in the private interest of individual consumers to mar­ ginally outbid the prices of other consumers and so ensure their own access to goods made scarce by the embargo. Because voluntary efforts to over­ come this dilemma are likely to fail, the desire to reverse the windfall losses from the boycott generates among consumers the demand for an institu­ tion that can compel them to act in the public interest. This institution must perform two functions. First, because a consumer price lower than the level set by the unconstrained operation of the market creates excess demand for this good, the institution must be capable of controlling the consumption and prices paid by individual consumers to ensure that each acts in the collective interest. Second, the institution must be able to cred­ ibly punish those individuals who seek to expand their own consumption by offering higher prices for the good. Import Embargoes and Institutional Supply Like export boycotts, import embargoes thus generate societal demands for government intervention. What are the government’s incentives to be responsive to these demands? Interestingly, the potential for import sanc­ tions to generate intense and organized political dissent appears in most cases to be much less than is the case for equally damaging export boy­

30

Manipulating the Market

cotts.21 First, because consumers generalize their consumption across a basket of goods, an import embargo is likely to affect only a portion of their income, thereby weakening the intensity of their preferences for poli­ cies that reverse these losses. Second, consumers also tend to be broadly dispersed across the economy. Both imply that consumers will be difficult to organize politically. Third, import sanctions clearly benefit one concen­ trated group of economic actors—import-competing producers—creating a potential “natural ally”of the target government. These factors do not mean, however, that target governments will be indifferent or unresponsive to import embargoes. First, by dispersing costs broadly across the economy, import sanctions create the potential for widespread, albeit unorganized, disaffection with the government. This can erode the government’s popular support, thereby increasing its vul­ nerability to potential challengers. This will be especially true where the embargo is on goods for which domestic demand is highly inelastic, such as oil or staple foodstuffs. Moreover, even though political entrepreneurs will find it difficult to organize consumers directly, they may still be able to link widespread economic discontent to other issues on which they can organize challenges to the government. Both create incentives for the tar­ get government to minimize political disaffection by minimizing the wind­ fall costs of the embargo to consumers. Finally, the fact that import-com­ peting producers benefit from sanctions does not mean they will be loyal to the government. Their windfall is an unintended consequence of the embargo that they capture regardless of their political inclinations, mak­ ing them akin to a fair-weather friend who is willing to benefit from the government’s blunders, but whose ultimate allegiance is uncertain. The mere fact that producers in this industry benefit from sanctions is cold comfort to a government facing concerted international economic and political pressure. Thus, like export sanctions, import sanctions confront the target government with the need to prevent political entrepreneurs from using the economic and political disaffection created by sanctions as a basis from which to mount an organized challenge to the government or its policies. As with an export boycott, the government can exploit the (some­ times latent) demand for an institution that lowers consumer prices to both coopt and suppress any potential political dissent generated by the embargo. First, to recapture the windfall that flows abroad, the govern­ ment must create an institution that faces foreign exporters as a single buyer and so sets prices at which imports are allowed into the economy. This structure makes the government-sponsored institution a monopoly supplier of imports to domestic consumers and gives it considerable dis­ cretion over how to distribute imports among individual users. Where

Collective Action Dilemmas and Institutional Change

31

consumers are politically powerful, the government may set the price of imports below market clearing levels and then ration the good among competing users. Alternatively, if consumers are politically weak, the gov­ ernment may simply auction the good among competing domestic users. This raises the internal price of the good to Ps and generates an adminis­ trative rent (the area W\) that the government can then redistribute to those it favors. The government may also build clienteles by licensing the distribution of scarce imports to important domestic actors, enabling them to capture the (foreign) windfall generated by sanctions, thereby creating a group whose prosperity depends directly upon their loyalty to the gov­ ernment. In each instance, the government can use its monopoly position over imports to reward friends, punish opponents, and thus create net­ works of political loyalty. Moreover, because consumers tend to be dis­ persed broadly across the economy—residing in different geographic regions and belonging to different social and producer groups—the gov­ ernment can build its networks of support in ways that cut across these other types of social and political cleavage and so prevent political entre­ preneurs from using them as a basis from which to organize challenges to the government. Second, to recapture the windfall that flows to domestic producers, the government must introduce and enforce price controls that prevent domestic producers from responding to the embargo by raising prices. Laws against price gouging or profiteering serve two purposes. They benefit consumers by minimizing the windfall losses from the embargo. They also give the government the power to grant individual firms excep­ tions to these rules and hence the discretion to determine which firms benefit from the embargo and which do not. Consequently, an import­ competing firm’s ability to benefit from the embargo is no longer deter­ mined by its market position, but by the government, a fact that encour­ ages its political loyalty to the regime. It is important to realize that these efforts to reorganize the import­ competing industry are most likely to succeed in the period immediately following the imposition of sanctions. This is the period in which import­ competing producers are unlikely to have fully recognized the true extent of their windfall gains, as well as the period when the costs imposed on domestic consumers are likely to be highest.22 Not only does this timing mean that producers will offer the least resistance, and consumers the most support, for “populist” policies to reorganize this market, it also cre­ ates the opportunity for the government to build a political coalition that encompasses both of these economic interests even though they are nor­ mally in direct and zero-sum conflict. Simply put, so long as it allows import-competing producers to realize some of the windfall gains from

32

Manipulating the Market

sanctions, the government raises producer prices above pre-sanctions lev­ els without imposing any clear costs on this group. Yet, at the same time, by using intervention to limit the extent to which import-competing pro­ ducers reap windfalls from sanctions, the government also lowers postsanctions prices to consumers. In this way, the government can create a social compromise that pulls both sides of this market into its governing coalition.23 Moreover, because it rests on a set of government institutions or agencies that can determine the economic fate of individual actors in this market—whether producers or consumers—this encompassing coalition between conflicting economic interests will be highly durable. Both sides possess strong disincentives that discourage opposition to the government. Producers that oppose the government risk further restrictions on their economic activity or even exclusion from the market, while consumers risk losing the benefits of government intervention and being exposed to the free play of market forces. As a result, the target government can not only capture the political loyalty of both economic winners and losers from the embargo, it can also render the polity almost impervious to organized attempts at political opposition by narrowing dramatically the political space in which political entrepreneurs can challenge the government. Thus, import embargoes, like export boycotts, appear unlikely to undermine the target government or its policies. By generating the latent demand for government intervention to control consumer prices and thereby cushion the shock of sanctions, import sanctions also enable the government to reorganize this market in ways that consolidate its political control over domestic society. And, like export sanctions, the capabilities needed by the government to control consumer prices in the face of import sanctions—a government monopoly over imports, the ability to regulate the production and prices of import-competing producers—also enable the government to ensure the political loyalty of actors in this market.

Three General Propositions about Economic Sanctions

In sum, this analysis suggests that economic sanctions can exert a pro­ found influence over the structure and content of the target country’s domestic politics. We can express these consequences in terms of three general propositions about the expected domestic political-economic impact of sanctions: 1. Economic sanctions will create significant collective action dilem­ mas for the groups who suffer windfall losses, thereby generating

Collective Action Dilemmas and Institutional Change

33

the (sometimes latent) political demand for new institutions that resolve these dilemmas by using the power of the state to compel individuals to act in the collective economic interest. 2. These institutions will enhance the power of the government over market actors because the very same institutional capabilities mar­ ket actors need to overcome their collective action dilemmas—the power of the state to monitor and coerce their individual behav­ ior—can also be exploited by the government to suppress political dissent and reward political loyalty among this group. 3. Given the strong economic incentives for societal groups to demand state intervention as well as the strong political incentives for the government to supply it, economic sanctions will lead to the increasing penetration of the economy by government agen­ cies, the submersion of domestic political dissent, a narrowing of the political space within which opponents can mount challenges to the government or its policies, and the apparent closing of loyal ranks behind the target government.

The theory is in hand. It is time to query the evidence.

Appendix: Sanctions against a Large Country's Exports Economic sanctions are sometimes applied against countries that are large on world markets. Libya and Iraq, for example, are major oil producers; Rhodesia accounted for a quarter of tobacco exports on world markets. Figure 3 depicts an economic sanction against a large country’s exports. The right-hand panel depicts the domestic market for the exported good, with domestic supply and demand schedules given by 5 and D respec­ tively. The left-hand panel represents the target country’s world market for exports. The target country’s export supply schedule, S', traces out the differences between the domestic supply and demand schedules in the right-hand panel. World demand for the country’s exports is given by the downward sloping schedule D'. Thus, shifts in this country’s export supply schedule affect not only the quantity of exports reaching world markets but also the world price, Pw, which is determined by the intersection of the two curves. At Pw the country exports OX to world markets, which equals EH in the right-hand panel. Again, an economic boycott segregates foreign importers into two

34

Manipulating the Market

EXPORTS

X

X'

EXPORT MARKET

O

E

F

.TOTAL QUANTITY

DOMESTIC MARKET

Fig 3. An export sanction: the large country case

groups: those participating in the sanctions and those that are not. The effect is to kink the demand for this country’s exports. It will slope down­ ward over the range of importers still trading with this country OX', then turn straight downward at X'. The effects are twofold: first, sanctions cre­ ate a shortage of the exported good on world markets, thus driving the world price upward to P*; second, domestic exporters perceive sanctions as a drop in world demand and respond by lowering production to OG and prices to Ps. Comparing the right-hand panel with that of figure 2 reveals that the domestic distributional consequences of this sanction are identical to those of a sanction against a small country’s exports. The total deadweight costs are depicted by Ct in the left-hand panel, which is the sum of Cx and C2 in the right-hand panel. Windfalls are depicted by the areas Wx, the windfall captured by those foreign importers who still trade with the target econ­ omy, and PK2, the windfall gained by domestic consumers. In fact, the only differences between the large and small country cases concern world mar­ kets. First, sanctions create an area Cjwhich is the deadweight welfare cost to foreign consumers of the sanctions, and second, they create an area W3 which is an additional windfall that is captured by the foreign importers who do not participate in the boycott. These importers can buy the target

Collective Action Dilemmas and Institutional Change

35

country’s exports at the sanctioned depressed price Ps while its world price has risen to P *. These differences raise two issues. The first is that the additional windfall generated by sanctions makes reorganizing the export market even more lucrative for domestic exporters and the target government. In fact, if the recaptured windfall, exceeds the deadweight welfare costs of the sanction to the target economy, Cp the sanctions will be welfare­ improving for the target country. The second issue raised is whether this market will have been orga­ nized prior to sanctions. Because this is the large country case, this coun­ try can at any time raise the price of exports to foreign consumers by restricting the quantity reaching world markets. Whether or not this mar­ ket will be organized cannot be asserted a priori. For example, even though Rhodesia accounted for one-fourth of world exports, its tobacco growers rejected proposals to raise prices by limiting exports on grounds that any windfall would be short-lived as higher prices would induce new entrants into the market. Robert Bates has likewise shown in his study of the world coffee trade that the ability of large countries to exercise power on world markets can vary considerably over time and is a question not simply of a country’s potential market power, but the position of its pro­ ducers within the domestic political system.24 Where this market has already been organized prior to sanctions, any additional windfall will be readily captured by whatever agency is used to control the flow of domes­ tic exports to world markets. In addition, because this agency determines which producers’ products reach world markets, the sanctions-induced shortfall in demand will increase the domestic political leverage of this agency. Where this market has not been previously organized, the shock of sanctions will create both the societal demand for and governmental sup­ ply of institutions that do so.

CHAPTER 3

Prelude to Sanctions: The Polarization of Rhodesian Politics

Economic sanctions against Rhodesia arose from a dispute over the terms by which that colony would gain formal independence from Great Britain. In 1960, Britain concluded that the Central African Federation of Rhode­ sia, Northern Rhodesia, and Nyasaland was no longer viable and that each member colony would be granted independence separately.1 More­ over, as Prime Minister Harold MacMillian signaled in his famous 1960 “wind of change” speech in Cape Town, Britain sought to transfer politi­ cal power not to the settler interests that had become established under colonial rule, but rather to the African nationalist movements. “The wind of change,” stated MacMillian, “is blowing through the continent. Whether we like it or not, this growth of national consciousness is a polit­ ical fact. We must accept it as a fact. Our national policies must take account of it.”2 Rhodesia, however, presented two significant problems for British policy. The first was that Rhodesia’s settler population was significantly larger than that of any other African colony. From the earliest days, immi­ grants had come to Rhodesia on the understanding that the colony was to be a center of European development in Africa. Many had invested con­ siderable fortunes in the colony and depended on the further development of the European sectors of the Rhodesian economy for their continued prosperity.3 Unlike the white farmers of the Kenyan highlands, who were few enough to be essentially bought out by Britain, Rhodesia’s settler pop­ ulation was too numerous and too deeply committed to the colony to be moved. The second and more important problem was that Britain had never actually exercised its formal legal authority over the colony. Rhodesia had originally been administered by the British South Africa Company (BSAC), and when company rule ended in 1923, the colony was granted limited self-government by Britain. Although Britain reserved for itself exclusive legal authority over a number of issues, in particular the right to decide any legislation that affected relations between the races, this 36

Prelude to Sanctions

37

authority was never formally used. Britain treated Rhodesia’s (white) leg­ islature as the sole rightful body to initiate laws. On some issues, such as the rights of Africans to purchase land, Britain amended the laws govern­ ing the colony to grant legislative authority to the local legislature. On other issues, legislation was worked out in advance between Rhodesian and British authorities so that Britain’s reserve powers were never publicly tested. As a result, it appeared to most observers that Britain exercised authority over Rhodesian affairs in name only.4 These two factors profoundly shaped the subsequent conflict over independence. The first meant that the terms of Rhodesian independence would need to be negotiated with a white settler community that was adamantly opposed to the immediate transfer of political power to Rhode­ sia’s African nationalists. The second meant that Britain’s bargaining position was inherently weak. According to Sir Michael Palliser, former head of the British Foreign office: Rhodesia was not a colony in the standard sense. We had in fact given a measure of independence to the Rhodesian whites, years before, which could not be clawed back. This was, I suppose, the reason— going right back to the original declaration of independence—why we did not send in troops. I mean, that we did not actually have a colo­ nized presence in Rhodesia. The Rhodesian whites ran themselves.5

The weakness of Britain’s position was clearly recognized by Rhode­ sia. As Sir Roy Welensky, a Rhodesian politician and former prime minis­ ter of the Central African Federation, wryly noted (in 1967): “The British government has never had the power unless they were prepared to use the sword. They have never had the power to force anything on Rhodesia.”6 Britain’s strategy for overcoming these obstacles was to require Rhodesia, as a condition for independence, to write into its constitution a number of entrenched clauses that would widen over time the Rhodesian franchise by including progressive numbers of black voters. In this way, Britain could argue that independence would lead to eventual majority rule in Rhodesia, even if majority rule was not an immediate consequence of independence. This strategy, moreover, initially appeared to have a good chance of succeeding. Britain’s goal of unimpeded progress to major­ ity rule overlapped substantially with the interests of Rhodesia’s ruling cir­ cle prior to 1962. The Rhodesian government of the time was closely tied to the colony’s traditional business establishment consisting of Rhodesia’s large mining, financial, and commercial interests. Both government and the business establishment were committed to the economic and political development of Rhodesia, and both believed that attaining these goals

38

Manipulating the Market

required not only the expansion of economic opportunities for the colony’s black populace, but their eventual incorporation into Rhodesia’s political system. Moreover, despite the ouster of prime minister Garfield Todd in 1958, in part for pushing liberalization too fast, the momentum behind liberaliz­ ing the colony’s racial institutions appeared to many to be unstoppable. In 1957, Todd’s government broadened the franchise specifically to include more blacks by creating a second roll of voters with lower economic and educational thresholds.7 Also that year, an official inquiry known as the Plewman Commission recommended overhauling the Land Apportion­ ment Act, the central pillar of Rhodesia’s race relations.8 Three years later, the Quinton Commission recommended abolishing it entirely.9 In 1961, the Rhodesian electorate approved by a margin of two to one a new con­ stitution jointly negotiated by Britain, the Rhodesian government, and the nationalist National Democratic party (NDP) represented by Joshua Nkomo and Ndabaningi Sithole. The 1961 constitution not only retained an expanded “B-roll” of electors with lower economic and educational qualifications, it also ensured that blacks would sit in parliament by creat­ ing 15 new seats to represent the newly created, mostly black B-roll voter districts. In short, the years between the mid-1950s and 1962 had been a liber­ alizing era in Rhodesian politics in which the colony’s racial laws moved in a direction opposite to those of neighboring South Africa. Whereas this period marked the codification of apartheid in South Africa, Rhodesia’s racial politics were marked by efforts to expand black participation in Rhodesia’s economic and political life. As Frank Clements, mayor of Sal­ isbury during the early 1960s, writes, “Living at the time in Rhodesia, it seemed that an irreversible choice had been made to alter the patterns of behavior and the whole structure of Rhodesian society.”10 Yet Rhodesia abruptly ended its era of racial liberalization in 1962 by electing the racially conservative Rhodesian Front to power. This election narrowed dramatically the range of conditions under which independence would be acceptable to both the Rhodesian and British governments. Whereas the British government sought unimpeded progress to majority rule in the colony, the Rhodesian Front government wanted the ability to control, halt, and even reverse the pace of black economic and political advancement. In the end, finding common ground between these positions was to prove impossible. On November 11, 1965, the Rhodesian Front declared the colony independent of Britain. Intended to entrench white minority rule in the colony, UDI instead triggered an escalating series of economic sanctions against the colony and ultimately sparked a bitter civil war with Rhodesia’s African nationalists.

Prelude to Sanctions

39

A number of writers have argued that Rhodesia’s ultimate rejection of racial liberalization, and its later ability to withstand economic sanc­ tions, can be traced to an “inner law” of Rhodesian politics that sought to preserve white privilege at all costs.11 Although compelling, in part because race was a factor in Rhodesian politics, this explanation is also too simple. It overlooks the apparent anomaly that in a national referendum in July 1961, two-thirds of the electorate voted in favor of a new constitu­ tion that not only ensured that blacks would be seated in Rhodesia’s par­ liament, but also meant that blacks would assume an ever greater role in governing the colony’s political life.12 It also overlooks the significant divi­ sions within white society over racial matters as well as the complex ways in which economic interests interacted with race in Rhodesian politics.13 The polarization of Rhodesian politics over racial issues did not result from an inexorable need to protect white privilege at all costs, but rather from the political struggles of the colony’s major politicians—both white and black—as they sought to lay the foundations for sustained political power in the period after independence.

Rhodesian Politics to 1962

By the early 1960s, the United Federal party (UFP)—earlier called the United party—had governed Rhodesia for nearly thirty years.14 The party first came to power in 1933 under the leadership of Godfrey Huggins (later Lord Malvern) who then served as Rhodesia’s prime minister for the next two decades. Under Huggins, the party used the successive economic shocks of the Great Depression and World War II to increase both the administrative capacity of the government as well as the party’s political control over major sectors of the economy. Using the government’s dis­ cretionary powers, the party built networks of political patronage among the colony’s major economic interests. For example, the Industrial Devel­ opment Commission was a major source of grants and loans to Rhodesian industry, while the Mining Board controlled the allocation of equipment to the mines.15 Most significant, however, was the party’s use of the representative associations of the economy’s major organized interests, such as the Cham­ ber of Mines, the Association of Rhodesian Industries (ARnI), or the Rhodesian National Farmers’ Union (RNFU), as major conduits for chan­ neling patronage to key constituents and organizing political support. As David Murray notes, the process of governing became “a cooperative ven­ ture between the government and these other [representative economic] associations: each had a pattern of relationships providing access to the

40

Manipulating the Market

power of the other.... It is frequently difficult to describe precisely where government as an institution ceases, but this was peculiarly difficult under the general governmental system built up in the 1930s.”16 In fact, the party’s grip on political power and its penetration of the Rhodesian econ­ omy seemed so pervasive that it was often referred to simply as the Gov­ ernment party or (in less charitable moments) as the “Hugginsbureau.” Several important consequences followed from this structure of rela­ tions between government, party, and the economy’s organized interests. The first was that government policy reflected most directly the interests of the leadership of the colony’s economic associations and, especially after Rhodesia’s industrial and commercial development took off after World War II, the interests of industry and commerce. Second, because the party exercised patronage primarily through the economic associations, the UFP failed to develop a strong organization that directly linked the party to voters and was independent of the govern­ ment’s links with the representative economic associations. One implica­ tion was that Rhodesia never developed a tradition of party politics in which political parties actively sought to organize and sustain support among large portions of the electorate. For most of the UFP era, chal­ lenging parties came into and out of existence to contest elections but, like the UFP, never developed enduring links with the electorate directly. Even more important, the absence of a strong party organization independent of the government made the UFP extremely vulnerable should it ever lose power, as depriving the party of office would also deprive it of the ability to sustain and mobilize voter support. After the election victory of the Rhodesian Front in 1962, this weakness would prove critical. Finally, by exercising government policy and political patronage through the representative associations, the UFP over time coopted these organizations into becoming largely instruments of government (and party) policy rather than acting as autonomous representatives of the colony’s economic interest groups.17 This gave Rhodesian politics a topdown character in which policy was simply negotiated among government and economic elites, effectively divorcing the party from the mass of the electorate. As Murray notes, this structure meant that “a large body of Europeans, in whatever role they were acting, lacked an effective means of communication, and the government, for its part was misled into thinking that the willing acquiescence of leading individuals in representative asso­ ciations indicated widespread support for [government policy].”18 As a consequence, the party was poorly situated to respond to the tremendous social changes that began to occur in Rhodesia from the 1950s onward. The years after World War II marked a time of rapid economic growth and profound social change in Rhodesia. A shortage of dollars forced

Prelude to Sanctions

41

Britain’s tobacco merchants to turn to Rhodesia as a primary source of leaf, sparking a boom in that agricultural sector.19 Manufacturing and commerce also took off, the result of both the substantial investment in these sectors during the war and the expanded market opportunities for Rhodesian manufacturers created by the merger in 1953 of Rhodesia, Northern Rhodesia, and Nyasaland into the Central African Federation. The gains of these sectors were so dramatic that commerce and manufac­ turing soon rivaled agriculture as contributors to the colony’s GDP. Commerce and industry also began to push agriculture aside as the dominant force in Rhodesian politics. This was due both to the increasing economic weight of these sectors as well as to the relative decline of agri­ culture’s electoral importance. In 1921, farmers comprised over one-quar­ ter of Rhodesia’s working population. Yet by 1956 their share of the work­ ing population had slid to approximately one-twentieth, even though the actual number of farmers in Rhodesia had remained roughly constant.20 Thus, despite the fact that Rhodesia’s political institutions were biased in favor of rural interests, and farmers had long dominated Rhodesian poli­ tics, by the 1950s government policy began to favor instead the economic interests of commerce and industry.21 These interests centered around the desire to make the commercial and industrial sectors the centerpieces of the Rhodesian economy. Com­ merce and industry perceived a number of significant obstacles to their continued development. Bottlenecks in the supply of the white work force, the transient nature of the black labor pool, and racial laws that severely restricted the range of jobs in which blacks could legally be employed all combined to push up labor costs and increase competitive pressures. Moreover, even with the expanded markets created by Federation, the level of white economic demand alone was too thin to support a strong indigenous industrial sector. As a result, commerce and industry began to view Rhodesia’s network of racial laws, which largely protected white workers and white agriculture from black competition, as the major obsta­ cle to the country’s future prosperity. The Rhodesian government responded to these concerns by pursuing policies designed to create a stable, black urban work force and expand black purchasing power. In 1946, for example, it enacted the Native (Urban Areas) Accommodation and Registration Act, which created black advisory boards to provide blacks with some voice in local affairs in the black urban districts and a means to organize politically. The act also sought to raise the real level of black wages by forcing employers to pay workers’ rents.22 In 1947, the government passed the Native Labour Boards Act, which sought to improve working conditions for black labor, prevent industrial unrest, and settle disputes.23 These efforts accelerated

42

Manipulating the Market

though the 1950s under Huggins’s policy of “partnership,” which sought to promote the economic development of both races. However, the government’s efforts to stabilize the black work force and expand black purchasing power contradicted directly the economic interests of both white agriculture and white labor. Creating a stable, wellpaid pool of urban black labor would not only raise costs for white farm­ ers who depended heavily upon low-cost seasonal labor to work the fields, it would also undercut the wages of Rhodesia’s highly paid white workers who relied upon very restrictive labor laws to exclude blacks from skilled positions in the industrial sector. As a result, the economic pressures to dismantle Rhodesia’s racial laws, as well as the government’s willingness to accommodate these pressures, created among many of the colony’s whites a sense of increasing economic competition with the black majority. This economic uneasiness was exacerbated by the increasingly vocal demands that began emanating from Rhodesia’s blacks. The high demand for industrial labor created opportunities for urban blacks to undertake effective industrial action. In 1945, a railway strike in Bulawayo demon­ strated that blacks were capable of collective action. It was followed in 1948 by another, more general strike in Bulawayo that prompted the gov­ ernment to appoint a commission of inquiry into black grievances, many of whose recommendations became incorporated into urban policy.24 These efforts by urban blacks to organize and pursue collective interests mark the origins of Rhodesia’s nationalist movement. Black urban grievances also resonated in the rural reserves. One con­ sequence of the Land Apportionment Act had been to squeeze increasing numbers of black peasants onto the reserves, where overcrowding and soil depletion had caused African agricultural production to stagnate. Gov­ ernment policies to rectify these problems, moreover, only served to raise rural tensions. Efforts to destock cattle entailed the destruction of a key form of wealth for rural blacks, while efforts to create private, freehold tenure in land undermined the traditional authority of chiefs by under­ mining their ability to allocate land.25 Moreover, most urban blacks remained tied to the reserves, as urban conditions and government policy discouraged the migration of families to the urban areas. In this way, urban grievances became directly tied to the structure of land rights as the major impetus fueling the nationalist movement.26 Thus, the 1950s marked not only a period of social and economic change, they also marked a period of increasing instability in Rhodesian politics. The shifting structure of the Rhodesian economy toward com­ merce and industry generated strong economic and political pressures to dismantle the colony’s racial laws. Yet the government’s efforts to accom­

Prelude to Sanctions

43

modate these pressures only increased the economic anxiety of other groups in white society—in particular, white farmers and white workers. Moreover, this eroding political stability in the white electorate was intensified by two further factors. The first was an influx between 1951 and 1958 of 92,000 white immigrants, many of whom were “refugees” from British decolonizations elsewhere, that doubled the size of Rhodesia’s white community.27 The second was the absence of meaningful party com­ petition, which meant not only that these new arrivals were not well inte­ grated into the Rhodesian polity, but that earnest debates about the course and future of Rhodesian politics did not take place. As a result, the decade witnessed a progressive distancing between the policies of the UFP gov­ ernment and a substantial portion of the electorate. Moreover, Rhodesia’s blacks were gaining a political voice and demanding greater participation in the colony’s economic and political life. Initially founded upon urban demands for higher pay and better liv­ ing and working conditions, the nationalist movement quickly became tied to rural grievances over the structure of land rights and government policies toward peasant producers. By linking urban to rural grievances, black nationalists not only gained a stronger, more unified voice, they also increased anxiety among a significant portion of whites about the nature of the nationalist challenge to the existing political order. Looking both at home and elsewhere in Africa, these whites began to evince a growing con­ cern about the more general challenge posed by African nationalism to their continued prosperity and personal safety.28 By the mid-1950s, these growing tensions in Rhodesian society mani­ fested themselves in the emergence of two political organizations. The first was the white Dominion party founded in 1956. A precursor to the Rhode­ sian Front, this party sought to capitalize upon growing discontent among many whites over the UFP’s policies of economic partnership. The party drew support from all elements of the white electorate dissatisfied with the UFP, in particular white labor and farming circles, but offered no coher­ ent platform aside from opposition.29 For example, prominent members of the Dominion party ranged from Ahm Palley, a leftist South African émigré who wanted to create a nonracial, class-based movement in Rhode­ sian politics, to William Harper, a politically ambitious member of a prominent family of Calcutta merchants who was deeply embittered by the British withdrawal from India and firmly committed to maintaining white political control of Rhodesia.30 The party eschewed organizing sup­ port through the economic associations, but, foreshadowing the later emergence of the Rhodesian Front, sought to organize the electorate directly at the grassroots level.

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Manipulating the Market

The second major political organization to emerge from these grow­ ing tensions in Rhodesian politics was the (rejuvenated) African National Congress (ANC). In 1957, the existing but very weak African National Congress was merged with the City Youth League to gain a more effective political voice. Under the leadership of Joshua Nkomo, former general secretary of the Rhodesia Railways African Employees Association, the new ANC transformed the nationalist movement. Whereas African polit­ ical demands had previously been articulated and pursued mostly by Rhodesia’s black elite—semiskilled workers, educators, clerks, and administrators in the African areas—the ANC now mobilized mass protests to place its demands on the political agenda.31 At first, the ANC’s demands were simply for greater access to the existing political system and sought not to challenge directly the white elite and its control over the colony’s political institutions. Moreover, it appeared that these demands could be readily accommodated by the UFP’s politics of partnership and steady black political and economic advancement. For example, the Congress’s original statement of Princi­ ples and Policies read:

Its [the ANC’s] aim is the national unity of all the inhabitants of the country in true partnership, regardless of race, colour or creed. It stands for a completely integrated society; equality of opportunity in every sphere; and the social, economic and political advancement of all. It regards these objectives as the essential foundation of partner­ ship between people of all races, without which there can be no peace­ ful progress in this country.32 As time passed, however, nationalist pressure increased to demanding a deciding role in the colony’s politics. A number of factors led to this shift: frustration over the slow pace of change in Rhodesia, especially when compared to the advances of nationalist movements elsewhere in Africa; the increasingly repressive responses of the UFP government to nationalist agitation; pressure from external supporters of the Rhodesian nationalists not to compromise the goal of majority rule; and by the early 1960s, the belief that Britain could be brought into the conflict on the nationalist side to impose a majoritarian solution on the colony.33 The UFP responded to these growing rifts in Rhodesian politics by pursuing a political and electoral strategy designed to fortify the moderate center of the political spectrum. In 1957, the Rhodesian government altered both the Rhodesian franchise and the rules governing the election of parliament. First, the government expanded the franchise by creating a B-roll of voters with lower educational and property requirements. The

Prelude to Sanctions

45

government estimated this would add up to 8,000 black voters to the elec­ torate rolls and thus serve as a counterweight to the Dominion party.34 Second, the electoral law was changed to ensure that all successful candidates for office received a majority of votes cast. Voters were required to express both first and second preferences on the ballot. If the first count did not produce a clear majority winner, a second count was done. It tallied the second preferences of all those who had voted for the least successful candidate, transferring these votes to the more successful candidates.35 The assumption was that if the voter’s first preference was for a party on the extremes of the political spectrum, their second prefer­ ence would be for a more moderate party that encompassed a broader range of voters. In this way, the UFP sought to avoid a polarization of the electorate by transferring votes from the extremes of the political spectrum to the center, which would, not coincidentally, improve its own electoral fortunes as the party of moderation and compromise. The ouster of Garfield Todd in 1958 as prime minister of the UFP provided the first test of the new electoral system.36 The UFP chose Edgar Whitehead as Todd’s replacement and, when Whitehead failed to gain a seat in parliament in a by-election, called a general election. This election turned into a three-way contest between the UFP, the Dominion party and the liberal United Rhodesia party which had been newly organized by Garfield Todd. Todd’s new party split the UFP’s support, enabling the Dominion party to poll a plurality of first-preference votes. Yet the Dominion party failed to gain control of parliament, managing to capture only 13 of the 30 seats in parliament with the remaining 17 going to the UFP. The UFP won the election because it was the overwhelming second preference of all those who had voted for the losing United Rhodesia party under Todd.37 Thus, despite the erosion of support from portions of the white electorate, the UFP had built a winning coalition that rested on the support of three elements: moderate whites who accepted black advance­ ment as a necessary consequence of economic development but who wanted to manage the pace of that advance, liberal whites who were deeply committed to racial equality, and the newly enfranchised black vot­ ers seeking a greater economic and political voice in the colony.38 The general election of 1958 had a number of important implications that would govern the subsequent play of Rhodesian politics. For the UFP, the election signaled the deepening opposition among a substantial portion of the white electorate to the party’s liberal reforms. However, it also vindicated the UFP’s strategy of maintaining power by casting itself as the party of compromise39 as well as validated two important compo­ nents of that strategy: enfranchising growing numbers of black voters and using electoral laws to bolster the center of the political spectrum. Finally,

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Manipulating the Market

it was equally clear that the UFP would maintain power only so long as it continued to draw support from the colony’s moderate whites and the newly enfranchised blacks. These realizations shaped subsequent UFP policy. First, to maintain its coalition intact, the UFP needed both to retain the support of its mod­ erate white elements who wanted to manage the pace of black advance­ ment, as well as to ensure that black political demands did not challenge the party’s control of government but were instead channeled through the party. Both goals could be met by taking a hard Une against the organized African nationalists. Thus, in 1959, Whitehead declared a state of emer­ gency after nationalist demonstrations in Northern Rhodesia and Nyasaland spilled into Rhodesia, banned the ANC, and jailed 500 of its mem­ bers. That year the government also passed the Unlawful Organizations and Preventive Detentions Acts, followed in 1960 by the Law and Order Maintenance Act.40 These acts sought to cripple the ability of the nation­ alist movement to undertake effective collective action. For example, the Preventive Detention Act enabled the government to arrest and detain any person involved in the 1959 protests, even as a spectator. These actions decimated the organizational capacity of the ANC, dealing it a blow from which it never really recovered.41 Although some of the nationalists were to regroup to form the National Democratic party (NDP) in January 1960, this party never developed the ANC’s extensive links to the reserves, in part because the NDP concentrated its energies on attracting prominent members of the black urban elite such as Herbert Chitepo, the colony’s first African barrister, but mostly because of the severe restrictions on rural meetings set down by the government.42 In addition to disorganizing the nationalist movement, the UFP also sought to coopt it. The years between 1958 and 1962 became the great reforming years of Rhodesian political history, with the bulk of social and economic legislation designed to improve the economic standing of the colony’s blacks.43 When Rhodesia and Britain entered into constitutional talks to prepare the way for independence, nationalist leaders Joshua Nkomo and Ndabaningi Sithole were included in the negotiations that resulted in the 1961 constitution.44 In preparation for the 1962 elections, the first to be held under the new constitution, the UFP embarked upon the “Build-a-Nation” campaign that sought to register and mobilize the newly enfranchised black voters in support of the UFP and its policies of racial accommodation. The UFP confidently estimated that it would attract some 5,000 previously unregistered black A-roll voters as well as nearly 50,000 new black B-roll voters under the expanded B-roll fran­ chise.45 To further this end, the UFP also promised to repeal the Land Apportionment Act and step up the pace of racial liberalization.

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47

Finally, once it became clear Britain no longer desired its imperial role in Rhodesia, these domestic political considerations shaped the UFP’s endgame over independence. By capturing black support, the UFP hoped to gain a strong claim for independence on the basis of the 1961 constitu­ tion.46 Moreover, the UFP used Britain’s demand for guaranteed black economic and political advancement to embed its electoral strategy into the very structure of the colony’s most basic legal document. The 1961 constitution not only further extended the black franchise, it also expanded the legislature from 30 to 65 seats, with 15 seats being elected by the largely black B-roll voting districts. In all likelihood, these seats would go to supporters of the UFP party.47 In addition, a complex system of cross-voting meant that electors on each roll would influence outcomes in both the A-roll (mostly white) constituencies and B-roll (mostly black) dis­ tricts.48 As a result, B-roll votes (which would be most likely favor the UFP) would be able to influence outcomes in highly contested A-roll con­ stituencies. Finally, because changing the constitution required a twothirds majority of the legislature, this highly favorable set of electoral laws would likely become a durable feature of the Rhodesian political land­ scape. Thus, independence provided the opportunity for the UFP to consol­ idate its political power based on a strategy of multiracial politics and gradual black economic and political advancement at a pace controlled by the UFP. The July 1961 referendum, in which the electorate voted 41,949 in favor of the new constitution as opposed to 21,846 against, represents the high-water mark of the UFP’s multiracial strategy.49 Remarkably, this political achievement was to collapse a scant nine months later in the 1962 general election. The collapse of the UFP’s multiracial strategy can be traced to another set of “lessons” to be found in the 1958 election. Paradoxically, for both the supporters of the Dominion party (and later the Rhodesian Front) as well as Rhodesia’s African nationalists, the election of 1958 underscored the dangers of the UFP’s strategy of dominating the center. For supporters of the Dominion party, the election showed that they could be defeated by the UFP’s coalition of newly enfranchised blacks, lib­ eral whites committed to racial reform, and moderate whites willing to acquiesce in building a multiracial society. This point was driven home by the strong two-to-one vote in favor of the 1961 constitution. The second important lesson was that the UFP coalition was held together, not by a natural affinity of interests, but by the structure of the colony’s electoral institutions. The real danger of the 1961 constitution was not just that it facilitated black economic and political advancement, but that embedded within it was a set of electoral laws that could permanently lock the

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Manipulating the Market

Rhodesian right out of power. For example, assuming that the 15 B-roll district seats went either to the UFP or politicians who were sympathetic with its multiracial strategy, the UFP would need to capture only 18 of the 50 A-roll constituencies to maintain a majority in parliament. Although the Dominion party had diminished considerably in strength after the 1958 elections, it joined with other organizations—such as the United Group of Ian Smith and the Southern Rhodesia Association—to oppose the 1961 constitution.50 When that campaign failed, these groups merged under the leadership of Winston Field, a wealthy tobacco farmer, to con­ test the 1962 election as the Rhodesian Front.51 The Rhodesian Front sought to build an urban-rural coalition by joining those elements of white society most threatened by black economic and political advancement. Following the footsteps of the Dominion party, the RF built a strong party organization that brought together the colony’s white farmers with its white workers.52 To farmers, the RF promised to uphold the Land Apportionment Act, which sharply curtailed the ability of black peasants to compete with white farms; and to white workers fearful of black competition, the RF promised to end wage prac­ tices that allowed employers to hire cheaper black workers.53 Moreover, although the party had a few large backers, the bulk of its financing came in small sums from the rank and file who had been mobilized into the orga­ nization, making the RF the first opposition party to possess the finances necessary for challenging the government party.54 The RF also cast its net more broadly to the white electorate by mak­ ing race a central issue of the political contest. In particular, it played upon fears that the UFP had lost touch with the white electorate and had com­ mitted the colony to a course of racial change that was far too rapid. The RF exploited the images of the Mau Mau rebellion in Kenya and the civil chaos following the Belgian pullout from the Congo to emphasize the dan­ gers of losing white control. Closer to home, it pointed to nationalist vio­ lence against fellow blacks and nationalist attacks on European property to heighten white anxiety.55 The RF attacked the UFP relentlessly for its policies, creating a racially charged atmosphere in which, according to Clements, “the sheer weight of the RF private and public propaganda restored respectability to what had become an unwillingly admitted preju­ dice and which, to avoid the pejorative word, was described [by its holders] as a ‘preference.’”56 In the words of another observer, “The [RF’s] propa­ ganda was intense, ruthless, professional.”57 The RF’s answer to the UFP folly, of course, was to restore firm white control over the political process. In its statement of principles and policies, the party promised the electorate that it would seek to ensure both “that the Government of Southern Rhodesia will remain in responsi-

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49

ble hands” and “the permanent establishment of the European in South­ ern Rhodesia.”58 To this end, the RF also promised to rewrite the 1961 constitution, the primary vehicle of the UFP’s strategy of multiracial pol­ itics. According to its manifesto:

The Front recognises that inherent in the new Constitution is the intention to ensure the dominance by the African of the European before the former has acquired adequate knowledge and experience of democratic government. The front believes that this must be avoided. It will therefore seek ... amendments to the Constitution to avoid this situation arising.59

In short, the RF sought to wrest power from the UFP by mobilizing the white electorate against African economic and political advance. The success of this strategy, however, was determined not simply by the strug­ gles within the white electorate, but equally by the decision of the colony’s nationalist politicians in the aftermath of the 1958 election to renounce the UFP’s strategy of accommodation and compromise. For Rhodesia’s black nationalists, the 1958 election vividly demon­ strated the dangers of the UFP strategy. First, the ouster of Garfield Todd demonstrated that an extremely rapid extension of political rights to increasing numbers of blacks was opposed by many in the UFP who felt that substantial black economic development should precede entry into the political system. This would delay the onset of true majority rule and made the UFP a questionable vehicle for advancing nationalist interests, particularly when compared to the gains nationalist movements were making elsewhere in Africa. Even more important, the UFP’s desire to build a moderate, multira­ cial party occupying the center of the political spectrum threatened to lock the nationalists out of power as easily as it did Rhodesia’s right-wing whites. Blacks were assured of only 15 of 65 seats in parliament despite being an overwhelming majority of the population. Moreover, because the intent of the UFP was to organize the newly enfranchised blacks under its banner, these seats would most likely be occupied by members sympa­ thetic to the UFP. This fact was made dramatically apparent in the years immediately following the election. By relaxing Rhodesia’s racial laws and franchise requirements on the one hand, while employing repressive mea­ sures against autonomous black political organization on the other, the UFP sought simultaneously to coopt and cripple the nationalist move­ ment. For example, when the UFP amended the Industrial Conciliation Act in 1959 to broaden black membership in unions, it also mandated that unions were to organize vertically by industry, in part to prevent black

50

Manipulating the Market

workers from organizing into a single national organization.60 In Decem­ ber 1961, the UFP government banned the National Democratic party, the successor to the ANC. In September 1962, the government banned the NDP’s successor, the Zimbabwe African Peoples Union (ZAPU).61 Thus, although the UFP strategy of building a multiracial party in the center of Rhodesia’s political spectrum would have advanced black eco­ nomic and political interests, it also threatened to undercut the political power of the black nationalists. In fact, one of the primary reasons offered at the NDP congresses for rejecting the 1961 constitution was fear that the holders of the 15 B-roll seats would engage in multiracial politics.62 In other words, they would project the UFP agenda, not the nationalist one. As a consequence, although Nkomo and Sithole had helped negotiate the 1961 constitution as a preliminary vehicle for gaining Rhodesian independence, they soon renounced both the document and cooperation with the UFP. The nationalists responded to the UFP’s attempts to hobble the nationalist movement by radicalizing their demands and tactics. The NDP statement of objectives no longer embraced the ANC’s language of mul­ tiracial compromise, but instead explicitly called for “one man, one vote.”63 Echoing this theme, Nkomo declared that “one man, one vote could be achieved either by negotiation, by bringing about a complete eco­ nomic breakdown, or by bloody revolution.”64 In both cases, the message was clear: the NDP’s goal was majority rule. Tactically, the nationalists turned to violence as a means of building a cohesive and resilient organization in a very hostile political environment. The body of repressive legislation initiated by the UFP in 1959 sought to shatter the organizational capabilities of the nationalists by raising dra­ matically the costs of political protest. The nationalists responded to this challenge by using violence against fellow blacks as a way to mobilize and sustain support from sympathizers who otherwise might be reluctant to participate in the nationalist movement.65 They also used violence to intimidate potential supporters of the UFP’s strategy of multiracial com­ promise. UFP sympathizers were physically threatened and their dwellings often burned. Other symbols of government authority such as schools and local administrative offices were also sacked and destroyed. So pervasive was the threat of nationalist intimidation that the UFP was forced to hold its “Build-a-Nation” rallies unannounced for fear that NDP organizers might show up. By the end of 1962, out of an estimated pool of between 30,000 and 50,000 eligible blacks, only 10,632 had regis­ tered as voters under the B-roll franchise.66 But nationalist violence also served other ends. First, the upsurge of black violence in Rhodesia undercut the UFP’s claim that it could build a

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multiracial polity on the basis of moderation and compromise. This not only played directly into the hands of the RF, which argued that racial compromise was a dangerous strategy that would lead to civil chaos, it also undermined support for the UFP among moderate whites who were willing to gradually share economic and political power as a way to pro­ mote Rhodesia’s further development. Second, the nationalists used vio­ lence to dissuade further foreign investment in the colony and thus, it was hoped, weaken the economic basis of the white community. Finally, by polarizing the electorate along racial lines, the nationalists hoped both to forestall a British handover of political power to Rhodesia’s white com­ munity, as well as to force Britain to intervene directly in Rhodesian poli­ tics and impose a majority-rule political system on the colony. In short, the nationalists’ desire to build a strong organization from which to project and, it was hoped, attain political power also entailed the rejection of multiracial compromise. “Nationalism,” wrote one nationalist leader, “is basically emotional, and has to be to succeed. At times—partic­ ularly in the early years—it should be blind and blinkered if it is to estab­ lish its principles and begin to transform or reform a decadent society.”67 In sum, the period between the general elections of 1958 and 1962 saw the development of three distinct trends in the Rhodesian electorate. The UFP sought to cement its multiracial strategy as the basis for power in an independent Rhodesia. However, its attempts to do so threatened the political positions of the two extremes of the political spectrum: support­ ers of the white Dominion party (and later the Rhodesian Front), on the one end, and the black nationalists, on the other. Both extremes faced the very real prospect that the UFP could permanently exclude them from power in Rhodesian politics. For the white extreme, this meant they would be unable to influence the content and pace at which the colony’s racial laws were liberalized; for the black, this meant that racial liberalization would proceed at a pace set by the UFP’s political interests, which would likely delay considerably the onset of majority rule in the colony. More­ over, both extremes arrived at the same dominant strategy for stopping the UFP’s bid for power in the postindependence era: polarizing the polity along racial lines. The attempts by both extremes to undermine the UFP’s electoral strategy culminated in the general election of December 1962. On the one hand, the RF’s promises to reassert white control over Rhodesian politics drew away moderate white voters concerned by the rising tide of black vio­ lence and fearful that racial liberalization was careening out of control. On the other hand, the black nationalists sought to thwart the UFP’s multira­ cial electoral strategy and its claims of black support by effectively boy­

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Manipulating the Market

cotting the election. Of the 10,632 registered B-roll voters, only 2,117 cast ballots in the election, transforming the contest into an outright race between the UFP and RF for the votes of the white electorate. Attacked from both extremes of the political spectrum, the UFP’s strategy of building a centrist, multiracial political coalition collapsed. The result was a stunning victory for the Rhodesian Front and the African nationalists. The Front captured 35 (A-roll) constituency seats on the strength of 38,284 votes, while the UFP managed to capture 15 seats with 30,470 votes in the constituencies and 14 of 15 seats in the (B-roll) dis­ tricts.68 With 35 parliamentary seats to the UFP’s 29, the Rhodesian Front now possessed the ability to recast the fundamental direction of Rhode­ sian politics. The nationalists also celebrated the UFP defeat. On the one hand, they believed that it would force Britain to intervene in Rhodesian politics on the nationalist side. As Theodore Bull notes: The nationalists claimed to be delighted by the overthrow of White­ head’s “partnership” regime; they felt that the issue was now much clearer, with an avowedly racialist RF government in power rather than a white government which had fooled the British by preaching “moderation” and partnership between the races without any real intention of practising it.69 On the other hand, the nationalists realized that they had played the key role in bringing down the UFP regime. Nationalist violence drove moderate whites to the RF as well as impeded the UFP’s attempt to mobi­ lize black voters. Finally, by boycotting the election, the nationalists had denied the UFP the votes necessary to return to power. It was later esti­ mated that had an additional 5,000 B-roll voters participated in the elec­ tion, the UFP would have emerged victorious. Thus, according to Robert Blake, “the boycott was decisive. In that sense, Joshua Nkomo was the true architect of the victory of the Rhodesian Front.”70 The polarization of Rhodesian politics cannot be understood solely in terms of defending white privilege at all costs. The UFP still received 43.8 percent of the A-roll vote in the 1962 election.71 Moreover, these voters chose the UFP even though Whitehead promised to repeal the Land Apportionment Act, the central pillar of the colony’s racial institutions. Thus, despite the intensity of the RF’s propaganda and the rising levels of nationalist violence, there remained substantial white support for some type of power-sharing arrangement with the colony’s majority black inhabitants. Rhodesian politics polarized along racial lines because it was in the

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53

political interest of both major opposition groups, the Rhodesian Front and the nationalists, to pursue policies leading to this outcome. The Rhodesian Front needed to stanch the tide of black economic and politi­ cal advance to protect the interests of its core constituents of white labor and white farmers. By relentlessly emphasizing the dangers of black polit­ ical power, the RF could not only mobilize and sustain support among these voters, they could also appeal to moderate voters willing to share power with blacks but troubled by the nationalist swing toward violence since 1959. Ironically, without the tacit cooperation of the nationalists in reject­ ing racial compromise and polarizing the electorate from the left, the RF’s message would have lost its broader appeal. The nationalists obliged because polarizing the electorate was also a dominant strategy for laying the foundations for nationalist power. Because the nationalists were too weak to challenge the white control of the Rhodesian state directly, they faced two options for promoting nationalist interests. Either they could acquiesce in the UFP’s strategy of multiracial politics, or they could seek to force Britain’s intervention on their behalf by polarizing the colony along racial lines. Given that the first option entailed delaying the onset of majority rule considerably and subsuming nationalist interests to UFP interests, the nationalists understandably chose the second. In short, the polarization of Rhodesian politics arose directly from the strategies pur­ sued by that colony’s political elites as they sought to lay the foundations for political power in the postcolonial era.

The Consolidation of RF Power

When the Rhodesian Front assumed power after the 1962 general election, it faced three important tasks. The first was to consolidate its own base of political support. The second was to prevent the UFP from pursuing effec­ tive opposition to RF policy. The third was to gain rapid independence from Britain. The RF wanted to use independence to entrench its rule and feared that the longer it waited in securing independence from Britain (either unilaterally or in a negotiated settlement), the more likely Britain would be to use its reserve powers to force majority rule on the colony. To accomplish the first task, the RF built a party structure that estab­ lished direct and durable links to the electorate. At the most fundamental level of party organization were the local branches, which were not only self-financing but also responsible for local party activities. Reflecting the strength of the agricultural community within the party, the branches overrepresented rural interests. They were linked upward through con­

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Manipulating the Market

stituency and divisional groupings into the National Congress. Although it was the party’s nominal decision-making body, power resided largely in the national executive and the National Standing Committee, which han­ dled day-to-day affairs and to which the prime minister and government were directly responsible. At all upper levels of the party organization, nonparliamentary members held a majority of votes as a way of ensuring that the government did not drift too far from party preference.72 The organization of the Rhodesian Front represented a dramatic innovation in Rhodesian politics. It linked the colony’s leaders directly to their rank-and-file supporters through a structure that was independent of the normal channels of governance. As a result, the Front could mobilize and sustain support from previously unorganized interests such as white labor.73 This party structure also enabled the Front to contest and win local elections that had traditionally been nonpartisan affairs. In this way, the RF took control of most local councils, ousting officeholders drawn mostly from the ranks of commerce and industry.74 Finally, this structure enabled the party executive to set up standing committees composed of nonparliamentary members to parallel the governmental ministries, so that policy was often hammered out there instead of in the government.75 The power of the party executive became apparent in April 1964 when it backed Ian Smith in ousting Winston Field as prime minister for moving too slowly in securing independence from Britain. Yet despite the RF’s impressive electoral victory, it maintained only a slim six-seat majority in parliament. This was far short of the two-thirds majority needed to remove from the 1961 constitution the electoral laws that favored the UFP’s strategy of multiracial compromise. In addition, the strength of support both for the 1961 constitution and the UFP vote in the 1962 general election demonstrated that multiracial accommodation remained acceptable to a substantial number of whites. Moreover, Britain clearly desired to hand over independence to a centrist, multiracial coali­ tion like that the UFP had sought to construct. Thus, so long as the UFP remained a viable political party occupying the center of the political spec­ trum, the RF faced the risk that it could be returned to power. The Rhodesian Front responded to this danger by quickly moving to destroy the links that attached the UFP to the Rhodesian polity. In par­ liament, the RF continued its relentless attacks on Whitehead, accusing him of risking the colony’s ruin by “selling out” to blacks.76 Outside of parliament, the RF pursued a policy of intimidation and harassment of UFP supporters. The Rhodesian Front also broke the UFP’s power in the bureaucracy and economic associations by restructuring the government’s links to the

Prelude to Sanctions

55

colony’s organized interest groups. The RF cashiered senior civil servants thought to have UFP sympathies and placed a loyal RF member in charge of the Public Service Board. Likewise, the RF deprived the economic asso­ ciations of a meaningful role in the administration of public policy. For example, the Rhodesian Front first tried to wrest control of the RNFU by running its own slate of candidates for leadership of the organization. When that effort failed, the RF stripped the RNFU of its administrative func­ tions, allowing it only to play a coordinating role for the agricultural com­ modity associations such as the Rhodesian Tobacco Association (RTA).77 Moreover, after Ian Smith replaced Winston Field as prime minister in early 1964, the government acted to stifle public dissent of RF policy. Despite public protest, it took direct control of the Rhodesian Broadcast­ ing Corporation, turning that body into an instrument of party propa­ ganda and denying its facilities to the UFP.78 The RF also publicly treated any opposition to its policies as disloyalty to Rhodesia and implied that those who voiced opposing views were committing treason. For example, on one occasion Smith stated, “It is often difficult to distinguish between an enemy of the state and the Government’s legitimate political oppo­ nents. Indeed, the real enemy will always do his best to infiltrate and to use as a screen all the lawful, well-meaning, and loyal opposition groups.”79 The UFP reeled from the onslaught. Without a strong organizational structure that tied it to its supporters, the UFP simply could not mobilize and sustain support in such a hostile climate. Nor could it develop a coher­ ent strategy of effective opposition. Whitehead sought to woo further black support by offering to liberalize even further the colony’s franchise and racial laws, but lacking the power of office, Whitehead had nothing real to offer. The election had not changed the nationalist’s dominant strategy of polarizing the electorate and thereby forcing Britain to inter­ vene on their behalf. As a result, Whitehead only succeeded in alienating other members of the parliamentary caucus.80 With Whitehead’s influence rapidly waning, a number of prominent establishment figures prevailed upon Sir Roy Welensky, former prime minister of the Central African Federation, to re-enter politics. They hoped that Welensky would provide a strong figure to rally an effective opposition to the RF. In August 1964, the UFP disbanded, reconstituted itself under Welensky’s leadership as the Rhodesia Party (RP), and pre­ pared to fight a by-election to bring Welensky into parliament. Welensky’s re-entry into politics posed a significant challenge to the RF, and it pulled out all stops to defeat him. The RF accused Welensky of wanting to “sell out” the country to Africans. One prominent newspaper advertisement (written in the voice of a Rhodesian housewife) read:

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Manipulating the Market

I count my blessings. My sister Marge’s husband was a coffee planter in Kenya and they were better off (or so it seemed) than we were. Then the political scene changed and they lost their beautiful farm and its lovely homestead, as a result of the Government falling into irresponsible hands.... [Mike and I] will support our Prime Minister and the Rhodesian Front Government who have done so much in such a short time to free us from worry, and to give us the freedom and security we so much want.81

The RF also disrupted Welensky’s campaign meetings and, through the government’s control of the broadcast media, incessantly used these outlets against him. The Rhodesian Information Service issued a special statement by Ian Smith that censured Welensky for seeking to “meddle in the Indepen­ dence issue” and implied that the British government thought Welensky would be a pushover for instituting majority rule should he come to power.82 Welensky and the Rhodesia party were ill-equipped to respond to the broad-ranging attacks of the RF. The RP lacked a strong party organiza­ tion that could mobilize voters and project a proactive party program in such a hostile political environment. Many feared openly expressing sup­ port for Welensky or the RP. Although the campaign received financial support from a number of backers, Welensky’s business donors all wished to remain anonymous because they feared later reprisals from the RF.83 Finally, when Welensky tried to turn the campaign into a vote on the folly of unilaterally declaring Rhodesian independence from Great Britain, the RF adroitly undercut him by declaring that a unilateral declaration of independence was not the party’s intention. The election was a staggering defeat for Welensky, forcing his retire­ ment and shattering the ability of the RP (and the Rhodesian opposition more generally) to mount an effective program of opposition against the Rhodesian Front. The RF seized upon the opposition’s disarray to press the case for independence. In October 1964, it held an indaba, a delibera­ tive meeting with the tribal chiefs (who were also government-paid admin­ istrators), to demonstrate “traditional” black support for independence. In November 1964, the RF held a national referendum among voters, ask­ ing “Are you in favor of independence based on the 1961 constitution?” The RF specifically denied that this referendum implied consent for a Uni­ lateral Declaration of Independence, only that it was intended to convey to Britain the depth of feeling for independence. Of those voting (61.6 per­ cent of the electorate), 89.1 percent voted yes.84 Britain was unmoved. In particular, it felt that the chiefs could not be considered representative of the African majority because they were on the

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government payroll, and that the 1961 constitution contained inadequate guarantees of unimpeded progress to majority rule. In talks with the Rhodesian government in March 1965, Britain communicated five princi­ ples that became the basis for all subsequent talks on independence. 1. The principle and intention of unimpeded progress to majority rule already enshrined in the 1961-62 Constitution would have to be maintained and guaranteed. 2. There would also have to be guarantees against retrogressive amendment of the Constitution. 3. There would have to be immediate improvement in the political status of the African population. 4. There would have to be progress towards ending racial discrimina­ tion. 5. The British Government would need to be satisfied that any basis proposed for independence was acceptable to the people of Rhodesia as a whole.85

These principles reflected Britain’s desire to hand over power to a multiracial government broadly along the lines of that attempted by the UFP. Although these principles permitted white rule to continue (as well as gave whites considerable control over the pace of black advancement), the Rhodesian government was in a strong position and refused them. The re-emergence of a strong multiracial coalition to challenge the RF was, at that moment, remote. The RP was in a state of near-total collapse. More­ over, no blacks with any significant following were seeking compromise. In fact, the black nationalist movement had split into two factions, waging a number of pitched battles for the loyalty of supporters. The violence played directly into RF hands and was silently tolerated by the Rhodesian Front. Not only did it weaken the nationalist movement, but it under­ scored the RF’s argument that allowing blacks political power would inevitably lead to social chaos. According to Clements, who was mayor of Salisbury at the time: I can confirm that official policy for a while was to intervene as little as possible in the gang party warfare. So long as the two parties were breaking their competitors’ heads and burning their property, and so long as the victims were, with the rarest of exceptions, Africans, they were not only doing harm to each other, but to the whole African cause. Even the best disposed of Europeans became revolted by the brutalities which were reported in detail.86

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Manipulating the Market

The RF used this political moment to call a general election for May 7. It sought to place more pressure on Britain to hand power to the Rhode­ sian Front on its terms and to cement its hold on the electorate by elimi­ nating the opposition. In the campaign, the RF again and again attacked the Rhodesia Party for seeking a phased transfer of political power to blacks, and it pointed to the violence in the reserves as proof of the RP’s naïveté or even treachery. When the Rhodesia Party sought to point out the dangers of declaring independence unilaterally, the RF responded that UDI was not an issue in the campaign, but that should a nationalist takeover look imminent, the colony must be able to defend itself by what­ ever means necessary.87 The Rhodesia Party fought a losing battle. It was so weakened that it could not formulate a coherent electoral strategy nor find candidates to contest more than 25 of the 50 A-roll constituencies. Given the party’s lack of organizational resources, the control of the broadcast media by the RF, the atmosphere of intimidation and reprisal, the insinuations of treason, and the absence of coalition partners with which to build a viable multira­ cial strategy, the RP simply had little to offer the electorate aside from opposition. In fact, the best it could hope for in the election was to win 15 B-roll and 7 A-roll seats and thus prevent the RF from attaining a twothirds majority in parliament.88 In the end, the RP could achieve not even that. It managed to capture only 10 of the 15 B-roll district seats and none of the A-roll constituencies. All 50 had gone to the Rhodesian Front.89

The Polarization of Rhodesian Politics and UDI

The election of 1965 marked the final stage in the polarization of Rhode­ sian politics along racial lines. Clearly the vast cultural distance between Rhodesia’s white and black communities was one factor contributing to this outcome. On the one hand, whites rarely interacted with blacks on equal social footing, and most could not conceive of them as their peers. Most felt that black incorporation into the colony’s political life needed to be gradual and follow rather than precede economic advancement. On the other hand, blacks perceived that whites did not see a problem with white rule as long as it was just, and that one man, one vote would never be accepted.90 As a result, the multiracial efforts initiated by whites often seemed to cloak the white hold on political power with language of “civi­ lization” and “responsible” rule, while efforts to manage the pace of black entry into the political system smacked of paternalism.91 Finally, the vast cultural distance between the two made it easier for whites and blacks to organize within their communities rather than across them.

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59

These factors made constructing a true multiracial party extremely difficult, and it is not surprising that the UFP failed to develop deep ties with Rhodesia’s blacks. But the difficulty of constructing a unified, mul­ tiracial political party that bridged the distance between black and white must not be interpreted as meaning that the racial polarization of Rhode­ sian politics was inevitable. The difficulty in constructing a single multira­ cial party, for example, does not explain why multiple parties representing different racial constituencies did not emerge and pursue common inter­ ests across the divide. For example, the ANC’s initial attempts to gain greater access to the political system through compromise overlapped to a considerable degree with the goals of the UFP. To explain why cooperation failed to emerge across different parties, we need to move from the structure of Rhodesia’s race relations to the nature of its political competition. The UFP rejected a multiparty multira­ cial compromise, in part, because electoral considerations led it to try to mobilize blacks into the political system solely under the UFP banner. Likewise, the later polarization of Rhodesian politics between the nation­ alists and the Rhodesian Front arose not from an immutable inner logic of racial relations, but because it was in the political interests of both groups to bring it about. These two groups opposed not only each other, but also those who sought to bring about compromise solutions that lay some­ where in-between the two ends of Rhodesia’s political spectrum. The black nationalists’ rejection of compromise was based, in part, upon the belief that they would be able to achieve a better outcome through a strategy of confrontation rather than compromise. Not strong enough to challenge white rule directly, the nationalists saw polarizing Rhodesian politics along racial lines as way of forcing Britain (so it was hoped) to enter the conflict on the side of the nationalists. This hope was misplaced, for Britain persisted throughout the many years of the conflict in trying to seek a compromise solution,92 but it was not far-fetched. Britain had conferred power on the nationalist movements in all of its other African colonies, so why not Rhodesia? The Rhodesian Front likewise sought to polarize the Rhodesian polity by undermining support for any position of compromise. By destroying the political foundations of the UFP and later Rhodesia Party, the Rhodesian Front was able to define the political agenda as a stark choice between either its rule or that of the nationalists. In other words, the RF used its strategy of polarizing Rhodesian race relations as a way first to attain polit­ ical power in Rhodesia and later to consolidate and maintain it. The Rhodesian Front wanted not simply white rule in Rhodesia, but Rhodesian Front rule. In short, turning the cultural distance between white and black into political conflict and racial polarization was a political act.

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Manipulating the Market

The Rhodesian Front’s clean sweep in the 1965 elections virtually assured that the government would declare its unilateral independence from Britain. Britain was adamant that independence required unimpeded progress to majority rule, while the Rhodesian Front was equally certain that UDI posed acceptable economic and political risks. Britain’s only real recourse to UDI was to impose economic sanctions on the colony, and there was no mistake that this was Britain’s intent. In October 1964, British prime minister Harold Wilson threatened that an illegal declaration of independence in Southern Rhodesia would bring to an end relationships between her and Britain, would cut Rhodesia off from the Commonwealth, from most foreign govern­ ments and international organizations, would inflict disastrous eco­ nomic damage upon her and would leave her isolated and virtually friendless in a largely hostile continent.93

Although Britain’s threat of sanctions prompted a number of warnings from Rhodesia’s organized economic interest groups that sanctions could destroy the Rhodesian economy, the Rhodesian Front was undeterred. It argued that sanctions would be haphazardly enforced, quickly subside, and only harm Britain’s larger economic interests in Africa, especially in Zambia (Northern Rhodesia) and Malawi (Nyasaland). In his most infa­ mous statement concerning UDI, Prime Minister Ian Smith asserted: I don’t think there will be any belt-tightening, when we are indepen­ dent—the days of belt tightening will be over. That’s for sure. As far as the City of London is concerned it might be a three-day wonder. For that reason I think a Friday afternoon would be a good time. By Monday morning the excitement (if any) would be over.94

On November 11, 1965, Rhodesia formally declared itself indepen­ dent from Great Britain. Britain responded the following day by setting in motion an escalating series of economic sanctions. Britain’s initial eco­ nomic sanctions included banning the purchase of Rhodesian sugar and tobacco, suspending credit and aid guarantees to Rhodesia, and removing Rhodesia from the Sterling system and the Commonwealth preference area. These measures were followed by further sanctions in December 1965 and January 1966 that banned the import of Rhodesian minerals, the sale of petroleum to Rhodesia, and the payment of interest, dividends, and pensions to Rhodesian citizens. In December 1966, the United Nations complemented Britain’s efforts by imposing mandatory selective sanctions

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61

against Rhodesia, which were followed by mandatory comprehensive sanctions in July 1968.95 Britain’s initial intent in using sanctions was not to deliver power directly to Rhodesia’s nationalists, but rather to resurrect a viable com­ promise to the colony’s political and racial conflict by undermining domestic support for the Rhodesian Front government. The next fourteen years would be punctuated by a number of attempts to negotiate such a settlement: the Tiger talks in December 1966, the Fearless talks in October 1968, the abortive Smith-Home agreement of 1971-72, and finally the agreement at Lancaster House in 1979. But the economic pressure of sanc­ tions, although substantial, could not compel the Rhodesian Front to compromise. Commenting on the decision to reject the Fearless proposals in late 1968, Jack Howman, an RF negotiator in settlement talks with Great Britain, as well as Minister of Information and later Foreign Affairs, writes: The economic war was the major battle. The alternatives before us seemed to be two—economic attrition with constitutional freedom on the one hand, as against economic explosion but constitutional retraction on the other. Which carried the greater risk? Could we in fact face and overcome the economic stranglehold? It might take years but surely we could do it. [...] We were prepared for the long haul.... Naturally enough, the failure of the talks caused no little concern and in certain circles considerable despondency. However, Ian’s firm leadership soon inspired the con­ tinuing confidence of the vast majority of Rhodesians and, although a devastating drought and an appalling winter set us back consider­ ably, we settled down to retrieve our fortunes and, on the whole, suc­ ceeded very well.96

For the Rhodesian Front government, managing the economic and political consequences of sanctions was a matter of political survival that confronted it with two related problems. First, the Rhodesian Front needed to prevent the emergence of any domestic political grouping around which an opposition coalition willing to compromise with Britain could coalesce. Second, because a serious fissure within the white polity could create the political opening for such a potential centrist challenge to emerge, the Rhodesian Front also needed to maintain intact the facade of white unity that it had so carefully constructed on its way to gaining power. The ability of the RF both to prevent the emergence of strong

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domestic opposition to its rule and to sustain the facade of white unity despite the economic dislocations created by sanctions are two of the most notable features of the Rhodesian case. In the chapters to follow, I explain how the Rhodesian Front government manipulated the economic conse­ quences of sanctions in the colony’s major markets to achieve these politi­ cal goals.

CHAPTER 4

Muzzled Dogs Don't Bark:The Political Capture of Rhodesia's Tobacco Industry

Britain’s most promising economic sanction was the boycott of Rhode­ sia’s tobacco exports. Tobacco was Rhodesia’s largest industry and single most valuable export. Immediately prior to UDI, the tobacco industry accounted for 10 percent of Rhodesia’s GDP and 34 percent of its export earnings. Rhodesia exported nearly 95 percent of its tobacco production, mostly to the British market.1 Politically, these penalties would fall directly upon the colony’s tobacco growers, the strongest organized eco­ nomic interest group in Rhodesian politics. Not only did tobacco’s domi­ nant position in the Rhodesian economy confer substantial political power on this group, the growers themselves comprised the rural back­ bone of the Rhodesian Front party.2 By devastating the economic fortunes of this group, Britain threatened to destroy the rural foundations of the urban-rural coalition that had delivered the Rhodesian Front to power and thus to create within Rhodesia the political conditions conducive to achieving a negotiated settlement. Although sanctions devastated the tobacco industry, they failed to live up to their promise. Growers remained publicly loyal to the govern­ ment even though its central policy proved far more ruinous to their inter­ ests than the conditions demanded by Britain for independence. The boy­ cott dried up Rhodesia’s traditional and most lucrative markets for tobacco. By the early 1970s, nearly half of growers had been forced from production. Most who remained were losing money. Yet despite their unrivaled political power prior to sanctions, growers proved remarkably weak in protecting their interests during the boycott. They could neither extract more favorable policies from the existing government to mitigate their losses, install a new government less hostile to agriculture, nor end the boycott by forcing the government to settle with Britain. In fact, the government progressively distanced itself from tobacco, sacrificing this group for the sake of its broader political vision. The inability of sanctions to fragment the growers’ public political support for the Smith government raises an important puzzle. Why did 63

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tobacco growers (and farmers more generally) fail to challenge a govern­ ment whose central policy proved so ruinous to their interests? What pre­ vented them from effectively defending their own economic position once the disastrous consequences of UDI became clear? Conversely, what enabled the government to detach itself from the country’s most powerful industry and its strongest constituency? These questions are usually answered in two ways. One is to argue that the government was actually a captive of grower and other agricul­ tural interests and that its policies reflected the interests and preferences of this group.3 Even if growers suffered from the boycott, this argument goes, the government nonetheless did everything it could to protect this con­ stituency in a difficult situation. As an important contemporary study argues, “It is inconceivable that the RF would continue in its present form if rural residents were not convinced that the party and its leadership were serving their specific interests.”4 The other explanation argues that the boycott’s threat to the growers’ livelihoods and Rhodesia’s independence forged internal unity by activating norms of group or racial solidarity and self-sacrifice.5 Both explanations are compelling. Winston Field, a wealthy tobacco grower, became the Rhodesian Front’s first prime minister when it defeated the United Federal party in 1962.6 Moreover, the strong presence of farmers within the government also implies that agricultural interests had captured government policy. Farmers, a recent study notes, “were strongly represented on all sides of the bargaining table: they had a strong interest organisation, dominated the marketing boards, and were over rep­ resented in the RF party as well as in the government. At one point in time, more than half of all government ministers were farmers.”7 Likewise, race was the most prominent cleavage in Rhodesian politics, which had already been polarized by UDI along racial lines. Yet neither explanation is satisfactory. Close scrutiny reveals that growers had clearly not captured the government, for government policies often varied substantially from those demanded by agriculture. In fact, the boycott generated widespread political discontent among growers that could have become the basis for political challenges to its rule. Once the disastrous consequences of sanctions became apparent, prominent grow­ ers such as Winston Field privately urged the government to accept the conditions of the 1966 Tiger proposals. Nor can white solidarity explain the bitterness and vehemence with which growers attacked the govern­ ment’s agricultural policies from the late 1960s onward, the government’s unresponsiveness to these attacks, the fact that a tobacco farmer, Pat Bashford, headed an opposition party that formed in 1968 to promote a multiracial society, or why the Rhodesian National Farmers’ Union

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(RNFU) began exploring accommodation with the African nationalists as early as 1973.8 All indicate that this group’s loyalty to the government was more tenuous than commonly assumed. The missing element that accounts for this group’s behavior was the government’s ability to restructure the market in ways that destroyed the growers’ capacity for autonomous collective action in the aftermath of sanctions. Rhodesia’s tobacco growers responded to the boycott by demanding a new set of market institutions that would enable them to defend prices in a hostile economic environment. Yet these institutions not only insulated growers from the economic consequences of sanctions, they also made growers dependent on the government for their continued eco­ nomic viability; divided the growers internally by generating substantial conflicts of interest among them; and deprived growers of their most important political asset, the wealth generated by tobacco exports, in building coalitions with other groups in Rhodesia’s polity. Moreover, the government credibly demonstrated its willingness to use its new position in the market to retaliate harshly against political opposition by destroying the political and professional careers of those who threatened to mobilize this group. As a result, the tobacco growers, who could once make and unmake government policy to suit their interests, lost the means to shape their own destiny.

Rhodesian Tobacco to UDI

The roots of Rhodesia’s tobacco industry lie directly in the failure of the British South African Company (BSAC) to find a “second rand” in South­ ern Rhodesia.9 The company had obtained a charter from the British Crown in 1889 to develop and administer this area by claiming that the region held mineral riches comparable to those of South Africa’s Trans­ vaal reef.10 By the early 1900s, however, dreams of plentiful gold had van­ ished. The BSAC turned instead to developing white agriculture as a way to recoup its losses, a program that severely disadvantaged the black peas­ ant farmers who then fed the colony. To free up high-quality land for white settlement, the BSAC reduced the size of native reserve areas. To ensure white access to markets, it shifted the physical location of reserve areas away from rail lines originally built to service the mines. To create a cheap labor force for working white farms, the BSAC used hut taxes to compel black peasants to enter the money economy and pass laws to “get labour to go where it was wanted.”11 In other words, the BSAC promoted the development of white agriculture by systematically undermining the competitiveness of black peasants.

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Manipulating the Market

The BSAC’s plans for developing the colony’s white agricultural sec­ tor had, from the beginning, included tobacco as a major crop. For the first decades of its development, however, a number of problems beset the Rhodesian tobacco industry such as the uncertainties of pest and climate, high cost, and uneven quality. The most severe problem was the devastat­ ing pattern of boom and bust that characterized the industry. High prices for tobacco in one year led to rapid rises in production in subsequent years, which then saturated the market, causing prices to collapse. The most dramatic bust came in 1928, when the London market was flooded with stocks of Rhodesian tobacco equivalent to seven years’ consumption. Prices for the crop plummeted, bankrupting roughly three-quarters of Rhodesian tobacco growers.12 The growers responded by organizing. In 1928, they formed the Rhodesian Tobacco Association (RTA) as a commodity branch of the Rhodesian National Farmers’ Union. Economically, the RTA’s role was to coordinate the productive activities of the growers, as well as to provide them with market power when dealing with buyers of their crop. Politi­ cally, the RTA acted as a pressure group on the colony’s government. In 1933, membership in the RTA became compulsory for growers under the Tobacco Levy Act, which also provided financing for the RTA in the form of a levy on each grower’s sales. The Tobacco Marketing Act of 1936 finalized the structure of the production side of the tobacco market. It stipulated that all flue-cured tobacco (over 95 percent of the total crop) be sold exclusively at open auc­ tion in Salisbury.13 It also established the Tobacco Marketing Board, the government authority responsible for overseeing the tobacco industry. The Board now assessed the crop in terms of quantity and quality; planned the sales season; controlled the delivery of tobacco to the auction floors; licensed buyers and commercial graders; and classified the crop for statis­ tical purposes. At the time of the UDI, the board consisted of nine mem­ bers: three representing the growers; three representing the buying inter­ ests; two nonvoting members representing the auction floors and the Department of Extension and Conservation; and an independent chair­ man, usually the permanent secretary of the Ministry of Agriculture. The representatives for the buyers and growers were chosen by the minister of agriculture from lists submitted by these interests’ representative organi­ zations.14 The buying side of the Rhodesian tobacco market took its final shape in the years immediately following World War II. In 1946, local buyers and merchants of tobacco created a counterpart to the RTA by forming the Tobacco Trade Association (TTA), which became their official repre­ sentative to the Tobacco Marketing Board.

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The most important development on the buying side of the market, however, came in 1947 with the London Agreement.15 Under its terms, the Rhodesian growers assured the British buyers of a guaranteed proportion of the crop at a reasonable quality and price. The British tobacco compa­ nies, for their part, committed themselves to take each year the lesser of 46 million pounds or two-thirds of the Rhodesian crop for an initial five years, with the agreement to be renewed each year for the next five years ahead.16 As time progressed, the agreement was continually revised upward so that by the time of UDI the British commitment was to take at least 100 million pounds or two-thirds of the crop.17 The British compa­ nies’ long-term commitment to Rhodesian tobacco broke the industry’s cycle of boom and bust. Rhodesia’s tobacco exports rose from an average of 14,000 metric tons during 1940-45 to 121,000 metric tons in 1965, approximately one-third of free-world tobacco exports for that year.18 In 1964, the importance of the London Agreement to stabilizing of the Rhodesian market was vividly demonstrated when a huge low-quality crop caused prices to fall to their lowest level since 1945. Fearing prices would collapse, the Rhodesian industry asked the British to step up their purchases. The British companies responded by buying 15 million pounds more than they had pledged under the London Agreement. Their action halted the ruinous slide in prices and averted another catastrophe for the Rhodesian tobacco industry.19 Two other events in the early 1960s are also important for our under­ standing of the Rhodesian tobacco market. First, the sheer size of this crop forced the RTA to adopt voluntary production quotas for the first time for its next crop, largely to forestall mandatory quotas imposed by the government. Although the minister of agriculture offered to make the RTA’s quotas legally binding, the RTA declined, and growers turned in an on-target crop of some 246 million pounds. In July 1965, the RTA asked its members in a referendum whether a system of production quotas should be maintained. The growers overwhelmingly rejected the idea. They argued that not only did the smaller 1965 crop show that growers could themselves control production, but that by restricting the supply of tobacco, a system of production quotas would also drive up prices and thus encourage foreign competitors to enter the market.20 The second important event was a study done by the RTA in 1962 of the open auction marketing system.21 Growers were concerned that the tobacco auctions were being manipulated to their disadvantage. The 3,000 licensed growers who sold tobacco at auction faced only 10 licensed buy­ ers, of whom 3 accounted for the bulk of purchases.22 This imbalance between buyers and sellers often led the growers to charge the buyers with price fixing, particularly during periods of low or fluctuating prices. The

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inquiry by the RTA, however, uncovered little evidence of this practice. Moreover, it found that of all the marketing options available to stabilize the grower incomes, only the existing system of free and unfettered auc­ tions would best serve their interests.

Price supports [read the report] would fail for financial reasons and seriously prejudice the export trade on which industry depends. Price equalization would react against the best growers, the best producing areas and prospects for expansion. Pools of fictitious surpluses would antagonise the trade and in the end depress prices.23 Finding none of the alternatives acceptable, the report concluded that “the auction system of selling flue-cured tobacco should remain compulsory and the auctions unfettered and free.”24 Both events demonstrate the deep commitment of the growers not only to the existing system of marketing but also to minimizing govern­ ment involvement in the tobacco industry. State intervention, the growers reasoned, would only undermine their long-term prosperity.25 Attempts to manipulate the supply of tobacco reaching world markets would only increase foreign competition and erode their own market position, as would marketing systems other than competitive auctions. Moreover, their success in voluntarily controlling the size of the 1965 crop proved that not only was government regulation of tobacco production unwise, it was also unnecessary. In fact, growers pointed to their free-market orien­ tation with pride. “In these days, when agriculture is subsidised world­ wide,” read the 1962 report, “it is refreshing to find that the progress which has taken place in Rhodesia’s flue-cured industry has been effected with the minimum financial aid from government.”26 Finally, hand in hand with the rise of Rhodesia’s tobacco industry to world prominence was the rise of the growers as a powerful political lobby. From its earliest days, Rhodesia’s political life was dominated by agricul­ tural interests. In 1911, farmers gained a majority on the colony’s Legisla­ tive Council.27 When Rhodesia became a self-governing colony in 1923, they created a political system that systematically favored rural interests. Throughout the 1920s and 1930s, white farmers used the state to consoli­ date their economic and political power. On the one hand, they used the state to pass measures such as the Land Apportionment Act, which under­ cut competition from black farmers by forcing them off the most produc­ tive farmland. On the other hand, farmers also used the state to create statutory authorities to regulate their own behavior, enabling them to overcome many of the risks inherent in agricultural production. However, it was not until the early postwar years that tobacco grow­

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ers established their position as the preeminent economic interest group in Rhodesian agriculture and politics. Tobacco surpassed gold in 1947 as the colony’s most valuable export. In 1949, the industry had its first major conflict with the government, when it levied a 20 percent export tax on tobacco. Not only were its exports booming, but, the government rea­ soned, the tax would also draw support from nontobacco farmers who resented tobacco’s windfall.28 The government’s plan backfired. The tobacco growers balked, threat­ ening to postpone the tobacco auctions should the government attempt to levy the tax. They were supported not only by other members of the tobacco industry, but also by the RNFU and many members of industry and commerce who depended on the revenues that tobacco brought to the colony. The widespread opposition forced the government to backpedal. It first lowered the levy to 15 percent but finally settled for a “compulsory loan” from the growers equal to 15 percent of export earnings repayable in five years at 2Vi percent interest. The following year, the government aban­ doned the compulsory loan scheme and in 1954 repaid the loan in full.29 Tobacco’s clear victories in this and other squabbles with the government prompted Edward Harben, a prominent tobacco grower, to pen the fol­ lowing ditty which appeared in the Central African Examiner: Protests abounded and waves of resistance Amounted to such agricultural hate, That rather than risk any stubborn insistence, The tax was withdrawn without further debate.

Turn again Whittinghead! Lord Mayor of Blunders! Tobacco has very near cost you your throne. Now for the future what everyone wonders Is—have you the savvy to leave it alone?30

Thus, by the early 1950s, it was “clear to everyone in the country that what touched tobacco touched everyone’s interest. Southern Rhodesia and Tobacco had become synonymous.”31 The political power of the tobacco growers changed little over the next one and one-half decades. Their power rested on the twin pillars of being the colony’s largest exporter and on the privileged position that agri­ cultural interests in general enjoyed in the colony’s economic and political life. Yet unlike other agricultural interests that used the state to control the production and marketing of their crops, the tobacco growers preferred to hold the state at arm’s length. A more active role, they feared, would let the state to make another grab for their wealth. This led Clements and

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Harben to write in their 1962 history of the industry that “after 1947, it can be said that Rhodesian tobacco has had nothing to fear but Rhodesia itself.”32 The uniqueness of tobacco’s relationship to the Rhodesian state orig­ inated in the structure of the world tobacco market. Unlike other crops where farmers used the state to protect them from the vagaries of the mar­ ket, growers used the London Agreement. Paradoxically, it was also this agreement that proved tobacco’s undoing. By concentrating more than 50 percent of Rhodesia’s sales in the British market, it made Rhodesian tobacco an ideal target for economic sanctions.

Independence, Tobacco, and the Threat of Sanctions

When the question of independence from Great Britain moved to the fore­ ground of Rhodesian politics in the early 1960s, Rhodesia’s farmers and tobacco growers were among those most clearly affected by this issue. The privileged economic position of white agriculture rested on several fea­ tures of Rhodesia’s racial policy. The most apparent was the Land Appor­ tionment Act. This act severely disadvantaged the competitiveness of black farmers by reserving the most productive farmland for whites and by pushing black farmers onto crowded reserves. It bred so much black resentment that land became a central issue defining the black nationalist struggle. “So much envy [over land] has been created,” wrote one nation­ alist leader, “that expropriation or seizure of European land will be resorted to by the future African rulers of the country.”33 Black farmers were also systematically denied access to markets as well as credit with which to finance their crops. Rhodesia’s rail and road networks ran largely through white areas, limiting the ability of black peasant farmers to bring their produce to market. Once black farmers got their crops to market, they were forced to pay a 10 to 15 percent levy; no such tax existed for white farmers.34 Black farmers also had little access to credit facilities. Government agricultural finance for black farmers was minuscule com­ pared to that available to white farmers. Private finance was generally unavailable. Black farmers could offer no collateral to secure loans because they did not hold freehold title to the land they farmed. Even the Industrial Colour Bar, which reserved skilled industrial positions exclu­ sively for white workers, also benefited white farmers by depressing black wages across the board.35 Taken as a whole, these features point out why farmers and growers were extremely wary of Britain’s demands that independence be accompa­ nied by mechanisms ensuring eventual majority rule. Although the

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changes in the status of blacks that Britain demanded would not have led to black expropriation of white lands or ruined white agriculture, they would have made the political system over time more responsive to black interests, an outcome that would inevitably hurt the competitive position of many white farmers. Expanding the access of black farmers to agricul­ tural markets would put them in direct competition with whites. Opening up agricultural financing to black farmers would have increased the demand for this key input, thus raising its cost to white farmers. Even allowing the entry of blacks into skilled jobs in the industrial sector would have had repercussions on agriculture by bidding up its labor bill. As a result, for many white farmers, unilateral independence from Britain was a means to entrench a system of white privilege that advantaged their pri­ vate interests.36 Britain’s threat to respond to a unilateral declaration of independence by imposing a tobacco boycott on the colony was not lost on Rhodesia’s tobacco growers. They were acutely aware of their vulnerability to British sanctions against tobacco exports as more than 50 percent of Rhodesia’s sales were concentrated in the British market. In January 1965, the RTA presented a memorandum to the government that predicted that sanctions would cut tobacco exports in half; that the system of free and unfettered auctions would break down; and that Rhodesia would lose its share of the world market to other producers.37 Interestingly, there is little evidence that the growers exerted any real pressure on the RF government not to declare independence despite their knowledge of the devastating effects that sanctions could have on their industry.38 In fact, the tobacco growers and other white farmers were among the primary proponents of a policy of unilateral independence. Two factors account for the apparent discrepancy between the grow­ ers’ awareness of the potential harm sanctions could inflict on their indus­ try and their support for UDI. First, few Rhodesians (growers included) expected sanctions to be a long-term affair.39 The RF government consis­ tently asserted that UDI would present Britain with a fait accompli and that any sanctions would be short-lived.40 In fact, its original legislation to reorganize the tobacco industry in response to sanctions was set to expire automatically at the end of 1966.41 Likewise, the government’s decision in July 1966 to finance the 1966-67 crop at near-normal levels of production was interpreted by many observers to mean that Rhodesia expected to set­ tle within the year.42 Second, the particular features of the market for Rhodesian tobacco made the crop unusually resistant to economic sanctions that lasted less than two years. Tobacco is a seasonal crop that is sold at auction between late March and early October. This gave the Rhodesian government a six­

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month window in which to declare UDI and either settle any remaining differences with Britain or circumvent the sanctions.43 Likewise, the major buyers of Rhodesian tobacco all held stocks approximating two years’ normal consumption to smooth out fluctuations in supply. In anticipation of UDI, many buyers built up stocks to ride out Britain’s expected sanc­ tions and would respond to sanctions by simply drawing down their stock­ piles. This would help preserve Rhodesia’s market share. These stocks also meant that tobacco could be sold to foreign buyers but stored in Rhodesia while sanctions were in effect, and then shipped once sanctions were lifted. Hence, sanctions might result only in changing the physical location of the tobacco stockpile from warehouses abroad to warehouses in Rhodesia. In fact, many early sales of Rhodesian tobacco under sanctions were made on this basis.44 Finally, demand for Rhodesian tobacco was inelastic over the short term. Rhodesian tobacco was a high-quality leaf with a distinctive flavor that was used in the manufacture of cigarettes. It was blended with other tobaccos to give a brand of cigarettes its characteristic taste. Since there were no close substitutes to Rhodesian tobacco in terms of flavor, an abrupt shift away from using Rhodesian tobacco in a cigarette’s blend would also drive away customers. This forced the manufacturers who used Rhodesian tobacco to respond to sanctions by first drawing down their stockpiles; it also guaranteed that any switch to non-Rhodesian tobaccos would be gradual. Not only would manufacturers remain loyal to Rhode­ sian leaf over the short term, the sanctions would also not immediately translate into increased demand for other tobaccos supplied by Rhodesia’s competitors. Thus, sanctions posed the threat of irreparable harm to the tobacco industry only if they lasted more than two years. Over shorter periods sanctions would have affected growers’ incomes through lost exports, but their effects would have been transitory. Rhodesia’s major markets would have remained intact, and the long-term prosperity of the industry would not have been harmed. Only as sanctions stretched beyond two years would manufacturers begin changing their blends and cultivating other sources of supply. Yet, sanctions of this duration were simply unthinkable to most people at the time, making UDI a gamble well worth taking.45

UDI and Rhodesia's Response to Tobacco Sanctions

When Britain imposed the boycott on Rhodesian tobacco in November 1965, the 1965 crop had already been sold. Although sales of the 1966 crop would not begin until the following March, it soon became apparent that,

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at least for the coming season, the sanctions threatened to inflict poten­ tially serious losses on the tobacco industry. The major British tobacco companies told Rhodesian tobacco industry officials that they would honor Britain’s sanctions, thus stripping the industry of the benefits of the unofficial London Agreement.46 At a stroke, Rhodesia had lost its major export markets for its most valuable export. The sudden loss of at least 50 percent of the market confronted grow­ ers with a severe collective action dilemma. The crop coming on market was one of the three largest in Rhodesian history at almost 250 million pounds.47 With the British absent from the market, the remaining buyers were simply too small to generate enough demand to support the market to any significant degree, forcing growers to undercut each other’s offer prices to secure sales in a glutted market. Nor could growers defend prices by relying on voluntary efforts to withhold tobacco from the market. The sudden glut only intensified the incentives that normally existed for indi­ viduals to cheat on voluntary collusive arrangements. In the absence of mechanisms that compelled individual growers to act in the collective interest, prices would collapse, delivering an economic windfall to the few remaining buyers of Rhodesian leaf, but at a very, very heavy cost to the growers. Aware of the impending disaster, industry leaders met with the minis­ ter of agriculture in December 1965 to devise a plan to defend prices in response to the market’s collapse. Their solution was to create the Tobacco Corporation, a government entity and statutory monopoly responsible for all aspects of marketing the crop. The Corporation con­ sisted of up to eight members who represented different segments of the industry and served at the pleasure of the minister of agriculture.48 The original members were Sam Whaley (chairman), a prominent lawyer and friend of the prime minister; farmer/businessman Harry Wells; Don Bell, chairman of the TTA; Ginger Freeman, managing director of Tobacco Sales (one of the auction floors); and Carol Heurtley, president of the RTA.49 This new body operated under eleven terms of reference, the most important of which were maximizing the number of growers; maintaining the free-auction system of marketing; and enabling growers to produce a 1966-67 crop and ensuring the continuity of world markets.50 The Tobacco Corporation Act of 1966, the Corporation’s enabling legislation, prohibited growers from either selling or exporting their crop to anyone other than the Tobacco Corporation.51 The act required grow­ ers to deliver their crop to the Tobacco Marketing Board, which graded each bale according to quality. The tobacco then passed to the Tobacco Corporation, which assumed ownership of the crop by paying the grower a reserve price for each grade, intended to cover the average costs of pro­

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duction.52 The Corporation then pooled the tobacco with that of other growers of the same grade and sold the crop at market, passing back any profits to the grower in proportion to his contribution to the pools from which the sales were made. Tobacco not fetching the reserve price would be withdrawn from the market and stockpiled by the Corporation. The government provided the Corporation’s operating capital from its general revenues. It also, through the minister of agriculture, deter­ mined the reserve prices paid to growers and, following the 1966 season, the target size of the next year’s harvest.53 In both circumstances, govern­ ment consultations with different segments of the tobacco industry occurred via the industry’s representatives in the Corporation.54 As a result, the Corporation intervened not only between buyers and sellers in the export market, but also between the industry and government in the political arena. The 1966 selling season was a disaster. Tobacco exports fell 76 per­ cent from 120,898 metric tons in 1965 to 28,959 metric tons in 1966. The value of Rhodesia’s tobacco exports fell some 82 percent, from RS93.9 million to RS16.7 million.55 Aware that little tobacco was moving, the Corporation sought to prevent buyers from colluding against it by selling tobacco only in secret negotiations with individual buyers.56 The buyers nonetheless drove very hard bargains, taking tobacco only at the Corpo­ ration’s reserve price.57 Growers also fared poorly. Although the government announced that grower prices would average 26d./lb, prices actually averaged 20d./lb.58 The Tobacco Corporation blamed the discrepancy on a poor-quality crop, in which there was much less high-quality tobacco than expected, but many believed that the Corporation had deliberately downgraded the crop in order to minimize its financial burdens.59 This price was well below the cost of production for most growers, who complained bitterly about the government failing to keep its end of the bargain. The government responded first by raising prices in August by 5 percent on all but the low­ est grades.60 In September, it issued supplementary payments to growers of 7 percent on flue-cured, 10 percent on Burley, and 16 percent on Orien­ tal. The government claimed the supplementary payment was due to the Corporation’s success in selling the 1966 crop; the real reason was to defuse the growers’ growing anger at government policy.61 By the end of 1966, the tobacco stockpile was huge, standing at 93,890 metric tons.62 The Rhodesian government could either set reserve prices for 1967 low enough to bring production in line with export demand, or it could keep prices high but limit production using quotas. The first was unthinkable; producer prices low enough to clear the market would bankrupt most growers. This would have been political suicide.

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There were already early indications of political unrest in the countryside; even lower prices for 1967 would have swung most growers against the government. The government chose the second option. In July 1966, it announced its plans for the 1967 crop, which was targeted at 91,000 metric tons. Growers would be paid an average reserve price of 28d./lb, which was higher than the current reserve price and approximately 2d./lb above the average cost of production. Production would be controlled by the Tobacco Marketing Board.63 It would assign quotas to growers based on a percentage reduction of their average harvest over the last three sea­ sons.64 However, larger producers would face bigger proportionate cuts in production than smaller producers. This ensured that many of the smaller, marginal producers who would otherwise be forced off the land would stay in business. Quotas would also be tradable. Even if a grower could not make a profit at the government’s reserve price, he could still sell his quota to producers that could.65 By the end of 1966, the basic structures of the Rhodesian tobacco market under sanctions had thus taken shape. A new statutory monopoly, the Tobacco Corporation, now controlled all aspects of marketing the crop. Externally, the Corporation acted as a monopolist to defend export prices. Internally, it was a monopsonist that both paid growers reserve prices intended to just cover the costs of production and also determined the size of the target crop. The cultivation of tobacco was governed by the production control scheme, which used mandatory quotas to limit indi­ vidual production and was administered by the Tobacco Marketing Board, another statutory authority. In short, the tobacco boycott accom­ plished what the growers previously rejected—the extension of state con­ trol over their industry. Restructuring the market in this way solved the immediate problems of the tobacco boycott. Economically, the Tobacco Corporation and pro­ duction control scheme overcame the collective action dilemmas that would have otherwise caused the ruinous collapse of prices on the auction floors as growers undercut each other’s offer prices to capture sales to the few remaining buyers. By channeling all sales through the Corporation, growers could defend prices higher than those set by the unconstrained operation of the market by controlling the quantity and price of tobacco given for sale. The production control scheme likewise prevented growers from overproducing and placing further downward pressure on prices. And, because the Corporation was the sole legal outlet for tobacco, it could easily monitor and enforce the regulations governing the activities of individual producers, thus ensuring that each acted in the collective inter­ est. In fact, these institutional solutions to the growers’ collective action

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dilemmas under the boycott were highly effective. Demand for tobacco was so weak that the stockpile of unsold tobacco at the end of the season was only slightly less than the average annual harvest between 1959 and 1965.66 Yet export prices fell by only a quarter, from 77.80/kg in 1965 to 57.70/kgin 1966.67 Restructuring the market also minimized the political risks of the government’s decision to declare independence. The system of reserve prices ensured that growers covered their costs regardless of prices achieved on world markets. This meant that the effects of any sanctioninduced collapse in export prices would not be passed through to the growers but onto the economy at large. And because “the average grower would not be in any worse position financially at the end of the season than when he started,” most remained solvent enough to plant another crop.68 The government designed the production control scheme to impose larger cuts on the most efficient producers. This created an intrain­ dustry subsidy that kept otherwise inefficient producers in production and spread the economic costs of the boycott among growers not according to the economic criterion of efficiency, but the political criterion of fairness. Fewer than 3 percent of growers would be forced out of production.69 In short, the government’s initial objective in restructuring the market was not to maximize the efficiency of tobacco production, but to minimize its domestic political vulnerability to the boycott. Contrary to the expectations of government and growers alike, sanc­ tions proved long lasting. Between 1966 and 1971, the tobacco industry hit bottom (see table 1). Tobacco exports rose slightly during the period, aver­ aging 42,000 metric tons, with an average value of RS21.8 million per year.70 Moreover, the Corporation’s stockpile of unsold tobacco contin­ ued to grow, and in 1970 reached its peak of 137,000 metric tons—over three times the amount of its average yearly sales under sanctions. The boycott’s effectiveness in shutting down Rhodesia’s tobacco exports transformed the relationship between the government and grow­ ers. The government’s failure to reach a settlement with Britain in the Tiger talks of December 1966 and the Fearless talks of October 1968 meant that UDI and a thriving tobacco industry were no longer compati­ ble political objectives. The same factors that had earlier insulated tobacco growers from sanctions over the short term, the inelastic demand for Rhodesian leaf and the stocks held by the major tobacco companies, now threatened a severe and long-lasting contraction of the industry. As over­ seas stocks of Rhodesian leaf dwindled, major buyers would begin culti­ vating other sources of long-term supply and switching cigarette blends to non-Rhodesian tobaccos. Thus, even if the industry survived sanctions,

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growers could find themselves permanently shut out of their most lucrative markets. By early 1967, the government realized that tobacco had become a major economic and political liability. Many within its ranks now argued that tobacco must be sacrificed if Rhodesia was to prevail in its bid for independence.71 The Treasury, in particular, argued that the government must limit its financial exposure to an industry reeling from sanctions. There is an obvious limit [said agriculture minister Rudland] to the extent which the Government can go on tying up money in stockpiling a commodity which presents selling problems because of the British sanctions. If we were to produce another 200 million pounds, the posi­ tion would be in a year’s time that we would have £50 million tied up in a stockpile which would be getting steadily more expensive.72 This presented the government with a thorny political problem. The grow­ ers were its most powerful constituency and had supported UDI on the premise that it was the best means for ensuring their long-term prosperity. Now that independence could only be achieved at their expense, the govTABLE 1. The Rhodesian Tobacco Industry under Sanctions Exports by

Year 1965 1966 1967 1968

1969 1970 1971 1972

Value (R$ 1,000)

Export Prices in

#kg

tons)

120,898

93,936 16,688 17,906

77.8

54,068 26,119 93,890

21,990 17,986 22,151 28,993 39,975 57,744 68,281 63,236 76,475 69,758

54.7 48.9 47.0 53.0 57.3 67.6 86.6 111.7 100.6 105.8

91,729 n.a.

120.7 n.a.

28,959 30,782 40,182 36,844

1975 1976 1977

47,112 54,736 69,750 85,393 78,847 56,604 76,010 65,888

1978 1979

75,939 60,623

1973 1974

Beginning

Exports in Metric Tons

57.7 58.1

Stocks (metric

129,599 129,870 136,770 130,412 129,009 109,658 81,204 64,185 74,948 88,231 90,025 81,183

Source: Rhodesia, Secret Supplement of Monthly Digest of Statistics (Salisbury: Gov­ ernment Printer, 1979), 16; U.S. Department of Agriculture, Foreign Agriculture Circular: Tobacco FT 11-80 (December 1980). Note: All figures for unmanufactured tobacco, n.a. = not available.

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ernment needed to disengage from the industry while at the same time pre­ venting growers from mounting an effective opposition to its policies. Unwilling to take on growers directly, the government began to dis­ engage itself from tobacco by gradually ratcheting down both the growers’ reserve prices and their production quotas. As John Hennings of the British High Commission in Salisbury observed at the time: It is not in character for the regime to risk a head-on collision this year with those whom they regard as their strongest supporters and who represent an industry which has been lauded as the backbone of the economy if they can purchase quiet by taking a decision which will postpone their decision until next year.. .. They are, of course, past masters in irresponsible Micawberism when their political life is at risk, whatever the long term damage to the economy.73 In 1967, the Corporation maintained reserve prices at 28d./lb but reduced the targeted crop size to only 60,000 metric tons, only two-thirds of the previous year’s crop and well under the 70,000 metric tons necessary to maintain the current number of growers.74 The growers were furious. Carol Heurtley, president of the RTA called the cutback “a shock to all tobacco growers, most of whom will certainly feel bitterly disappointed by the Government decision.”75 Sir Roy Welensky interpreted the move as a clear signal that the government was ready to sacrifice the industry for the sake of independence.76 The government conceded that approximately 20 percent (500 to 600) of growers would be forced out of production, but insisted the move was in the national interest. In March 1968, the government tightened the screws further, propos­ ing to lower reserve prices for 1969 from 28d./lb to 22d./lb while maintain­ ing a target crop of 60,000 metric tons. The announcement again sent shock waves through the growers. Tom Edridge, a prominent Wedza grower, called the price “a clear statement by Government that tobacco growers and the industry as a whole are expendable, despite protestations to the contrary by the Minister of Agriculture.”77 The president of the Rhodesian National Farmers’ Union accused the government of planning a “descent into chaos” for the industry.78 More than 1,200 growers had left production since 1965, and only 5 percent of the remaining growers would turn a profit at this new price. Saying the government should “honour their undertaking to the growers,” the RTA demanded a minimum price of 26d./lb on a crop of 60,000 metric tons.79 The government relented by bringing up its reserve prices to 25d./lb, an offer the RTA rejected as inad­ equate, claiming it lay under the growers’ average cost of production of

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26d./lb. In the end, however, the RTA gave in despite its estimate that 50 percent of growers would still earn less than the cost of production.80 In 1969, the Corporation targeted the 1970 crop at its lowest level yet—55,000 metric tons at a reserve price of only 23d./lb. Speaking of agri­ culture’s troubles in the 1970 budget statement, finance minister John Wrathall stated, “It is natural that the industry has turned to the State for financial assistance and it is on this point that I must sound a warning.... In their own and the country’s long term interests, farmers must continue unceasingly their efforts to achieve and maintain profitability without direct financial support from the State.”81 The government was true to its word. Production quotas and reserve prices remained low for the next three years.82 At the same time that the Corporation pushed down producer prices for tobacco, the growers were hit by steeply rising costs on their inputs. Fertilizer, fuel, and much of the growers’ capital equipment were imported and were now much more expensive due to sanctions. The steady rise in input costs combined with falling prices in tobacco put severe pressure on growers. Many left the industry; between 1965 and 1973 the number of growers fell by almost half, from 2,927 to 1,519.83 The government encouraged most growers to diversify into other crops, often with subsidized loans to finance the start-up costs of switching production. Yet diversification quickly proved unworkable. Many grow­ ers’ farms were on sandveld and were suited only to cultivating tobacco.84 Other agricultural markets quickly became saturated, causing prices to fall and creating demands for further government intervention to stabilize these markets as well. Between 1965 and 1973, the share of agricultural production controlled by the government more than doubled, from 35 to 75 percent. Only minor crops remained unaffected.85 Moreover, prices in these markets offered growers a much lower return than tobacco. Cotton, for example, yielded only £20 per acre compared to tobacco’s £70.86 Almost 65 percent of farmers had been losing money since 1967, and many, especially small farmers, now found “ruin staring them in the face.”87 They were kept afloat only through government loans and subsi­ dies.88 RNFU president Mike Butler called diversification a failure, saying that the “sustained profitability and diversification made necessary by the depletion of the tobacco market had been largely impossible for most farming enterprises.”89 Caught in the vise of falling prices and rising costs, political disquiet began to spread in the farming community. As early as 1967, farmers began to worry seriously about their industry’s future because of the gov­ ernment’s failure to settle with Britain. Winston Field, a wealthy grower

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and the RF’s first prime minister, told Sir Nicholas Cayser in early 1967 that he would have accepted the Tiger settlement.90 In early 1968, Field sought to persuade Smith to settle and may have even linked his efforts to those of Ahrn Palley, Evan Campbell, and other prominent opponents of the regime. Although many within Rhodesia considered Field capable of rallying support for a settlement that included significant numbers of RF followers, the government suspected links between Campbell and Field, and Field never made his efforts public.91 He resigned from the RF in July 1968, ostensibly over dissatisfaction with the RF’s record in implementing its principles. Privately he admitted his decision was “due in part to Smith’s dilatory tactics in reaching a settlement with Britain which he, Field, had been urging on Smith for some time.”92 There were other indications of political disquiet. In May 1967, groups of farmers from the Umvukwes, Marandellas, Centenary, and Sinoia growing districts presented memorandums to an official commis­ sion on drafting a new Rhodesian constitution, urging that the new con­ stitution fulfill the conditions of the Tiger proposals and so end sanc­ tions.93 In June 1967, the son of Winston Field, Jeremy Field, a prominent grower in his own right and future president of the RNFU, informed Sir Cyril Walker, chairman of Standard Bank, that the growers’ worsening plight was leading to “a significant growth of opinion in favour of reach­ ing a settlement with the British government on the basis of something close to the ‘Tiger’ arrangements.”94 In April 1968, Major Peter Rous, chairman of the Umvukwe Farmers’ and Tobacco Growers’ Association, demanded that the government must either get the country out of its mess or resign.95 In May 1968, at a protest meeting in the strongly RF Karoi district, D. Lazell, the chairman of the Karoi Farmers’ Association, called for new parliamentary representation because the current government was no longer responsive to agriculture’s needs.96 In August 1968, the British High Commission in Salisbury noted that “Farmers realise that tobacco can no longer be profitable .... some even are beginning to question the doctrine of the Rhodesian Front that any hardship is preferable to the threat of tenurial security under majority rule.”97 Likewise, the Gemini News Service reported, “Farmers at meetings all over the country, and recently at a mass meeting in Salisbury, have shown themselves in bitter conflict with the Government. Their nightmare is increasing debt, aban­ doned farms, the slow destruction of their industry.”98 In September 1968, Evan Campbell, whose bank was an important source of agricultural credit, reported that growers in the strongly RF Karoi growing district were now “troubled and definitely want a settlement.” When Campell informed the growers that his bank would extend additional credit “only provided there is a Rhodesian/British settlement,” the growers accepted

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his announcement “without demur.” Previously the growers in this area had been hostile to Campbell, one of Rhodesia’s leading businessmen, who was known to support a settlement." In fact, the situation grew so tenuous that growers threatened to break into open revolt in late 1969 and early 1970 as three issues came to a head. First, the government further reduced projected grower incomes by imposing a three-year crop limit for the 1970-71 through 1972-73 seasons of 45,000 metric tons at 28d./lb. This volume and price represented a loss to the growers of at least £2 million per year over the current season. “The financial position of the grower,” declared the RTA, “is now desperate and he can no longer bear the cost of implementing Government policy to keep the industry viable.”100 The association unanimously rejected the government’s plan and urged the government to open negotiations with it.101 Not only did the RTA consider the production target and price too low, it was furious that it had not been formally consulted by the govern­ ment when the targets were set.102 Upon learning of the RTA’s rejection, the minister of agriculture announced that crop reductions were “nonnegotiable” and would simply be imposed on the growers.103 The growers’ anger was heightened by the consequences of a plan used by the government in 1967 to limit tobacco production. That year the gov­ ernment decided that any grower who relinquished his quota for at least three seasons could subsequently re-enter the industry at his discretion, subject only to the quota scheme then in place.104 Some 1,000 growers took up the government’s offer; their voluntary exit from tobacco production enabled the government to reduce the 1968 crop by over 30,000 metric tons from its 1967 level. Many of these growers were now looking to re-enter tobacco production because diversification had proved even less profitable.105 Yet, the 1970-71 quota was too low to support the current number of growers, much less those who might now restart production. At stake were issues of cost and compensation. Many of those who had left the market in 1967 were bitter. Wrote one grower, “The outcome of this exercize [s/c] was that those who complied with the request were penalized, and many of the growers who increased production had an increased quota.”106 The government wanted to placate these former growers by allowing them to sell their reacquired quotas to other growers. In doing so, moreover, it would impose the costs of placating these grow­ ers directly on current producers. The RTA, on the other hand, sought to protect the interests of those growers still producing. It held that former growers unwilling to restart production should not be further compen­ sated by selling their quotas. The RTA, explained its secretary, J. M. Mor­ ton, “is strongly opposed to these growers selling their quotas to existing growers ... and thereby being subsidized by the very people who can least

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afford it—the remaining tobacco growers who are struggling to retain this industry.”107 In February 1970, the minister of agriculture announced a compro­ mise. Returning growers could sell their quotas to the government at 50/lb, which the government would then resell to current growers at i60/lb per year. This compromise was still unacceptable to the RTA, which claimed that not only were growers losing money at current reserve prices, but that “the new scheme would only increase their losses.”108 Nonetheless, the RTA reluctantly agreed to the scheme. “We will do our best to implement it in the same way as we always implement Government decisions,” said RTA president Jack de Witt, “although we make it quite clear to growers that this is not the choice of the RTA.”109 Finally, the growers and government clashed head-on over the tobacco stockpile, which growers believed was largely responsible for the reduced target crops from 1968 onward.110 Because the stockpile was a direct consequence of declaring UDI, they felt it was a national responsi­ bility whose costs should be borne by the country at large. “Is the £16.5m. loss [on the stockpile] not largely a result of the 1965 political decision, taken after that year’s crop had already been planted?” asked Jack de Wet, president of the RTA at its 1969 annual congress. “Must we then bear the weight of this decision alone?”111 Moreover, by damping production, the growers also argued that the stockpile impeded the recovery of the indus­ try. Either the government should allow them to produce at the level of export sales, or it should destroy the stockpile. “If we are to start from scratch again and build up our industry as we did in the past,” de Wet con­ tinued, “we cannot do this with the millstone at Belvedere [the main stor­ age site] around our necks.”112 Conflicts over these three issues culminated in a bitter fight between the RTA and the government in early 1970. Growers clearly perceived that the government considered them expendable. In March, one disgruntled member of the RTA’s governing council decided to contest the minister of agriculture’s seat as an independent candidate in the parliamentary elec­ tions to be held that April.113 The fight escalated in early April when the minister of agriculture, David Smith, sharply attacked the commodity marketing boards and especially the RTA for mixing in politics. These groups, he claimed, had been seeking undue influence by lobbying against him in other ministries. He further warned that unless the agricultural community removed party politics from its commodity associations, it would force the government into an intolerable position.114 The fight cli­ maxed three days before the elections when Smith demanded the resigna­ tion of the entire RTA leadership. “I believe,” Smith said, “that the most

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honourable solution would be to call on the RTA Council to seek a new mandate from the tobacco growers—to resign en bloc, and seek re-election .... the present problem has become so serious that this is the only solu­ tion.”115 The RTA, in turn, vehemently denied having a political agenda and deplored “that the Minister should drag into the political arena the RTA which is not a political body.”116 Despite the deepening bitterness over agricultural policy since UDI, growers neither rallied to the political entrepreneurs who sought to exploit their grievances nor did they pressure the government to give in to sanc­ tions.117 The rumored swing of growers behind the extremist Republican Alliance in the parliamentary elections of April 1970 never materialized.118 Nor were any of the fourteen independent candidates for parliament able to gain toeholds, despite playing directly to the farmers’ demands. These candidates all made a return to agricultural profitability the central plank of their platforms. For example, one independent candidate and former member of the Rhodesian Front in the Merwa-Mtoko constituency received loud applause at a campaign rally for attacking the government head-on:

Agriculture is in a desperate position. It is non-profitable. There is no future for young farmers today. I accuse the RF government for being a bad Government because they have forgotten about us [the farmers]. They have paid far too much attention to commerce and industry and tourism.119 Yet none of the independent candidates was able to loosen the RF hold on power, as the RF again swept all 50 A-roll seats. As one cabinet minister in the Smith government recalled, “we had to hold the farmers pretty hard but we never worried about losing them.”120

Explaining Grower Quiescence

The boycott’s inability to fragment the growers’ public loyalty to the Smith government raises an important puzzle. As we have seen, the tobacco boycott not only inflicted tremendous costs on this sector, it also generated intense political discontent, leading many growers to question the wisdom of UDI. Some, such as Winston Field, even privately urged the government to settle along the terms of the Tiger proposals. Yet the grow­ ers proved unable to defend their interests. By the early 1970s, the growers’ numbers were cut in half. Many who remained were losing money. They

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could not prevent the government, via the Tobacco Corporation, from set­ ting prices against them, often at levels below the cost of production. Nor could they pressure the government to end their nightmare by reaching a settlement with Britain. Growers instead limited public criticism of the government to narrow issues of agricultural policy and shunned altogether serious challenges to RF rule, even though its central policy of unilateral independence had devastated their industry far more thoroughly than any of the conditions demanded by Britain for formal independence. The answers to this puzzle lie in the government’s ability to destroy the growers’ capacity for autonomous collective action. Two factors were especially important in the government’s efforts to undermine the growers’ political power: the threat of government retaliation against those who sought to mobilize a credible opposition to its policies and the new institu­ tional structure of the tobacco market that made growers extremely vul­ nerable to government action. The Threat of Government Retaliation

The Rhodesian Front government retaliated harshly against those indi­ viduals who sought to organize rural discontent into a coherent political opposition. The government’s failure to accept the Tiger proposals in December 1966 led Frank Clements to seek to form an opposition group, the Reconstruction Party, to challenge the Rhodesian Front.121 Clements was an ardent champion of Rhodesia’s agricultural community, the editor of the Rhodesian Farmer (the official publication of the RNFU), a former mayor of Salisbury, and a former member of the Dominion Party, the pre­ cursor party to the Rhodesian Front whose members also included Win­ ston Field. Clements had extensive ties in business and agricultural circles. He received financing for his party-building efforts from Sir Albert Robin­ son and “Tiny” Rowlands, a Rhodesian businessman whose extensive business interests encompassed much of central and southern Africa. A secret organizational meeting on January 19, 1967, included a number of prominent Rhodesians with business and agricultural interests, including tobacco. Clements’s real hope was to build the party’s primary support from his many friends in the farming community.122 Clements’s efforts to form an opposition group, however, were exposed before they ever had a chance to get off the ground. The govern­ ment’s response was swift. It instructed Tim Mitchell, president of the RNFU, to dismiss him as editor of the Rhodesian Farmer for “playing pol­ itics.” Clements protested that all he had done was “to argue the farmers’ case, something which in Rhodesia seems inevitably to place oneself in

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conflict with the Government on agricultural matters.”123 Yet he also fully appreciated the intense pressures Mitchell was under and the dangers this posed to the RNFU. The order to dismiss Clements had come directly from Smith and Rudland.124 For Mitchell to ignore these instructions, Clements conceded, would create intolerable pressures on the RFNU from a regime in which “legalities . . . count for very little with those who exercise and abuse their executive powers today.”125 To prevent further retaliation against the RNFU and personal attacks against himself, Clements agreed to emigrate quietly to London under the pretext of an extended leave, even though he had no career or professional ties in Britain. The regime was no less tolerant of public dissent within its own ranks. In early 1968, Robin James, an RF backbencher, criticized the govern­ ment on two counts. First, he complained that the RF had been too slow in implementing its principles that called for a stricter separation of the races in Rhodesia. Second, and “perhaps even more explosive,” James demanded at a meeting of growers in Centenary that the Rhodesian gov­ ernment pay tobacco growers the full £15 million allotted for that year’s tobacco crop, regardless of the shortfalls in quantity and quality that were now expected because of a severe drought.126 The RF, in turn, forced James to relinquish his seat in parliament and expelled him from its ranks. It also publicly vilified him to send a message to others in the party not to “rock the boat.”127 The RF’s treatment of James was so harsh that John Hennings of the British High Commission in Salisbury described it as “what an undisciplined maverick can expect from a semi-fascist organiza­ tion.”128 The ruling faction within the Rhodesian Front was even harsher with William Harper, who was the ambitious, right-wing minister of inter­ nal affairs.129 Harper was extremely critical of Smith’s leadership and sought to build a coalition within the party to challenge Smith’s control of the RF. Smith responded by having Harper secretly investigated by Rhodesia’s Special Branch police. In July 1968, Smith fired Harper from the Cabinet, publicly labeling him a security risk and alleging irregularities in Harper’s business practices at the Chirundu sugar estates, which the British interpreted as a clear attempt “to keep Mr. Harper out of politics by the implied threat of prosecution.”130 The effort succeeded as Harper, despite his well-known political ambitions, resigned from the party and retreated altogether from political life, thus depriving the right wing of the party of its most powerful leader. In short, the Rhodesian Front was gov­ erned by a “hard core of ruthless men” who had clearly demonstrated to leaders within the agricultural community that they would retaliate harshly against anyone who posed a credible threat to their political power.131

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The New Institutions of the Tobacco Market

The second factor that explains the government’s ability to undermine the growers’ capacity for autonomous collective political action was the new institutional structure of the tobacco market. This structure undermined the growers’ political power in three ways. First, state control of the tobacco industry made growers dependent upon the government for their continued economic viability. This vitiated any attempts by the growers to influence government policy with either their market or political behavior. The growers had two market strategies open to them. Either they could threaten to bankrupt the Tobacco Corpo­ ration by overproducing, or they could threaten not to bring their tobacco to market as they had done in 1949.132 Both were threatened by the grow­ ers, and both were found wanting.133 The threat by growers to bankrupt the Corporation by overproducing was not credible. Because the Corpo­ ration was the sole domestic purchaser of tobacco, it could simply refuse to buy from rebellious growers. Likewise, refusing to bring the crop to market would only allow the government to clear the stockpile. “Growers no longer argue from a position of strength,” commented the Rhodesia Herald, “and their claims begin to sound rather like bluster.”134 The growers’ only alternative was to enter the political arena. Here too grower dependence on the government gave government the upper hand. In an important study of agricultural policies in tropical Africa, Robert Bates explained the puzzling absence of rural protest against gov­ ernment policies that directly harmed farmer interests by pointing in part to the institutions that underlay these markets. These were structured in ways that enabled the government to provide divisible benefits—produc­ tion quotas, input subsidies, financial loans—to its political supporters in the agricultural community and to deny them to its opponents. Because few individual producers could afford to risk the loss of these critical inputs, the government could fragment rural opposition even as it harmed producers as a whole.135 A similar pattern of political control was created by the new institu­ tions of the tobacco market. The government, via the Tobacco Corpora­ tion and the Tobacco Marketing Board, now controlled the most critical input for any grower—the production quota. Because tobacco prices offered by the Corporation often failed to cover the costs of production, a grower’s profitability was directly determined by another set of inputs pro­ vided by the government, the loans and subsidies that kept most growers solvent. The government’s ability to discriminate among growers was fur­ ther strengthened in 1968, when it amended the Tobacco Corporation Act to give the minister of agriculture the discretion to determine which grow­

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ers received supplemental payments from the Corporation. The act had previously bound the Corporation to treat all growers of the same grade of tobacco alike.136 Government control of the tobacco market had several important political consequences. Because the government was unlikely to assist those who opposed it, the government’s ability to determine a grower’s economic viability encouraged growers to publicly express political sup­ port for the government even as they suffered from its policies. For exam­ ple, John Hennings of the British High Commission in Salisbury reported in February 1968 that several groups of farmers are arguing that they can no longer get by for another year on loan finance alone, but that they must be sub­ sidised on a grant basis for whatever they are asked to grow or not to grow, whether it be tobacco or any other crop. In the same voice, how­ ever, they have reaffirmed their undying support for the regime.137

Likewise, one Karoi district grower pleaded to the minister of agriculture, David Smith, in December 1969: There are many small farmers in our area and we will not be able to withstand another season like the past one. We know that by the end of the 1971-72 season there will be very few of us left unless positive steps are taken now to rectify the position. .. . We plead with Gov­ ernment to help us, and in so doing enable us to stand with it instead of against it.138 Government control of the market also made growers extremely vul­ nerable to government retaliation. The threat that the government could retaliate for political opposition was a powerful tool moderating this group’s political behavior. The government’s treatment of Clements and others demonstrated to the agricultural community that it would severely punish anyone who sought to mobilize this group against it. Even to openly support a political entrepreneur seeking to challenge the govern­ ment was risky.139 Public acts of political opposition by growers were thus extremely rare. Field, for example, never made public his pressure on Smith to accept the Tiger terms, even though he was widely believed capa­ ble of carrying a significant number of Rhodesian Fronters in favor of a settlement. Private acts, such as Field’s personal urging of Smith to settle, posed little political threat because they were not widely known and could not therefore catalyze the widespread discontent into political opposition. In fact, public criticism of the government tended to be over narrow

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issues of agricultural policy such as the level of reserve prices or disposi­ tion of the stockpile on the one hand, while explicitly rejecting more fun­ damental political challenges to RF rule on the other. For example, imme­ diately after his demand that the government get Rhodesia out of its mess or resign, Major Peter Rous, chairman of the Umvukwe Farmers and Tobacco Growers Association, disclaimed any implied political challenge by adding “I am no politician.”140 More significantly, the RTA itself retreated from any political challenge of the government. Thus, when the government accused the RTA in April 1970 of mixing in politics, the RTA publicly rejected the charge that it was a political organization or had a political agenda, and it held that members of the RTA Council could stand for public office only “as long as they cease participating in the affairs of the RTA during the election period.”141 At its annual congress in June 1970, the RTA distanced itself from the political sphere even further by requiring RTA Council members to resign before taking an active part in parliamentary elections, even though the RTA had previously been a launching pad for political careers in Rhodesian politics.142 It also mended fences with the government as the president of the RTA, Jack de Wet, pub­ licly thanked the minister of agriculture for his efforts on behalf of grow­ ers. “I should like it put on record,” de Wet stated, “that I believe David Smith has fought our case with tenacity and vigour, and I would like to express my personal thanks and confidence in him.”143 In short, government control of the tobacco market created a politi­ cal environment that was extremely hostile to collective opposition. To elicit economic assistance from the government, growers publicly pledged their political support. To deflect possible retaliation, growers suppressed political dissent and explicitly defined their public dissatisfaction in nar­ row terms that denied political challenges to government rule. These ratio­ nal grower responses undermined collective action by generating a high degree of uncertainty about the likely success of open political opposition. Public affirmations of political loyalty obscured the extent, depth, and nature of grower opposition as well as the range of alternative policies that might be acceptable to them. The retreat of growers from the political arena deprived them of the ability to build and organize a viable rural protest. Thus, when substantial political opposition did emerge in the 1970 election, it was marked not by the emergence of an organized and cohesive rural protest but by a leaderless and incoherent smattering of independent candidates, none of whom offered the agricultural community any real possibility for meaningful political change.144 Second, the new institutional structures of the tobacco market under­ mined growers’ power by creating substantial conflicts of interest among growers. To minimize its political vulnerability to the boycott, the govern-

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ment sought to maximize the number of growers. To this end, it created a system of intragroup subsidies in which efficient growers paid to keep inefficient growers in production. One intragroup subsidy arose from the Corporation’s practice of pooling export sales and paying each grower in proportion to his contribution to the pool. Growers whose tobacco sold on world markets above the reserve price realized no additional profit but simply paid for the production of other growers. Likewise, the production quotas imposed larger cuts on the most efficient producers, allowing oth­ erwise inefficient producers to achieve economies of scale. These intragroup subsidies not only maximized the number of grow­ ers, they also helped undermine their political power by dividing them internally. Efficient growers could remain viable even at the lower prices and levels of output available under the boycott. Even though larger pro­ ducers were more able to diversify out of tobacco, they were also the least likely to do so.145 One of the easiest ways for them to improve their welfare was to end the intragroup subsidies that kept inefficient growers in pro­ duction. Sir Roy Welensky thus described the mood in the tobacco sector as “one of every man for himself [in which] the smaller man would go to the wall.”146 In 1970, the RTA Council (which was dominated by larger, more efficient growers) rejected a new government quota allocation scheme on the grounds that “the smaller grower would receive advantage out of proportion to that he deserved.”147 Naturally, the desire by efficient growers to limit intragroup subsidies ran directly counter to the interests of the least efficient growers. This internal conflict nearly tore the RTA apart. In late December 1969, lowveld growers threatened to leave the RTA to form their own commodity association. These growers raised tobacco at elevations below 4,000 feet. Their tobacco was lighter than that grown in the highveld and commanded reserve prices significantly below average. These growers blamed low prices on the RTA leadership, which was dominated by high­ veld growers. According to Noel Picard, a Karoi district grower and spokesman for the dissidents:

Highveld growers, with their heavy yields of tobacco are averaging prices above the floor average; lowveld growers with the lighter yields are averaging below. There are numerous other anomalies in the dealings of the RTA where we feel that the highveld growers are taking advantage of us. It seems that not only do we have sanctions and terrorists to fight but, if we hope to survive, we will have to fight the RTA and Government as well. We find ourselves out on a limb and we feel we are being pushed off it rather than pulled back on.148

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The immediate cause of the lowveld growers’ complaints was the internal structure of the RTA, which was governed by a council comprised of one elected representative from each of the colony’s twenty-three tobacco­ growing districts. Because highveld districts contained fewer growers, the Council systematically overrepresented highveld growers even though they comprised a minority of the RTA.149 When the lowveld growers failed in their attempts to change this structure, they tried to form their own commodity association.150 The minister of agriculture, David Smith, exploited this conflict to the hilt. Warning that a breakup of the RTA would harm the interests of all growers, the minister stated he would negotiate only with the elected lead­ ers and councils of organized agriculture. He urged the lowveld growers to redress their grievances by changing the RTA from within, thus ensuring continued strife in that body.151 At the same time, the minister also allied himself with the small growers suffering most from sanctions. Speaking before parliament in early 1970, for example, he stated:

My main concern is to protect the young Rhodesian on the small farm who, under these conditions, has a difficult road ahead. Now having this in mind, it would happen that there are many people in this country who have no respect for these small farmers. I will con­ tinue this fight to see that the small farmer and the young Rhodesian are kept on their farms.152 He continued this theme in his attack on the RTA leadership in April 1970, when he accused the RTA Council of failing to safeguard smaller growers.153 The minister’s defense of small growers and his attacks on the RTA were well received. According to one small grower:

The bigger grower has suffered and will undoubtably suffer a further severe cut in income; the smaller grower faces extinction. Does the RTA’s council represent the views of the 66.85 percent of its number who produced less than 80,0001b each last year or is it dominated by a hierarchy of ambitious men? It is perhaps unfortunate that the smaller working farmer has neither the time nor resources to seek election to Council. . . . Has he at last found a champion in David Smith? Another commented that many growers who had “completely lost faith in the RTA a few years ago will heartily agree with the Minister of Agricul­ ture. . . . The call for the Association to resign and seek a new mandate

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strikes a sympathetic chord in the hearts of many of the smaller grow­ ers.”154 By exploiting these internal divisions, the minister of agriculture not only threw the RTA off balance, he encouraged the political loyalty of those suffering most from sanctions. Although inefficient producers had the most to gain from a favorable change in government policy (or gov­ ernment), they were also the most vulnerable. Any change in the market­ ing system favored by larger growers would likely expose them to the cruel blast of market forces. This not only made the most efficient growers uncertain allies in any strategy of protest (for they could easily defect), it also, paradoxically, encouraged the least efficient growers to be the staunchest defenders of the status quo. Strongly courting government favor protected these growers from efforts to alter the intragroup subsidies on which they depended and thus ensured their survival in an otherwise hostile economic environment. Finally, the new market structures enabled the government to isolate growers politically. Government control of the tobacco market meant that it, and not growers, now captured the wealth that tobacco generated for the colony. Because the minister of agriculture appointed the members of the Tobacco Corporation, the government determined both the composi­ tion and interests of this body. Even though growers were consistently rep­ resented in the Corporation, they comprised a minority of its membership. Once selling tobacco became a major problem, the government allowed marketing interests to dominate the Corporation’s actions. The Corpora­ tion began to sell tobacco to local merchants at the reserve price, which just covered the growers’ average cost of production and was substantially lower than the prices obtainable on world markets. This made the tobacco trade quite lucrative. According to one industry official: Merchants did very well under sanctions between ’68-69 and ’74-75 when the Tobacco Corporation had to unload a lot of its stockpiled tobacco. The merchants bought it at way below value and then sold it on the European market at just under world prices. They made a real killing.155

Another industry official commented that “UDI made merchants rich” and that many merchants would still be “small fish” today had it not been for their ability to buy directly from the stockpile.156 This strengthened the government’s hand in conflicts with growers. On the one hand, the gov­ ernment’s willingness to direct these rents to merchants gave them a vested interest in maintaining the institutions governing tobacco. As a result, when growers demanded that the stockpile be destroyed in order to force

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up producer prices, the tobacco merchants strongly opposed them. Moves to raise grower prices would only undermine their ability to exploit the new markets they had worked so hard to open.157 On the other hand, the government’s control of tobacco rents isolated growers on the fringes of the political spectrum by depriving them of potential allies. One reason growers had prevailed so strongly in preboycott conflicts with the govern­ ment was because tobacco merchants and other segments of the commer­ cial sector depended upon the wealth that growers brought to the econ­ omy. The new market institutions meant that the government, not the growers, now captured most of this wealth, depriving growers of their most important political asset for forming coalitions with other potential allies. The growers (and farmers in general) were well aware that they were powerless to challenge the government and that the origins of their politi­ cal weakness lay in state control of the market. In 1968, Tom Edridge, a prominent Wedza grower, accused the government of attempting to “divide and rule” the growers by manipulating grower prices.158 In 1970, the president of the RNFU, Jeremy Field, expressed his dismay at the new relationship between agriculture and government, saying:

We sow the seed and harvest the crop. It is delivered to Government bodies and they pay us out. Finally it is marketed by Government bodies and transported by Government transport. Farmers have everything they own on their farms. They cannot up root and move on.... I certainly hope this position will not be exploited.159

Jeremy Field repeated this theme in his address to the Annual Congress of the RNFU: “Can the farming industry ever stand on its own feet as long as Government control our marketing and have major socio-political con­ cerns when fixing our prices?”160 By 1972, the farmers realized that their political power had been broken. Admonishing farmers not to antagonize the rest of Rhodesia, then-president of the RNFU Mike Butler admitted, “I don’t think we have the political strength to ensure that Government subsidies will always be available to us.”161

Conclusion

Beginning in 1973, Rhodesia opened significant new markets in Europe and Asia. Between 1973 and Zimbabwean independence in 1980, exports rose to an annual average of 71,000 metric tons.162 Still well below pre­ boycott levels, this turnaround came too late for growers to salvage their

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political power. The government continued to distance itself from the tobacco market, even though the industry was still feeble and, after 1973, came under intense pressure from the civil war.163 In 1973, the government introduced a new production quota scheme that left almost one-third the crop unsupported.164 In 1976, the government forced the RTA itself to provide R$15 million to cover the growers’ reserve prices.165 By the late 1970s, the Rhodesian Front government had disengaged itself almost completely from the industry, and the Tobacco Corporation, in the words of one industry official, “just faded away.”166 Looking back, most now regard UDI as a terrible folly. Sanctions nearly destroyed the industry. Sanctions also led directly to the rise of Zimbabwe’s closest competitors in today’s tobacco market, as these coun­ tries not only filled the void created by sanctions against Rhodesian leaf, they also gained invaluable technical know-how from ex-Rhodesian grow­ ers and industry officials who emigrated. Zimbabwe still feels the effects of sanctions on Rhodesia’s tobacco industry. The failure of the boycott to elicit strong political dissent from the tobacco growers despite their tremendous losses is usually explained in one of two ways. One is to argue that growers had no reason to dissent because the government was in fact a captive of agricultural interests. The other is to argue that the common external threat posed by sanctions to the growers’ livelihoods and Rhodesia’s independence activated norms of group or racial solidarity and self-sacrifice, causing growers to rally to the government to ward off the common threat. Neither withstands close scrutiny. The government was clearly not captured by agricultural interests. It often acted contrary to the demands of growers and other members of the agricultural community. Nor do the facts that growers were organized into the RTA or that they were repre­ sented on the Tobacco Corporation and the Tobacco Marketing Board, the institutions that controlled the tobacco market, indicate that growers had captured government policy. The government, not growers, appointed the members of the Tobacco Corporation and the Marketing Board. These entities operated solely within the parameters set by the gov­ ernment, especially the degree to which the government was willing to finance the tobacco industry. When selling tobacco became a major prob­ lem, the government allowed the interests of tobacco merchants, not grow­ ers, to dominate the Corporation’s actions. As one grower and later vice president of the RNFU noted, the RTA’s power was largely limited to the “mechanics of implementing government policy,” and the biggest chal­ lenge facing the growers’ organization was that “somehow within the strait-jacket of State control, the RTA must try to formulate a scheme where a measure of more open opportunity could exist.”167 Nor is the fact

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that growers benefited from these institutions evidence they had captured government policy. The opposite is true. Because the government now controlled the benefits growers reaped from the institutions governing the tobacco market, it could also control the growers’ political behavior. Growers had not captured the government; the government had captured them. Likewise, the idea that growers rallied to the government to ward off a common threat does not explain the often intense conflicts between growers and the government, their deepening bitterness and resentment over government policy, or the intragroup conflicts that rent the RTA. Growers deeply resented the sacrifices they were forced to make while other sectors recovered, and even prospered, from the economic sanctions imposed against Rhodesia. Most important, grower solidarity cannot explain the pattern of potential opposition to the government among the agricultural community or the government’s responses to it. If group soli­ darity had been the natural or instinctive response of growers to sanctions, this opposition would never have emerged, nor would the government have found it necessary to retaliate harshly against those who threatened to mobilize it. I have argued instead that the tobacco boycott failed to elicit strong political dissent from the growers because the government used the new institutions of the tobacco market in ways that demobilized and captured the political loyalty of this group. One important puzzle remains. Why would the growers accede to the creation of institutions that so thoroughly undermined their own political power? The answer should not be surprising. To defend their interests in the wake of the boycott, growers asked the government to create institutions that aligned their private economic incentives with their collective eco­ nomic interest. By creating the Tobacco Corporation, a legal monopoly over the export of tobacco, the government defended prices in the export market by eliminating the ruinous price competition that would otherwise have resulted from the boycott. By creating the production control scheme, the government prevented growers from overproducing. By giv­ ing itself the authority to monitor the production of individual growers and to punish any who did not comply with the new rules of the market, the government made these institutions credible. Yet these institutional solutions to the collective action dilemmas cre­ ated by the boycott were not apolitical contracts that enabled growers to capture joint gains. They were inherently political structures that made growers dependent upon benefits that were now available only from the government. The growers’ need for coercion to compel them to act in their collective economic interest forced them to reach outside the market and

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employ the services of a third actor, the government. Yet the government’s interest in supplying coercion to the industry was not the growers’; it sought instead to minimize its vulnerability to a powerful political group that suffered directly from its policies. It therefore structured the new insti­ tutions of the tobacco market in ways that made these institutions agents of the government even as they delivered benefits to growers. Once sanc­ tions proved long-lasting, the government used these institutions to disor­ ganize and stifle potential political protest by dramatically raising the opportunity costs of political dissent. The very institutions needed by growers to overcome their collective action dilemmas and achieve joint economic gains under the boycott were thus the very same instruments used by the government to demobilize this group and capture its political loyalty as well.

CHAPTER 5

Reaping the Windfall, Paying the Piper: Rhodesia's Business Community Responds to Sanctions

The Rhodesian business community, which consisted of the colony’s com­ mercial, manufacturing, and mining interests, comprised the center of white opposition to the Rhodesian Front. The business community was the central coalition of interests that supported the rule of the United Fed­ eral party (UFP) in the 1950s and early 1960s, advocated the relaxation of Rhodesia’s racial laws, and saw eventual majority rule as the inevitable consequence of economic and political development. Like Britain, the business community desired independence on the basis of a negotiated set­ tlement. In fact, the two sides disagreed mostly over the sequence and tim­ ing of black advancement. The business community saw majority rule as the eventual outcome of economic development, occurring in the distant future. Britain preferred to bring majority rule to Rhodesia sooner rather than later. This affinity of interests made the business community a strong potential ally in Britain’s conflict with the Rhodesian Front government. Collectively, the business community was the largest contributor to Rhodesia’s economy. It generally supported the British position in negoti­ ations prior to UDI and, fearing that economic sanctions would cripple the Rhodesian economy, adamantly opposed any unilateral move for independence. Once sanctions were imposed, however, the business community’s opposition to the Rhodesian Front government proved muted and inef­ fective. By 1968, its efforts to pressure the Rhodesian Front government into a settlement had largely disappeared. And rather than use the eco­ nomic hardships of sanctions to rally opposition to the Smith government, the business community instead became active participants in ensuring the Rhodesian Front’s long-term political survival. Commerce maintained Rhodesia’s vital links to world markets; domestic industries replaced goods lost to sanctions; and the mines became the colony’s key source of foreign exchange.1 96

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The transformation of Rhodesia’s white business community from strong opponent of the Rhodesian Front government to willing accom­ plice in its attempt to entrench white minority rule in the colony raises an important puzzle. Prior to sanctions, the business community was an ardent proponent of building a multiracial Rhodesia, opposed the Rhode­ sian Front’s policy of unilateral independence to entrench white rule, and believed that eventual majority rule was critical to the colony’s continued economic development and long-term prosperity. Moreover, not only was the business community the largest contributor to the Rhodesian econ­ omy, it was Britain’s strongest Rhodesian ally. Why then did the business community not only consciously mute its opposition to a regime whose central policies ran counter to its own economic and political interests, but actively cooperate in ensuring that regime’s political survival? This puzzle is usually answered in one of two ways. The first argues that the business community rallied to the government to defeat Britain’s foreign intrusion into Rhodesia’s domestic politics.2 The second argues that the business community rallied to the Smith government out of racial solidarity, to deflect challenges to a system of white political and economic privilege that systematically advantaged white interests over black.3 Both explanations point to the apparent unifying effects of external threats on a group’s internal cohesiveness, and both are highly plausible. And yet both explanations of Rhodesia’s political unity are deficient. Not only do they reduce the mechanisms by which societies generate internal cohesion to a black box, they overlook the fact that Britain’s position in the conflict with Rhodesia posed little threat to the Rhodesian business community, for the two sides’ positions were highly similar. Finally, neither explanation per­ forms well empirically; a close examination of the business community reveals that it opposed (albeit ineffectively) the Smith government in the immediate aftermath of sanctions; dropped its overt opposition once the economy began to recover from sanctions; and initiated contact with black nationalists in the face of a growing political and economic crisis from the mid-1970s to discuss the country’s future.4 I will argue that the business community’s acquiescence to Rhodesian Front rule, and the apparent emergence of white unity in response to sanc­ tions that followed from it, did not result because sanctions activated norms of group or racial solidarity. Rather, white unity and the business community’s support of the Rhodesian Front government resulted from the government’s ability to manipulate the economic consequences of sanctions in ways that disorganized any credible political opposition and prevented even the discussion of credible alternatives to its rule from appearing on the domestic political agenda. In other words, the solidarity of the business community with the Rhodesian Front government was not

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the spontaneous upwelling of patriotic support or racial solidarity for a beleaguered regime, but a political construction with substantial roots in the marketplace.

Background: The Emergence of the Business Community

The Rhodesian business community encompassed three groups, each of which originated in a separate sector of the economy. These groups were mining interests dominated largely by the international mining houses, commercial interests which were mostly local, and finally the domestic manufacturing sector.5 Together these three groups accounted for the bulk of Rhodesia’s economic activity in 1965. In addition, the domestic manu­ facturing sector was the largest of the three, providing almost a fifth of Rhodesia’s GDP in 1965.6 This made Rhodesia’s economic structure fairly balanced by African standards, with a vibrant manufacturing sector com­ plementing the extractive, agricultural, and trading interests normally pre­ dominant in a developing economy. Each of these sectoral interests entered national politics during a dif­ ferent phase of Rhodesia’s economic development. Mining interests were the original driving force behind the settlement and colonization of Rhodesia.7 However, two factors soon undermined the political power of the mines. The first was the British South Africa Company’s (BSAC) fail­ ure to find mineral deposits as rich as those in South Africa. This prompted the company’s fateful decision to develop the colony’s white agricultural base, which brought a steady influx of white farmers to the colony. These farmers not only distrusted the “big business” interests of the mines and railroads,8 but eventually used their growing numerical and electoral strength to displace the mines as the dominant influence in early Rhodesian politics.9 The second factor was the increasing concentration of the mining sector, so that by the 1940s most mining activities were con­ trolled by a few dominant multinational firms.10 Although these concerns represented a substantial capital investment in the Rhodesian economy, their lack of electoral strength deprived them of the ability to play a role in Rhodesian politics on a par with that of agriculture or other economic interest groups. Thus, by the 1950s, the political influence of the large min­ ing companies was largely informal, working through the Chamber of Mines and governmental contacts inside the Ministry of Mines.11 Accord­ ing to David Murray: In electoral politics, however, these mining companies, and the Chamber of Mines as their representative organization, counted for

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little.... The Chamber of Mines and the mining companies depended on the government party being able to maintain its popularity with the electorate. The principal assistance the mining companies were able to give was in the form of money, but even here it appears . . . that the mining companies were chary with their support.12

Like mining, the commercial sector traces its origins to the earliest days of the colony. The Salisbury Chamber of Commerce, for example, was founded in 1894, only a few years after Britain granted the BSAC its charter.13 Commerce first entered national politics in the 1930s, when it unsuccessfully opposed a series of government interventions designed to raise producer prices by stabilizing the colony’s agricultural markets.14 However, its fortunes changed dramatically in World War II, when its role in administering wartime economic controls increased its influence in national policy.15 In 1947, commerce formed the Rhodesian Federated Chambers of Commerce, providing it with a strong national association from which to promote its interests.16 The first indicator of commerce’s new political strength was in 1952, when it forced the government to rescind a tax on “inessential” imports,17 prompting the prime minister to call commerce “the most influential section of the Southern Rhodesian public.”18 Thus, in contrast to the mines, which saw their political strength diminish over time, commerce became an increasingly powerful actor in Rhodesian politics, so that by the mid-1950s it “wielded powers analogous to those of the R.N.F.U. [Rhodesian National Farmers Union].”19 The third component of Rhodesia’s business community, the colony’s manufacturing sector, also traces its origins to the earliest days of the colony, when a number of small foundries and engineering firms were set up to service the mines.20 The sector remained small for the first four decades of Rhodesia’s development.21 The infant industry tariffs needed to generate an indigenous industrial base were strongly opposed by the colony’s agricultural, commercial, and mining interests, which all feared that tariffs would adversely affect the price of their manufactured inputs. Domestic manufacturers gained a reprieve from overseas competition, however, when World War II interrupted the flow of imports into the economy, touching off a remarkable economic expansion. The number of factories in Rhodesia grew from 294 in 1939 to 473 by 1948, while output skyrocketed from £5.4 million to £25.8 million over the same period, caus­ ing manufacturing to become second only to agriculture in terms of its contribution to national output.22 Moreover, growth did not stop with peace in Europe. The Continent’s dollar shortage fed a steady demand for Rhodesian products, while Rhodesia’s manufacturing sector also attracted substantial amounts of foreign investment.23 Production also

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became more concentrated as industry evolved from small shops to largescale, mechanized corporate-owned factories.24 There was a lag, however, between the growing economic strength of Rhodesia’s domestic manufacturing sector and its ability to influence pol­ icy. The Associated Chamber of Industry, which was created in 1941, proved to be a weak instrument for representing industry’s interests to government, even though the government had itself encouraged its forma­ tion.25 It was replaced in 1949 by the Federation of Rhodesian Industry, which was only marginally more successful at promoting industry inter­ ests.26 Because domestic manufacturing was still in its initial boom, firms found that a strong representative organization was not crucial to their prosperity. Thus, despite the sector’s growing economic strength, domes­ tic manufacturing still lacked the clout of the more established interests such as agriculture or commerce.27 Because they originated in different sectors of the Rhodesian econ­ omy, these three elements of the business community often came into sharp conflict with one another. Although domestic manufacturers favored government policies such as infant industry tariffs that promoted industrial development, they were often opposed by mining and com­ merce. The mines opposed aid to industry because minerals were sold on world markets where they exercised little influence over prices. Any policy that adversely affected the cost of inputs cut directly into their profitabil­ ity. Likewise, because commerce mediated across markets, it sought to lower the prices it paid to producers while increasing the prices it charged to consumers. This desire to increase competition among Rhodesia’s major producer groups made merchants, according to Colin Leys, “the traditional enemies of agriculture and increasingly the economic oppo­ nents of secondary industry.”28 These conflicting sectoral interests were forged into a coherent politi­ cal coalition by the United party (later the UFP) under Prime Minister Godfrey Huggins. Huggins first incorporated these sectors’ representative associations into the governing process by making them key conduits for distributing patronage and organizing political support. He then cemented the coalition by pursuing two overriding objectives that resolved many of the major conflicts between its members. The first of these goals was to unite the British Central African colonies—(Southern) Rhodesia, Northern Rhodesia (later Zambia), and Nyasaland (later Malawi)—into a single federal structure.29 The Central African Federation, which lasted from 1953 to 1963, transcended the inherent political and economic conflicts between commerce and industry by opening new protected markets that commerce could penetrate using

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Rhodesian manufactures. Moreover, because Rhodesia was the most developed of the colonies and possessed the best infrastructure, it was also clear that most new investment would locate there. The Federation had a deep impact on the Rhodesian economy. The manufacturing sector went through another vigorous expansion, as the number of firms increased from 700 in 1953 to 1,300 in 1957.30 Equally dramatic were the effects on commerce. Whereas in 1951 only 12.2 percent of Rhodesia’s exports by value went to Northern Rhodesia and Nyasaland, by 1964 the figure climbed to 30.4 percent.31 According to Jeffrey Herbst: Federation was a boon to the White economy because it solved the classic problem faced by a small country which is beginning to indus­ trialize: how to capture a market that is big enough for economies of scale to be achieved and at the same time protect enterprises from low cost competition which could kill industrial development in its infancy. The Federation was a brilliant solution because it gave the colony assured markets in both Northern Rhodesia and Nyasaland and access to finance from Northern Rhodesia’s Copperbelt.32

The second major issue that held the coalition of business interests together was the desire to relax the segregationist racial laws and institu­ tions that structured most aspects of the colony’s social, economic, and political life. All three segments of the business community shared a sub­ stantial interest in fundamentally reforming Rhodesian race relations. It was this common interest that would later make the business community the primary center of opposition to the Rhodesian Front government.

Business, Race, and Rhodesian Politics

Rhodesia’s racial laws were never intended to promote the strict separa­ tion of races, but to regulate economic relations between them. White Rhodesia was simply too small to create an economy and society that did not depend to a substantial degree on blacks for support. However, not all elements of white Rhodesia benefited equally from the colony’s racial laws and institutions. After World War II, disagreements over the economic consequences of Rhodesia’s racial structure were to cause a major rift between the business community and other elements of white society. The central role that economics played in Rhodesia’s race relations was apparent from the earliest days of the colony. When the mining com­ panies first entered central Africa, they confronted a significant shortage

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of labor. Wage rates high enough to attract black workers away from tra­ ditional peasant agriculture were unprofitable for the mines. To overcome this problem, the mines used their political influence to create a system of compulsory taxes and fees that forced peasant labor to seek employment in the money economy.33 Given the strong relationship between the economic interests of the colony’s politically dominant settler groups and Rhodesia’s network of racial laws, it is not surprising that the economic slump of the late 1920s and 1930s, the colony’s greatest economic crisis, was also the period when race relations became most thoroughly codified. The economic slump put white workers under intense pressure. Many businesses retrenched by employing lower cost black labor, thereby forcing white workers to either accept cuts in pay or be displaced by unskilled and semiskilled black workers. Nor could workers successfully defend their interests through collective action so long as employers could simply replace noncompliant white workers with black ones. “The more the white workman presses for higher recognition in wages and compensa­ tion,” stated A. R. Thomson, a government backbencher and former general manager of the Wankie Colliery, in 1929, “the more he loads the dice against his own employment.”34 Unable to secure their interests via the marketplace, white workers turned to the state. In 1934, under pressure from a strike in the building industry, the government passed the Industrial Conciliation Act. This act regulated collective bargaining by creating industrial boards that mediated wage agreements and whose decisions had the force of law. Significantly, the act excluded blacks from the definition of employee and did not recog­ nize African unions, thus preventing blacks from bargaining collectively with their employers. The act also gave white unions control over appren­ ticeships and stipulated equal rates of pay for white and black workers in the same job categories. These provisions denied blacks the ability to acquire skills as well as the opportunity to use the cheapness of their labor as a way to advance in the labor market.35 Despite the protests of the mines, the act applied in all urban areas and to the large mining compa­ nies, but not to agriculture. Its net effect was to create an industrial color bar that reserved high-paying skilled and semiskilled positions for white workers. According to Ian Phimister, the act

had “all the characteristics of a deal” between domestic capital and white labor. While capital formally accepted the partial exclusion of blacks from skilled and semi-skilled work, white workers, their strug­ gles institutionalized and their unions bureaucratized, gave up the right to strike.36

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The Land Apportionment and Industrial Conciliation Acts formed the central pillars of Rhodesia’s race relations. They benefited most directly a coalition of white farmers and white workers. For white farmers, these acts limited black agricultural competition and created a large pool of low-wage black labor to work the farms.37 For white workers, the industrial color bar created an artificial shortage of skilled workers, push­ ing wages to extremely high levels. In the 1950s, for example, grade A (white) workers in the mining industry received nine times the pay of grade B (black) workers.38 Less clear-cut, however, were the benefits of this system of race rela­ tions for the business community. On the one hand, all three segments clearly benefited to some degree from the discrimination against Rhode­ sia’s blacks. Industry and the mines, for instance, were able to draw on a pool of low-cost workers from the tribal reserve lands. Commerce benefited because the Land Apportionment Act, by forbidding blacks from owning or leasing property in white urban areas, also reserved the colony’s most lucrative commercial markets for white merchants. On the other hand, Rhodesia’s system of racial segregation also imposed significant costs on the business community, and after World War II, these costs came to dominate the business outlook. First, World War II highlighted the fact that high white wages adversely affected the cost structure of both the mines and secondary industry. Shortages of white labor during the war had forced many businesses to fragment skilled positions into smaller tasks and man them with semi- and unskilled black workers. This emphasized that high rates of white pay were due less to the higher productivity of white workers than to the legal structure of the labor market. For businesses concerned about their cost structure, a prob­ lem felt acutely by the mines, restructuring the labor market to allow the entry of more black workers in semiskilled and even skilled positions was a natural strategy for increasing profitability. The tremendous growth of Rhodesia’s secondary industry and its transformation from small workshops to mechanized factories during the war years had also created a severe strain on the existing system of labor relations. Rhodesia’s labor market was structured to provide a stable, highly restricted pool of skilled white workers and a large, transient pool of unskilled blacks. Black workers generally could not bring their families with them when seeking employment in white areas, in part to ensure that they would return to the tribal reserves. This pattern fit the needs of agri­ culture, which required a seasonal labor force, but not the needs of sec­ ondary industry. It required a stabilized urban work force for its largescale, mechanized factories. As a result, industry began pressing to improve black wages and living conditions. According to the director of

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one tobacco company in 1945, Rhodesia could either improve living stan­ dards for black workers and their families, or it could abandon industrial­ ization. Creating an industrial economy out of “bachelors and prosti­ tutes,” he believed, was impossible.39 Industry’s desire to improve the economic standing of its black work­ ers meshed well with the interests of commerce in the postwar years. Because consumer demand among the white community was simply too thin, commerce believed that Rhodesia’s economic development not only required seeking out new African markets (such as the Federation), but also expanding the colony’s internal market. Speaking in 1933 to the Asso­ ciated Chambers of Commerce, the governor of Southern Rhodesia stated:

Now supposing that only 25 percent of our native population increased their purchasing power from 30s to 70s per head, . . . this would mean an increase in the value of native trade of at least £500,000 per annum . . . surely then, on commercial grounds alone, apart from any moral obligation, it should be the policy to encourage the natives in the attainment of higher standards.40 In other words, one key to the colony’s future prosperity was to enhance black prosperity. Thus, industry’s desire to stabilize its work force by rais­ ing the level of black wages fit hand in hand with commerce’s desire to expand the internal market by raising black purchasing power. By the 1950s, then, the interests of the business community had con­ verged around the issue of Rhodesia’s race relations. Mining and industry could increase their overall competitiveness by fostering competition between whites and blacks in the labor market, while industry and com­ merce would benefit from the emergence of a wealthy black middle class. This convergence among the business community found political expres­ sion in the politics of “partnership” that characterized Rhodesia’s political life during the Federation era. According to Huggins, the primary archi­ tect of the Federation: We are anxious to build up this country on the basis of a partnership between the various races, not to use colour as a test of a man’s abil­ ity and culture. We can only develop and hold this country as part­ ners. In the present stage of development it is difficult for some peo­ ple to realize this, and because of the stage of development of the backward people, it is not easy for outside observers to realize that we believe in such a policy and are attempting to carry it out.41

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Likewise, speaking on the need to develop Rhodesia and create more opportunities for African employment, Colin Kirkpatrick, a director of the Rhodesian Selection Trust, proclaimed that “practically every indus­ trialist is a liberal.... Almost every leader of Commerce and Industry and Mining and Finance holds views similar to ours.”42 The “liberal” era of Rhodesian politics lasted until the victory of the Rhodesian Front party in 1962. The period was marked both by the relax­ ation of Rhodesia’s racial laws as well as by the limits to which disman­ tling the colony’s segregationist structures was truly possible. In 1957, for example, the Rhodesian government under prime minister Garfield Todd broadened the franchise specifically to include more blacks by creating a second roll of voters with lower economic and educational thresholds.43 In 1958, the official Plewman report recommended overhauling the colony’s racial land laws. It was followed in 1959 by another official report that rec­ ommended repealing the Land Apportionment Act altogether.44 Also that year, the Industrial Conciliation Act was amended to enable blacks to par­ ticipate in collective bargaining and allow multiracial unions. In 1961, a constitutional conference between Great Britain and Rhodesia (including the black National Democratic party) created a new constitution for the colony that enshrined the idea of steady African advancement. But the business community never intended for multiracial partner­ ship to mean immediate or even rapid majority rule. Rather, a prosperous Rhodesia would be achieved through a process of leveling-up, in which blacks would slowly climb the ladder of first economic and then political attainment. Creating a prosperous and enfranchised black middle class was a strategy for ensuring continued “responsible” government of the country, while simultaneously yielding to the pressures from Rhodesia’s blacks for a greater and more equitable role in the colony’s political and economic life. Driven by enlightened self-interest, the business community sought a middle path between the extremes of African nationalism and entrenched white oppression. However, the ability of the business commu­ nity to pursue this vision was severely circumscribed by the realities of Rhodesian politics, for ultimately it could neither allay the existential fears of Rhodesia’s threatened whites nor meet the expectations of the country’s increasingly restive blacks.

Business, Independence, and UDI

The early 1960s were marked by two watershed political events that had profound repercussions for the business community. The first was the vic-

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tory of the Rhodesian Front in the 1962 elections. Because of its close links to the United Federal party, the Rhodesian Front viewed the business com­ munity as its most threatening potential opponent within Rhodesian poli­ tics. As detailed in chapter 3, the Rhodesian Front immediately began using the power of office to systematically undermine the foundations of business influence. It stripped the business community’s representative associations of their role in administering government policy; contested and won municipal elections that previously had been the preserve of Rhodesia’s commercial and industrial interests; and waged a campaign of intimidation against the Rhodesia Party, the successor of the UFP and the party closest to the business community.45 The atmosphere of political ani­ mosity was so pervasive that many businesses refused to contribute openly to the RP for fear of later retaliation.46 In short, 1962 represented the begin­ ning of a new era in Rhodesian politics in which business, now excluded from power, confronted an increasingly hostile political environment. The second watershed event was the breakup in 1963 of the Central African Federation, the event that propelled Rhodesian independence to the top of the colony’s political agenda. All sides in Rhodesian politics desired independence, but for incompatible reasons. Britain sought to free itself from a difficult colony for which it was responsible, but over which it exercised little real authority. But to preserve its standing in the United Nations, the Commonwealth, and black Africa, Britain was willing to grant independence only on the basis of a constitutional arrangement that guaranteed the steady advance of black political and economic rights and eventual majority rule. This desire meshed well (not perfectly) with the interests of the business community, but contradicted directly the interests of the ruling Rhodesian Front party. The Rhodesian Front sought inde­ pendence to free Rhodesia from British meddling and entrench a system of white economic and political privilege. The years between 1962 and 1965 saw a fruitless search for a formula that could reconcile these conflicting visions. As a unilateral break with Britain became more likely, Britain responded by threatening economic sanctions. These threats resonated deeply within the business community, because all three segments of the community were acutely vulnerable to the cutoff of trade. The mines were export-oriented, selling their product almost exclusively on world markets. Likewise, trade was the lifeblood of commerce, which mediated between the Rhodesian and world markets. Finally, secondary industry relied upon trade both as a source of capital goods needed for investment, as well as to reach growing markets in neigh­ boring African countries. The growing fear of sanctions led the business community to lobby intensively for a negotiated settlement. In early 1965, a number of business

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groups presented white papers to the government outlining the dangers of sanctions to Rhodesia, as well as the depth of business opposition. One business group, the Institute of Directors, found that of the Institute’s 294 members, only 19 were in favor of UDI.47 Likewise, the Association of Rhodesian Industries (ARnI), the successor to the Federation of Rhode­ sian Industries, came out solidly against UDI and sanctions. Its white paper stated that Rhodesia has neither the economic strength nor the resources to withstand any sustained reduction or inhibition of export opportunities. Such a state of affairs would lead to a slowing down of the economy and increased unemployment, and would thereby create a very serious risk of undermining the security of tenure of Europeans upon whom the eco­ nomic stability and growth of Rhodesia must depend for the foresee­ able future.48

Moreover, ARnI found that sanctions “could cripple the economy to a considerable extent, creating unemployment and imperilling the security of Europeans in particular; could cause the long term loss of markets for certain products; [and] could render some industries non-viable and pose serious operating problems for others.”49 The report concluded, “ARnI is convinced that the risks inherent in steps which would automatically lead to the loss of current trading opportunities cannot, on the known facts, be in the best interests of the people as a whole.”50 Similar papers were pre­ sented by the Associated Chambers of Commerce of Rhodesia (ACCOR), the Chamber of Mines, and the Rhodesian Tobacco Association (RTA). All were equally pessimistic in tone.51 These warnings carried little weight. On November 11, 1965, Rhode­ sia declared itself independent from Great Britain, precipitating an esca­ lating series of economic sanctions. At a stroke, the business community’s worst fears had been realized.52

The Business Community under Sanctions

UDI and sanctions shocked the business community. They were a stun­ ning political defeat and a repudiation of its long-term vision to develop a prosperous and multiracial central Africa. Even more troubling, however, were the consequences that sanctions would have on day-to-day opera­ tions. Many businessmen worried that sanctions would force them into bankruptcy. As one senior Rhodesian businessman noted in a secret com­ munication with the British government, “there is little doubt that . . .

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those close to commercial affairs are extremely worried about the future.”53 Yet these concerns did not generate immediate pressure on the gov­ ernment to renounce UDI. First, the business community had already exhausted its political capital trying to prevent UDI. Because sanctions had not yet begun to affect the Rhodesian economy in any significant way, a strong stand against the government was unlikely to generate wide support. Thus, business leaders realized that a strategy of opposition would be successful only once sanctions began to inflict significant hard­ ships on the economy. Although Evan Campbell, the senior businessman widely believed most capable of mounting a successful challenge of the Smith government, was, in the words of Geoffrey Gibbs, “raring for a fight,” he felt it would take at least four months for matters to come to a head.54 Sir Douglas Marshall, who was traveling in Rhodesia at the time, observed that the business community “would not indicate any disaffec­ tion at least until the artisan class had begun to feel the squeeze more severely.”55 As one British diplomat in South Africa noted, “opposition to the illegal regime is organising itself (with Campbell at the centre); but various persons have emphasized to me that no early action will be pos­ sible. They have also stressed the urgent need for sanctions to bite hard and quickly.”56 The second reason why sanctions did not provoke immediate busi­ ness opposition was that fears about economic survival took precedence over positions on political matters. Even as senior members of the business community wanted sanctions “to bite hard and quickly” to open up polit­ ical space to oppose the government, they also recognized the pressing necessity to protect their individual businesses from the negative effects of sanctions. The looming loss of foreign markets, imported capital goods, and foreign exchange threatened many firms with bankruptcy. This not only increased dramatically the uncertainties that businesses faced, it also generated within the business community a strong interest in government policies that would maintain the viability of their businesses. According to the Financial Mail: A week after UDI, confusion and uncertainty abound in the business sector. In banking, agriculture, commerce and industry the story is the same. It is a confusion bom not of torn loyalties (businessmen accept the authority of the de facto government... ) but of the lack of sufficient guidance of the top.57

In addition, because outspoken opponents of the regime would be unlikely to receive government favors, fears about economic survival also

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led many businessmen to to suppress their criticisms of the government. As one senior businessman recounted, “people were so interested in mak­ ing their own businesses work that they didn’t have much time to think of revolting.”58 Rather than galvanize business opposition to the Rhodesian Front, sanctions instead generated business demands for government policies that would mitigate the harmful effects of sanctions for their indi­ vidual firms. By mid-April 1966, however, sanctions began to bite deeply in the economy. Shortages of petrol, for example, led to a decline in motor vehi­ cle sales, forcing that industry to retrench.59 The distributive trades were also hit hard as sanctions both reduced the volume of imports reaching the country, as well as forced import prices higher.60 According to the govern­ ment’s classified trade statistics, the volume of imports fell by almost 36 percent in 1966, while unit values rose by slightly over 10 percent.61 By June 1966, ACCOR found that commerce had been the sector hardest hit by sanctions and that many of the sector’s weaker firms had already suc­ cumbed.62 Moreover, it was also apparent that the tobacco auctions were not progressing well and that the government was being forced to take in con­ siderable quantities of leaf in order to maintain the level of tobacco prices. This meant not only that Rhodesia’s foreign exchange reserves (and hence the business community’s ability to import) would be severely strained, but also that the financing of the subsequent year’s tobacco crop was now in question. ACCOR’s 1966 annual report, issued in June of that year, stated that “even if the whole of this year’s tobacco crop is sold at reason­ able prices, commerce will not be able to give credit on the previously established scale.”63 Because commerce was the major provider of credit to the agricultural sector, most businessmen considered it critical that the government settle before committing to finance another tobacco crop. By June 1966, the growing economic dislocations from sanctions enabled business leaders to begin pressuring the government for a settle­ ment. In his annual address to Rhodesia’s associated chambers of com­ merce, ACCOR president John Hughes delivered a thinly veiled threat to the government that commerce could not be expected to save agriculture from its plight:

The current holding operation is biting into the cash reserves of busi­ ness. We know that some farmers will have difficulty in paying all their debts this year, and I believe that the biggest economic problem facing the country at the present time is one of credit for the coming agricultural season . . . [but] we cannot give them what we do not have.64

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Two weeks later a delegation of high-level businessmen, including the for­ mer RF prime minister, Winston Field, urged Smith in a private meeting to settle within two months.65 When efforts to settle in the Tiger talks failed in December 1966, busi­ ness and industrial leaders urged Smith to undertake a new initiative.66 Their pleas were echoed in January 1967, when several anonymous busi­ nessmen took out a full-page newspaper ad asking the Smith government to reopen talks with Britain.67 In April 1967, several members of the busi­ ness community established the Forum, a business group that eventually grew to approximately 1,900 members, including some who were members of the RF.68 The Forum eschewed an open political challenge to the RF government, preferring instead to work quietly behind the scenes to pres­ sure the British and Rhodesian governments into a settlement.69 In January 1968, these pressures became open as the Tobacco Trade Association (TTA), which represented the commercial interests of the industry but not the growers, issued a statement calling on the government to settle: “Irrespective of the ineffectiveness of sanctions elsewhere in the economy, there is no doubt that the industry in which we are engaged is in the gravest danger.” Thus, it urged the government “to exert every endeavor to bring negotiations to a swift and honorable conclusion.”70 This made the TTA the first business group to support publicly the Forum and its efforts to pressure the government into a settlement. In June 1968, in a speech to ARnl’s annual congress, its president William Perry warned that Rhodesia’s economic progress required a return to normal trading. His attacks on the government were echoed by other industry speakers to a great deal of applause.71 Business opposition to the Smith government climaxed in late 1968 when the Fearless talks failed to produce a settlement. This was the second major attempt to reach a settlement, and the terms offered by Britain were extremely favorable to Rhodesia as they delayed the onset of majority rule by at least ten to fifteen years. As a result, many businessmen felt that the government had missed a significant and perhaps final opportunity to end sanctions.72 Two of Rhodesia’s most distinguished businessmen, Evan Campbell and E. S. “Bob” Newson, responded by publicly attacking the govern­ ment. Campbell, chairman of Standard Bank and former high commis­ sioner for Rhodesia, berated Smith for not settling because “while we are presently able to export in a devious way a certain amount of our produc­ tion ... we are just able to keep our heads above water—allowing the economy to tick over.”73 Newson, chairman of Rhodesian Iron and Steel Corporation, accused Smith of risking economic disaster. Smith’s failure

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to achieve a settlement, he claimed, would “ruin the country’s tobacco, chrome, asbestos, and ferro-alloy industries, and ensure the promising nickel industry would be still-born.”74 These attacks posed the most serious public internal challenge that the Smith regime had yet faced. Campbell and Newson were among the most senior and respected businessmen in the country. Campbell was a key leader of business opposition. Immediately after UDI, Campbell had been in secret indirect contact with the British government to probe the outlines of an acceptable solution to the crisis.75 He was quietly involved with most opposition efforts by the business community to pressure for a settlement. According to another senior businessman, Campbell “was try­ ing to ride every horse there is.”76 Other senior business leaders were also planning to take public stands against the government and its failure to reach a settlement.77 Moreover, the Rhodesian Front’s economic and political survival now depended upon the cooperation of business. The mines were a critical source of foreign exchange. Commerce maintained Rhodesia’s links to external markets and financed the country’s belea­ guered farmers, a vital RF constituency. Secondary industry both supplied goods lost to sanctions and provided jobs to white workers, another key constituency.78 Most troubling, Campbell’s and Newson’s attacks threatened not only to rally the business community against the government, but to find a receptive audience among many of the RF’s supporters. Rhodesia’s farm­ ing and tobacco interests were intensely dissatisfied with government pol­ icy and the economic crisis in the countryside and now desired a way out. According to Welensky, there was now “a great deal of dissension within the R.F. [and] many people within the Front were becoming worried about the closing of the sanctions net.”79 “What is very clear,” the Guardian likewise reported, “is that a vast number of Rhodesians are des­ perately wanting an end to it all. This desire has spread from business quarters to the formerly intransigent farmers.”80 In addition, the RF’s more moderate supporters were also alarmed by the growing agitation within the RF’s right wing to impose a Rhodesian version of racial apartheid. The result of these currents was that the Smith government now faced the very real threat of the breakup of the Rhodesian Front and the emergence of a new centrist challenge. Maintaining the internal unity of the Rhodesian Front had become Smith’s most daunting political prob­ lem. As the Gemini News Service observed:

There is not a little nervousness in the [RF] hierarchy about the pos­ sibility that anti-Front elements might find common cause with “left

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wing” Front dissidents to form a new progressive party with a policy similar to the non-racialism of Sir Edgar Whitehead. Such a party, whose aim would be a settlement with Britain on the lines of Mr. Wilson’s Tiger constitution, would find considerable sup­ port among business and professional men seriously hit by sanc­ tions—and large numbers of leaderless middle-class Africans.81 In short, if allowed to snowball, strong public opposition by the business community jeopardized not only Rhodesia’s ability to resist sanctions but the Rhodesian Front’s own political survival. Smith responded by viciously attacking Campbell and Newson in a speech that the Rhodesia Herald termed “government by intimidation.” Smith accused Campbell and Newson of treason. He alleged that they had divulged secret information, aided Rhodesia’s enemies, and wanted to raise the flag of surrender.82 Smith’s attack made clear that the govern­ ment would not tolerate open business dissent and would retaliate against any business leader who publicly opposed it. This threat cowed Campbell and Newson into submission. When asked by a liberal politician close to the business community why he did not respond to Smith’s attack, Evan Campbell replied, “They would have shut down [my] bank.”83 Smith’s threat also caused other business leaders to abandon their plans to pub­ licly oppose the regime. According to the Financial Times, “Both men were subjected to an attack unprecedented in Rhodesian political and business history ... the bitterness of [Smith’s] attack on the business community should silence anyone who thought of following the Campbell and New­ son example.”84 Smith’s attack on Campbell and Newson thus sounded the death knell of the business community’s opposition, for if the captains of industry would not challenge the regime, neither would its lieutenants.85 Business opposition, which had taken three years to gather momentum, collapsed like a house of cards. After 1968, the business community largely shrank from open chal­ lenges of the government. Although business renewed calls for a settle­ ment after the failure of the Smith-Home agreement in 1973 and the out­ break of the Chimurenga war, its protests never regained their former momentum. As was the case with tobacco, business demands became self­ limiting, focused on day-to-day matters of operation, while scarcely touching on the larger political issues concerning Rhodesia’s future. By defeating the business community, the government scored a major politi­ cal victory over its strongest opponent within the Rhodesian political sys­ tem. Although business continued to privately oppose the government, according to one senior businessman, “there just wasn’t any point in pur­ suing the matter.”86

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Explaining Business Quiescence

Three factors explain the pattern of the business community’s opposition to the Rhodesian Front and its ultimate failure to mount an effective chal­ lenge to the Smith government. First, as with tobacco, the government established early in the crisis a reputation for retaliating harshly against any who sought to mobilize political opposition against the regime. Sec­ ond, the government responded to the economic challenges of sanctions by changing the institutional structure of the colony’s markets in ways that both increased business’s economic dependence on the government and created substantial conflicts of interest among different segments of the business community. Both became important instruments that enabled the government to control the political behavior of business actors. Third, the government exploited the differential effects of sanctions on the different sectors of the business community, especially the substantial benefits that sanctions now brought to some sectors, to prevent the business commu­ nity from speaking with one voice. The Threat of Government Retaliation

The first factor that explains business quiescence was the Rhodesian gov­ ernment’s clear intention to retaliate harshly against any who posed a credible threat to its political interests. The Rhodesian Front was highly distrustful of the business community. It suspected that business might not only lobby against it politically, but use its powers over investment, employment, and finance to impose significant penalties on the govern­ ment for provoking sanctions. One of its first responses to sanctions was therefore to promulgate a number of far-reaching emergency power laws that gave the government the legal authority to intervene in almost every aspect of business affairs. The Emergency Powers (Control of Corpora­ tions) Regulation allowed the government to take over any company that it deemed to be acting contrary to Rhodesia’s interests. The Emergency Powers (Investment of Blocked Funds) Regulation ordered that any profits, dividends, interest, or rents normally paid to citizens of “desig­ nated countries” would now be paid to a government-administered Blocked Funds Trust and not be retained by the individual company.87 The government also passed Control of Goods and Services Regulations that enabled it to regulate the production, treatment, storage, purchase, use, or consumption of any “movable property of any description whether grown, mined, manufactured or otherwise processed.” Companies unwill­ ing or unable to comply with orders to supply goods and services faced being taken over by the government to the extent necessary to fill the

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order.88 Manpower control orders prohibited any firm from discharging employees without the consent of the minister of commerce and indus­ try.89 Prices were controlled by the Emergency Powers (Price Control) Order promulgated almost immediately after UDI, which controlled the prices of thirty essential items.90 Moreover, the government showed no qualms in exercising its new powers. In an early showdown, the Rhodesian Iron and Steel Company threatened to discharge approximately 200 workers made redundant by sanctions and the loss of the Zambian market. On January 23, 1966, the government assumed control of the company’s Redcliff plant, giving the minister of commerce and industry sweeping powers to regulate produc­ tion there. Not only could no employee be discharged without the minis­ ter’s consent, but any employee found not to be carrying out his duties could be fined up to £500 or imprisoned for two years or both.91 By Janu­ ary 29, the government had assumed control of eight companies.92 The government’s willingness to play hardball over issues of indus­ trial activity emphasized the dangers of not cooperating with the govern­ ment and soon brought other businesses into line. Rather than risking government seizure, Dunlop Tyre, for example, put redundant labor to work growing vegetables on an empty patch of land outside its Bulawayo factory.93 Even the mining companies soon fell in line, even though gov­ ernment’s need to attract foreign and domestic investment in this crucial sector made them less vulnerable than other business interests to retalia­ tion.94 One mining company executive recalled that well after 1965, the government threatened to nationalize his company. This threat was sufficient to ensure that his company maintained good relations with the Rhodesian government, even though privately it disapproved of Smith and UDI.95 To seize control of a company, however, was a drastic and costly step that the government only rarely exercised. Many companies were too important to the Rhodesian economy to risk a government takeover. The same was not true, however, for the individual businessmen who ran these companies and who were also open to government retaliation.96 For example, when the failed Tiger talks prompted Frank Clements to try to build the Reconstruction party to challenge the RF, his coconspirators included Neville Bertram, a highly respected businessman who was later instrumental in founding the Forum, and Evan Campbell.97 Both were acutely aware of the government’s treatment of Clements once his foray into the political arena came to light and hence the government’s extreme sensitivity to any attempt to mobilize a credible political opposition. This knowledge shaped their later political activity. When Bertram created the Forum a scant two months after Clements’s expulsion, he designed it to be

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an “entirely non-political” group whose intention was not to challenge the government but simply to “arouse movement of public opinion in favour of a return to the Tiger.” Even so, when members of the Forum at their inaugural meeting proposed publishing a memorandum giving their names, Campbell, who was chairing the meeting, would not permit his name to be used. He had consulted the head offices of Standard Bank and Fisons and was under instructions not to take part in political activities.98 In fact, fear of government retaliation was such a powerful deterrent to political activity that it exasperated the British High Commission in Salis­ bury, which had hoped that the business community would produce a per­ sonality strong enough to create a credible opposition to the Smith regime. In one letter to the Commonwealth Office, John Hennings of the British High Commission discussed the political failings of one group of business­ men, bitterly complaining that the “claim that if any of them made any noises of public disapproval of the regime they would at once be arrested is the classic excuse of so many people here for not doing anything because they don’t really want to, because the lotuses are fresh and sweet to eat. But they would like to be heroes—if they could be safely.”99 New Market Institutions

The second set of factors that explain business quiescence in the aftermath of sanctions involved the government’s ability to restructure the market in ways that both increased business’s dependence on the government and generated substantial conflicts of interest among this community. The most important market mechanisms created by the government to ensure the political loyalty of business actors were its rules for allocat­ ing foreign exchange. The loss of foreign exchange was the most common threat that sanctions posed to the business community. The mines and industry relied upon foreign exchange for critical capital goods and to finance new ventures, while commerce needed foreign exchange to import from world markets. Not only had sanctions made foreign exchange extremely scarce, they also threatened many firms with bankruptcy. The critical importance of foreign exchange to most businesses and the high degree of uncertainty about the colony’s export earnings thus generated business demands that the government create a “fair” (i.e., nonmarket) mechanism for allocating this now very scarce and valuable input. The government responded to these demands in two ways. On the one hand, it created a system that rationed scarce foreign exchange among established users.100 For each quota period (which varied between four and six months), the Treasury would provide the Ministry of Commerce and Industry with a set amount of foreign currency available for imports.

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The Ministry would then solicit detailed bids from ACCOR and ARnI regarding their import requirements over the period, determine funding priorities between the two sectors, and set the amount of foreign exchange each would receive. Once funding priorities were set, the actual allocation of foreign exchange to the individual firms was delegated to the sectors’ representative organizations. In the case of commerce, ACCOR provided individual merchants with foreign exchange certificates based upon their performance as importers in 1964-65. Allocations in the industrial sector were similar, except that the government reserved the right to have “the final say in determining priorities for individual firms and the minimum allocations to be made to [industrial] divisions.”101 Once the individual merchant or industrialist received an allocation, he presented his certificate to the Ministry of Commerce and Industry’s Import/Export Licensing Office to obtain a license for importing goods into the country. On the other hand, because the government recognized that this system might not provide investment for important new projects, it also awarded special foreign exchange allocations directly to firms seeking to enter new markets. Merchants could gain direct allocations of foreign exchange if they could import goods more cheaply than the current importer. The bulk of the allocations, however, were used to promote Rhodesia’s indus­ trial expansion, which was now critical for replacing goods lost to sanc­ tions and maintaining white employment.102 These mechanisms proved extremely effective in stabilizing Rhode­ sia’s foreign trade. Rhodesia ran trade surpluses in every year after UDI except 1968. By channeling all imports through a single authority, the government could ensure that scarce foreign exchange was not spent on goods that either could be manufactured inside Rhodesia or were consid­ ered nonessential.103 According to the Commission of Inquiry on Import Control, the system:

• made considerable economies in the importation of goods into Rhodesia • resulted in the volume of manufacturing production nearly doubling • stimulated diversification in local production and encouraged ingenuity • reduced to a minimum the number of business failures by ensuring continuity of supplies to approved firms • permitted the available currency to be distributed to the greatest advantage of national needs and, on the whole, in an equitable manner

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• took full advantage of such expertise as was then available by ensuring the cooperation of the private sector104

The government’s allocation of foreign exchange dampened collec­ tive political opposition among the business community in at least four ways. First, because the government could withhold a currency allocation or import license from an individual firm, it gained a powerful tool for punishing businesses that went too far in opposing the government. Few businesses were willing to risk these valuable inputs for the sake of pres­ suring the government to give in to sanctions. The British High Commis­ sion in Salisbury attributed the political reticence of the commercial sector directly to “the fear that anybody who speaks out against the regime may be discriminated against so far as his import quota may be concerned.”105 This analysis was echoed by a prominent businessman, who later explained that business refused to protest strongly against the government “because government has a life and death hold over you. It can cut off your supplies and foreign exchange.”106 Second, this system also enabled the government to discourage politi­ cal opposition by rewarding compliant political behavior. On the one hand, the special allocations of foreign exchange enabled the government to determine which firms got new projects, and hence would or would not grow. The government used its discretion in awarding allocations to build networks of political support among the business community. In particu­ lar, the government targeted the industrial sector because of this sector’s now critical role in maintaining employment and replacing goods lost to sanctions. According to a former senior ARnI official: “Industry expanded like anything. It was greatly fostered by the government. In fact, the gov­ ernment went out of its way to foster everything we did.”107 Ties between industry and government became extremely close, leading Jurick Goldwasser, the president of the Bulawayo Chamber of Industries, to complain in 1971 that government intrusion into industry verged on control.108 The government built similar ties with commerce, again offering access to scarce foreign exchange in return for political support.109 In 1967, for example, H. M. Barbour found himself unable to import quality goods for his upscale department store (described by Hennings as the Har­ rod’s of Salisbury) and pressed the minister of commerce and industry for an allocation. He received the allocation on the minister’s personal authority, but only after contributing to the RF’s funds.110 More gener­ ally, the government’s ability to determine which firms received lucrative allocations created strong incentives for many to join ranks with govern­ ment. According to Hennings of the British High Commission, the lucra-

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tive opportunities created by sanctions led to the emergence of a “new and not insignificant sector” of the commercial community, “a sort of com­ mercial new establishment which is with the regime boots and all. These are people like Cambitzis, Margolis, Divaris, the Landaus who have made a pretty killing out of the present situation.”111 As one merchant who openly supported the government later recounted: “It was clear that who­ ever got to trade was going make a lot of money.”112 Thus, it is not sur­ prising that the Financial Times found by the early 1970s that the RF was receiving considerable business support.113 On the other hand, the government also rewarded compliant behav­ ior by defining the rules that governed currency allocation in ways that gave business strong vested interests in the present system. Normal quota allocations were based on a firm’s import performance in 1964-65, thus allowing a firm to retain its allocation year after year. The government also made the allocation tradable. If the firm did not wish to use its alloca­ tion for that period, it had the right to sell it to others who would. These rules made the currency allocation a very valuable asset to the firm. According to a Rhodesian Commission of Inquiry into Import Control: It was the then view of the Government’s legal advisers, and still is, that it is not illegal to sell an import allocation. This view was expressed as follows, ‘Such allocations are made without any precon­ ditions as to transferability and as they constitute movable property they may clearly be sold. Needless to state, there is no statutory or regulatory restriction on their sale.’ Consequently, the “rights” to reg­ ular allocation have in many instances freely changed hands over the years since 1964/65.114 Firms vested with allocation rights were guaranteed a steady stream of income. Either they could use the allocation to import goods of value, or they could sell it to other importers. Because of its scarcity, trade in foreign exchange was quite lucrative and often changed hands at premiums well above the official central bank rate.115 According to the Commission of Inquiry, “There are merchants who, at the moment, quite legally live off the proceeds accruing from their allocations and contribute little or noth­ ing to the economy.”116 According to a South African business journalist who covered Rhodesia, “In UDI the quota was where you made money if you had a track record. And, you could always sell it if you got in trouble or so.”117 These strong vested interests among the business community had pro­ found consequences for outspoken political opposition. They not only made individual businesses vulnerable to government retaliation, but the

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business community as a whole. Strong and outspoken political opposi­ tion by some members of the business community might prompt the gov­ ernment to change its allocation rules in ways that harmed all who had a stake in the present system. The effect was to attach a strong negative externality to the act of political opposition. This externality transformed political opposition from an act in which a few vocal opponents spoke on behalf of a larger silent majority within the business community into an act that now presented an even more immediate threat to the interests of the community at large. This transformation generated a powerful norm among the business community not to “rock the boat” and to “leave poli­ tics to politicians,” because those businessmen who did enter politics put not only their own livelihoods at stake, but the livelihoods of their silent colleagues. Consequently, outspoken opposition of the government often made one a social outcast, which, according to one prominent liberal, was one of the most effective “sanctions” that encouraged political confor­ mity.118 Third, the government’s control over foreign exchange enabled the government to coopt the business community’s representative associa­ tions. Both ARnI and ACCOR benefited greatly from the foreign exchange system. On the one hand, both organizations were able to strengthen control over their constituent members by controlling the actual distribution of foreign exchange. On the other hand, both organi­ zations profited from the system because they levied fees on the allocations they made. Interestingly, this practice was probably illegal but tolerated by the government. According to the Commission of Inquiry:

The practice of ACCOR in levying fees for making allocations on a sliding scale so that the greater the allocation to be made, the higher is the levy, is illegal.... If ACCOR and ARnI were to impose a uni­ form levy in every application for an import allocation based on the overall cost of administering their allocation systems, no problem would exist, of course, because they are entitled to charge for services rendered.119 By creating a vested interest on the part of the business community’s representative associations, this system rewarded them for being “nonpo­ litical.” According to one former industry official, it was the duty of the national economic organizations to get along with whatever government was in power, even the Smith government.120 The representative associa­ tions thus became conduits through which the government dictated its interests to business.121 This denied the business community a strong plat­ form from which to pursue a policy of opposition and even made business

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protests somewhat self-censoring. When ARnI urged Smith in the fall of 1968 to make “further extreme efforts to resolve existing differences” and settle with Britain, it first cleared its statement with the government!122 Consequently, rather than being faced with the prospect of having to micromanage the political affairs of business, the government could rely on the representative business organizations to restrain their members. Fourth, the government’s system for allocating foreign exchange undermined collective political action by generating substantial conflicts of interest within the business community between firms who received for­ eign currency allocations and those who did not. For example, the Com­ mission of Inquiry on Import Control noted that some businesses withheld imports from competing firms which did not possess currency allocations, while others would “only supply imported goods if the customer is pre­ pared at the same time to take a certain number of locally manufactured goods. In other words, they indulge in economic blackmail.”123 Nicholas Cambitzis, the chairman of the Industrial Development Corporation, complained at ARnl’s 1972 annual congress: Perhaps we should be challenging some of the accepted principles. “Past performance” have been the magic words for nearly seven years, but what relevance does a company’s 1965 buying pattern have in 1972? Can we afford to perpetuate a system where the Government has the power to license people to make a profit or exclude newcom­ ers from activities with a profit potential?124 The possibility that firms might be denied a currency allocation raised the level of distrust between them. Fearing that they could lose out if competi­ tors received currency allocations at their expense, firms monitored closely the foreign currency allocations to ensure no “cheating” took place. According to a senior ARnI official of the time, “The distribution was done in a very good way. There was no fiddling of the books. There couldn’t be, because all were wary to see that they didn’t get an unfair pro­ portion. So it was all based on past performance. ”125 By seeding serious conflicts between firms over the distribution of foreign exchange, the gov­ ernment also impeded their ability to act collectively on larger issues. Thus, the very structure of the foreign exchange system created a pattern of incentives that divided firms and raised the level of mistrust between them, weakening their ability to pursue a collective policy of opposition. In addition to foreign exchange controls, the government also created other market mechanisms to control the behavior of companies. In the mining sector, for example, the government was clearly worried that the multinational mining companies would drain Rhodesia’s economy and

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deny it much needed foreign exchange by under-invoicing their mineral exports (selling output to foreign parent companies at artificially low prices to transfer profits out of the country). The government responded by instituting tight marketing and exchange controls. For example, when the United States sought to prohibit the Union Carbide company from shipping chromite from its Rhodesian operations to Mozambique, the Smith government forced the company’s Rhodesian subsidiary to sell its production to Universal Exports (Univex), a state-controlled trading cor­ poration. It also took similar action against another U.S. firm, the Foote Mineral Company.126 Under the new arrangements, Univex now acted as a marketing agent for chromite. It took control of the company’s chromite and sold it on world markets at prices slightly below world levels.127 Univex’s price to Union Carbide was the price Univex received on the world market, less a 2Yi percent commission. According to one official, this sys­ tem made Univex a very profitable company, enabling it to return $400,000 to the Treasury, in addition to building a reserve of $400,000 to cover cash flow. Moreover, it also stopped Union Carbide from underinvoicing its shipments, which, the official maintained, was Union Car­ bide’s practice prior to Univex’s takeover. Said the official: “Union Car­ bide New York was furious at the prices Univex demanded. But when we threatened to sell to the Japanese instead, Union Carbide relented.”128 Although the government did not institute similar marketing arrange­ ments for every mineral mined in Rhodesia, it kept close tabs on the min­ ing companies to ensure that they acted in the government’s interest.129 As one former Ministry of Mines official recounted: “We were very national­ istic. Rhodesia was basically independent since 1923 and very independent during UDI... We didn’t let the [mining] companies get away with any­ thing. The companies were always closely monitored.”130 The net result of the new political structure of Rhodesia’s markets was that the business community became almost impervious to attempts to organize it politically, even though most businessmen held political preferences at odds with the government’s. The government’s clear will­ ingness to retaliate against anyone who openly challenged the regime, combined with the new market structures that made business highly vul­ nerable to government action and rewarded political compliance, led busi­ nessmen to consciously retreat from the political arena. One consequence was that political protest became anonymous. Although the twelve busi­ nessmen who comprised the Central Executive of the Forum made them­ selves public, the rank-and-file membership was secret. RF sympathizers of the Forum were particularly vulnerable as the party often warned its membership not to associate with the “nonpolitical” Forum. Evan Camp­ bell likewise refused to allow his name to be associated with the Forum

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and distanced himself from its activities.131 Another consequence was that only “apolitical” protests that did not threaten the government drew busi­ ness support, because these were the only types of protests that would not incur government retribution. The Forum, which was one of the strongest platforms for business protest, went to great lengths to explicitly deny any political intentions. When the local chairman of David Whitehead (a clothing and textile firm) was spotted talking to politicians, the Forum promptly expelled him from its ranks.132 It also repeatedly pledged its pub­ lic loyalty to the Smith government and stressed the nonpolitical nature of its activities. According to the group’s statement of aims (emphasis in orig­ inal): • the forum has no intention of becoming affiliated to, or connected with, any political body. • the forum discountenances the formation of any new political party in circumstances of economic war. It is convinced that the only way to a speedy settlement is through the present Government. • Once such a settlement is reached, the forum will have achieved its object and there will be no longer any need for its continued exis­ tence. 133

In fact, the Smith government clearly sought to use the Forum’s vul­ nerability to retaliation not only to set the parameters of the Forum’s political activities but even to transform it into an agent of RF interests. In a May 1968 meeting, Smith warned six members of the Forum’s executive against trying to mobilize pressure on the regime, suggesting instead that the best target of its activities should be Britain. According to the Forum’s notes of the meeting, Smith told them “that The Forum was considered by some of his Party to be on the left and, although he himself always consid­ ered that The Forum had acted responsibly, any action on the local scene could be misinterpreted. He thought that the right place for The Forum to exert any influence was in Britain.”134 Given the government’s earlier treatment of Clements, Smith’s remarks can only be interpreted as an implicit threat to retaliate against any attempt to mobilize domestic polit­ ical pressure on the Rhodesian government. In fact, Britain had long sus­ pected that Smith was manipulating the Forum, not to help generate domestic support for a settlement that would include moderate members of the RF who were now willing to settle, but rather to use the Forum’s extensive ties in British business circles to “exert their influence in the United Kingdom and on the Governor to put pressure on Her Majesty’s Government.”135 Britain’s response was to bluntly tell the Forum that “if

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the Forum wish to exert influence towards a settlement, they should do so in Rhodesia and on the regime.”136 In the end, the Forum’s unwillingness to enter the political arena to oppose Smith was the fatal flaw in its strategy. As Hennings of the British High Commission noted:

The basic flaw in the Forum campaign is that it seeks to operate by supporting the regime in any effort it makes for a settlement. Smith, I fancy, knows already that he could count on the commercial commu­ nity to support a settlement and this means that the Forum offer him nothing he does not know he can count on already. And since the Forum does not say what it will do if the regime are not energetic in seeking a honourable settlement they proffer no threat to Smith of the consequences of tagging along with his present colleagues.137 By mid-1968, the Forum realized the basic flaws in its strategy. This prompted one member of the Forum’s executive, B. W. S. O’Connell, to decide “that in the future their policy should be to debunk him [Smith] with the idea of removing him from his present political eminence” and to unite publicly with other groups opposed to the Smith regime.138 Creating a united opposition, however, proved impossible. The Forum, and business interests generally, refused to publicly support the various liberal parties such as the Rhodesian Constitutional Association (RCA) or Centre party that directly challenged the Rhodesian Front in the political arena, even though these parties espoused many of the views held by business.139 For example, in early 1968, Bob Williams, the leader of the RCA, proposed merging his group, the Forum, and other dissent groups within Rhodesia into a single organization. The proposal was unani­ mously rejected by the Forum’s executive, which argued that only a “non­ political” movement could attract dissatisfied supporters of the Rhodesian Front.140 Nor did the Centre party fare better with the business commu­ nity. In fact, the Centre party’s inability to raise sufficient financing from within Rhodesia at one point prompted it to approach the British govern­ ment for financial support, even though it understood very well that such support, if it ever came to light, would utterly destroy the party’s standing in Rhodesia.141 As a result, the liberal opposition parties were unable to draw public support from their most powerful potential supporters within the Rhodesian political economy. This isolated the various liberal parties on the fringes of the political spectrum, a consequence that not only left the business community without a viable political organization to pro­ mote its collective interests, but also bolstered the democratic “creden­

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tials” of the Rhodesian Front. The Smith government pointed to the vocal but electorally unpopular and isolated liberal parties as “proof’ that the country was both democratic and solidly behind the RF. As one liberal opponent bitterly reflected, “We did Smith a real favor.”142 The Differential Effects of Sanctions

The third factor that explains business quiescence under sanctions is the differential impact that sanctions had on this community. Over the short term, the effects of sanctions were fairly uniform, as all three sectors of the business community posted declines in economic activity. Within two years, however, industrial activity in Rhodesia began picking up, followed by commercial and mining activity soon after. Economic recovery affected different sectors of the business community differently, a fact the govern­ ment exploited to prevent it from speaking with one voice. In the mining sector, for example, sanctions caused the value of domestic mining output to stagnate between 1966 and 1968 at around $66 million, before jumping some 30 percent in 1969. Over the next five years, the value of production in the mining sector would skyrocket by almost 18 percent per year.143 In terms of trade, the sanctions’ most lasting impact was on the volume of exports from the mining sector. In 1966, the mining exports fell 11 percent from 1965 levels. They continued to fall until 1969, when they were nearly 24 percent below pre-UDI levels. Thereafter, the volume of mining exports recovered, but by 1978 had still not reached its level prior to UDI.144 Much of this lag was not due to sanctions, but to the fact that under sanctions many of Rhodesia’s mining companies began to refine their own ores into higher valued metals, a process called benefaction.™5 These exports were tallied separately in the government’s official trade statistics. For example, while exports of chrome ore fell 76 percent between 1965 and 1968 (from 635,100 metric tons to 151,900), exports of ferrochrome over the same period rose by 108 percent (from 21,326 metric tons to 44,339). In 1965 Rhodesia earned $7.6 million dollars from chrome ore exports and $3.4 million in ferrochrome. By 1975, however, this relationship had reversed. That year Rhodesia’s earnings from chrome ore were $6.8 million, while its earnings from ferrochrome had skyrocketed to $40.7 million.146 Moreover, sanctions had only a transient effect on export prices. In 1966, the unit value of mining exports fell by just under 6 percent and slowly climbed until 1968, when export prices in the mining sector exceeded pre-UDI prices by some 4 percent. By 1969, the mining industry had recovered. That year the total value of mining exports reached $53.2

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million, surpassing for the first time the $51.5 million in exports the sector earned in 1965.147 In fact, sanctions had little lasting impact aside from the close gov­ ernment monitoring of the mining sector’s activities. By late 1967, the Financial Times was reporting that the mines were exporting without difficulty.148 Rhodesia also had little trouble developing its nickel industry under sanctions. The value of nickel metal exports grew from zero in 1966 to $18 million by 1970.149 The mines were also able to raise financing from international lenders. One official recalled raising money from Swiss and South African banks to finance several new foundries. The terms of the loans, he maintained, were not out of line for the type of business venture, and there was little or no thought given to the political risks of sanc­ tions.150 When asked about the effect of sanctions on the mining industry, the former head of one mining company replied, “there’s nothing to tell.”151 The failure of sanctions to make a lasting impact on the mining sector is due to a number of factors. One was the extremely high quality of Rhodesia’s mineral deposits. Its metallurgical grade chromite had a chrome oxide content in excess of 48 percent, its asbestos had exception­ ally long fibers, and its lithium ore had a low iron content.152 Another was proximity to South Africa. Many Rhodesian minerals were exported under South African certificates of origin. The multinational character of the mining firms may have also helped them maintain informal (and per­ haps even formal) contact to world markets. Finally, the passage of the Byrd amendment in the United States in 1971, which allowed the United States to import strategic minerals from Rhodesia, opened a tremendous loophole in the UN sanctions orders, providing Rhodesia with a large and ready market for its mineral output. The mining sector, like tobacco, was potentially a big loser from sanc­ tions as its markets were concentrated overseas. Unlike tobacco, however, sanctions on Rhodesia’s mineral exports proved largely ineffective.153 The failure of sanctions to damage this sector deeply also weakened its incen­ tives to strongly oppose the Smith government. Like the national eco­ nomic organizations, the mines sought to maintain good relations with whatever government was in power and to remain neutral in the Smith government’s political conflict with Britain. Commerce, like mining, also stood to lose substantially from sanc­ tions because trade was a central part of its business. It more than any other segment of the business community bore the initial brunt of UDI. By the late 1960s, however, many merchants had actually begun to profit enormously from the opportunities created by sanctions. For example,

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merchants holding currency allocations could either import scarce goods into the Rhodesian economy or trade their allocations at a premium. Moreover, in the early days of sanctions, the government often rewarded successful “sanctions busters” with special currency allocations amount­ ing to 10 percent of the foreign exchange they earned by selling Rhodesian exports on world markets.154 In the tobacco market, the Tobacco Corpo­ ration allowed Rhodesian tobacco merchants to buy stockpiled leaf offthe-shelf at the Corporation’s reserve price and sell it on world markets at just below the world price. Thus, by mediating between Rhodesian and world markets, merchants could reap the often substantial differences between world and domestic prices.155 This had political consequences. As we have seen, the fact that many merchants benefited from sanctions not only weakened their willingness to oppose the government, it encouraged some to throw in with the regime. The most dramatic transformation within the business community, however, occurred in the industrial sector. Sanctions, coupled with the government’s limiting imports in order to avoid a foreign exchange crisis, raised a protective barrier around Rhodesia’s secondary industries. This, in turn, caused the industrial sector to boom. Between 1963 and 1970, the number of products produced in Rhodesia expanded over sixfold, from 602 to 3,837.156 At first, many of the new industries in Rhodesia were “backgarden variety,” creating shoddy consumer products that were no longer readily available because of sanctions. Soon, however, “six of the nine fastest growing industries [were] infrastructure industries such as chemicals and petroleum, construction and steel productions . . . which provide the basis of future industrial expansion.”157 By 1970, the Times reported that it was clear that industry was undergoing a remarkable expansion, causing some bottlenecks in the economy. The railways, in par­ ticular, suffered from a severe capacity constraint, making them the butt of a common joke that “the railways are worse than the sanctions.”158 By 1974, secondary industry had expanded to 24.7 percent of GNP, up from just 17.9 percent of GNP in 1966.159 The remarkable expansion of secondary industry behind the protec­ tive barrier of sanctions had a profound impact on the behavior of firms in this sector. First, the level of competition in the manufacturing sector fell dramatically over time. Companies used the rising cost of imports as an opportunity to raise their own prices.160 Moreover, many of the new industries created in the aftermath of sanctions were monopolies. Sitting behind high tariff and sanctions barriers, many companies often preferred to produce complacently for the captive Rhodesian market rather than aggressively seek to export to South Africa and other overseas markets. In

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1970, for example, the minister of commerce and industry, Jack Mussett, found it shocking that South African buyers were finding a lack of sales initiative at a Rhodesian trade fair. Scolding the Rhodesian producers, Mussett said:

It is vital that we export everything we can and no opportunity should be lost in following up inquiries on exports. It is narrow minded pol­ icy not to support the Trade Fair. It is the shop window of Rhodesia. The day must come when there will be greater competition and man­ ufacturers will have to go out and look for orders.161

In 1972, even ARnI was complaining that most secondary industries were showing little desire to export. According to an ARnI study, although 978 members had surplus capacity for exporting, very few were actually inter­ ested in doing so.162 Not only did industry become complacent, it also became highly pro­ tectionist. By 1970, an estimated 65 percent of the manufacturing sector’s products were probably uncompetitive at free-trade prices.163 The vulner­ ability of the manufacturing sector to a return to free trade or a lifting of sanctions had a profound influence on its political behavior. Not only did it press for preferential treatment from the government in terms of raising tariffs or obtaining foreign exchange allocations (often at the expense of other sectors), but it also began forging closer ties to a government that had previously been its principal opponent. By the early 1970s, the RF was receiving considerable business support.164 Moreover, the manufacturing sector’s interest in maintaining protec­ tive barriers around the Rhodesian economy also affected its attitude toward sanctions. When Rhodesia and Britain sought to settle in the Smith-Home agreement of late 1971, the Sunday Times noted, “Business­ men who have benefited from much protection are among the least enthu­ siastic about a settlement.”165 The manufacturing sector expressed consid­ erable concern that the removal of sanctions would be harmful and pressed the government to maintain protective barriers against imports. The government, for its part, sought to allay these concerns. Speaking of the government’s trade policy in 1971, Ian Smith said: We want to try to encourage local industry, but it must be based on sound principles and we must insure that we are not protecting inefficiency.... As soon as it is practicable we would like to go back to the position we were in before. However, we have had a controlled system for quite a few years and I think it will take a little time for us

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to phase ourselves out of this.... I think it would be irresponsible to drop it [import controls] immediately. If we did this, a lot of damage could be done to a lot of people, especially the smaller people.166 In sum, sanctions gave the domestic manufacturing sector what it had long sought—a protective barrier around the Rhodesian economy behind which it could develop. By benefiting industry, however, sanctions also undermined its will to pursue a policy of opposition. As one businessman recounted, “it’s hard to complain very loudly when you’re making a fat profit.”167 Sanctions thus affected each segment of the business community dif­ ferently. After the initial shock, the impact on the mines was largely neu­ tral. Commerce benefited to the extent that it could mediate between the Rhodesian and world markets. For industry, sanctions raised a protective barrier around the economy that sparked a tremendous surge in growth. The differing effects that sanctions had on the business community arose because the business community was not a single entity in Rhode­ sian politics, but spanned three different sectors of the Rhodesian econ­ omy, each with its own representative organization. Because these sectors occupied different markets, they often had significant conflicts with one another that could impede their ability to pursue a common political agenda. During the Federation era, two factors enabled the business com­ munity to exert a powerful influence on Rhodesian politics. On the one hand, the interests of the different segments of the business community had converged around the desire to expand Rhodesia’s internal market through Federation, as well as the need to dismantle gradually the racial institutions that structured the country’s economy. On the other hand, the Rhodesian government of the time actively supported the business com­ munity’s efforts to pursue its long-term collective interests by mediating between the different segments of the business community and promoting compromises over issues of substantial conflict. Events of the 1960s, however, shattered this constellation of interests and actors. The victory of the RF brought to power a government that was strongly antibusiness. Although sanctions forced the government to enlist business cooperation, the government did not embrace the business com­ munity uniformly, but rather concentrated most of its efforts on develop­ ing Rhodesia’s industrial sector. This caused intrabusiness conflicts that had been subsumed during the partnership era once again to come to the fore under sanctions. The sharpest intrabusiness conflicts emerged between commerce and industry, and centered on two issues. The first was import substitution.

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Commerce had been historically opposed to infant industry tariffs for the manufacturing sector, and sanctions did not change this stance. In 1968, for example, a debate broke out between commerce and industry over the scope and objectives of import control under sanctions. The incoming president of ACCOR, Cecil Wright, strongly warned against the long­ term perils of import control and argued that the government should not allow “import substitution to become an objective of government policy.” Wright was answered by the ARnl’s president, William Perry, who argued that import control should be retained even once sanctions were lifted as a “long term and permanent feature of ‘industrial policy’ to be used ‘judi­ ciously and selectively’ in protecting and attracting industry.”168 Likewise, speaking in 1969, the president of ARnI, John Graylin, declared:

I am optimistic about the future of secondary industry in this country. It has become so big and so important to our economy as a whole that I cannot see the Government reverting to a policy adopted in the past of allowing importation into this country of foreign goods on semi-laissez faire lines.169 Much to the chagrin of commerce, the need for employment and industrial expansion led the government to side squarely with industry. This generated considerable resentment within other sectors of the busi­ ness community. In June 1969, M. J. Britten, a prominent merchant, attacked the government’s policy of import substitution, arguing that “it would not be unfair to say that to some manufacturers, the approval by the government of a project for local manufacture is tantamount to win­ ning the Rhodesian sweep.” Another nonindustrialist bitterly noted, “It’s been Christmas every day for them [industry] since UDI.”170 The second area where sharp disputes emerged between commerce and industry was over foreign exchange. Initially, both ARnI and ACCOR received roughly equal allocations of foreign exchange. In 1965, for example, ARnl’s share of total foreign exchange allocations was 48 percent, while ACCOR’s share was only slightly lower at 43 percent. How­ ever, once the government decided to develop Rhodesian industry as a way of defeating sanctions, the relative shares of the two sectors changed dramatically. Paradoxically, developing Rhodesia’s import-competing industries required large amounts of capital goods imports. By 1970, ARnl’s allocations of foreign exchange amounted to 70 percent of total imports, while ACCOR’s share was a paltry 16 percent. Moreover, some 90 percent of ACCOR’s allocations were to import industrial goods for either mining, industry, or agriculture, leaving very little for consumer

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goods.171 As a result, relations between ARnI and ACCOR were often marked by bitter behind-the-scenes battles over the relative share of for­ eign currency that each would receive. Having divided the major segments of the business community over issues of import control and foreign currency allocation, the government could then coopt the community’s principal representative organizations by giving them a role and stake in the currency allocation system. As a result, after 1968, the political demands emanating from the business community were not over the large issues of Rhodesian politics, but rather over specific sectoral interests such as relative shares of foreign exchange or the extent of government intervention in the sector. Thus, the same pattern of incentives that the government used to weaken inter­ nally the various segments of the business community also served to undermine their ability to act collectively to promote broader issues of business interest.

Conclusion

From the early 1970s onward, the Rhodesian business community faced a steadily deteriorating situation. Shortages of foreign exchange forced many businesses to forgo new investment in plant and capital. Aware that the long-term prospects for the business community would be dismal in the absence of a settlement, the business community rallied strongly behind the Smith-Home agreement in late 1971, which established a settle­ ment between the two countries provided the agreement was “acceptable to the people of Rhodesia as a whole.” According to the Pearce Commis­ sion, which tested the acceptability of the Smith-Home agreement:

The most forceful and determined support for the Proposals came from people in commerce and industry... and all industrialists, com­ mercial managers and businessmen admitted that expansion was being prevented because of lack of capital whilst some even admitted that economic stagnation was a real threat if no Settlement was reached. All made it abundantly clear that they believed a settlement could result in a tremendous surge of industrial and commercial expansion from which all could benefit.172 But even when the Smith-Home agreement failed to produce a settle­ ment, the business community proved unable to exert strong pressure on the government for one. The ability of the government to punish individ­ ual firms as well as the economic benefits that many firms had reaped from

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sanctions served to reinforce the notions that “politics and business don’t mix” and that “politics is best left to politicians.”173 Yet, despite the hos­ tile political climate, most members of the business community did not lose their moderate orientations. Most remained opposed to the RF, but without pursuing an active policy of opposition. Once it became apparent that majority rule would come to the country sooner rather than later, the business community was among the first elements of white Rhodesia to discreetly seek accommodation with the nationalist forces.174 Notions of national unity or racial solidarity in the face of an external threat fare poorly in explaining the business community’s behavior under sanctions. The business community did not respond to sanctions by rally­ ing to the government. Its decision not to actively oppose the government in the immediate aftermath of sanctions was a strategic calculation to wait until sanctions imposed widespread costs on the economy. As these costs grew, so too did the business community’s political opposition to the regime. Nor can notions of solidarity explain the weakness of the business community’s opposition to the regime, its anonymous and apolitical char­ acter, or the rapid collapse of business opposition after the CampbellNewson protest in 1968. A more compelling explanation lies in the ability of the government to manipulate the economic and political incentives that shaped business behavior. On the one hand, the government used its legal powers to give itself the authority to intervene in almost every aspect of business affairs. It also clearly demonstrated its willingness to retaliate against those who sought to act in ways contrary to its interests. On the other hand, govern­ ment responded to the business community’s demand for policies that mit­ igated the costs of sanctions, such as rationing scarce foreign exchange, in ways that increased business dependence on the government. The govern­ ment’s ability to determine which firms prospered and which did not cre­ ated powerful incentives for compliant political behavior and powerful disincentives to engage in open or active opposition. This pattern of incen­ tives forced business opposition to become anonymous and, when the gov­ ernment made clear that it would retaliate against anyone who supported the Campbell-Newson protest, to collapse altogether. At the same time, the government’s ability to punish firms as a group meant that one per­ son’s protest threatened the individual interests of all. This generated strong norms that “politics and business don’t mix” and caused business­ men to distance themselves from anyone pursuing a “political” agenda— even when these political entrepreneurs espoused business views. Finally, by rewarding individual firms and their representative associations with government favors, the government was able to build networks of political loyalty among the business community, coopt the representative associa-

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tions, and seed substantial conflicts of interest among its members. Each of these mechanisms enabled the Rhodesian Front government to under­ mine the business community’s capacity for collective dissent and, in so doing, to make an accomplice out of its strongest opponent. The apparent unity of the government and business community did not emerge because sanctions activated shared norms of group or racial solidarity. Rather it was politically constructed by a regime bent on maintaining its own polit­ ical survival and imposing its own vision on Rhodesian society.

CHAPTER 6

Slippery Business:The Oil Embargo of Rhodesia

To many observers, oil was the perfect candidate for economic sanctions against Rhodesia. Oil is often touted as the ideal economic weapon because no modem economy can function without a stable supply of petroleum products. Not only does a modem economy need petroleum fuels to run its motor transport, its machinery would soon break down without petroleum-based lubricants. Because demand for petroleum prod­ ucts is inelastic, sanctions that create only small disruptions in the supply of these goods can nevertheless impose significant economic costs on the target country. Cutting a modem country’s oil supply is tantamount to cutting its economic lifeline. Characterizing oil as the ideal economic weapon seems especially apt in the context of economic sanctions against Rhodesia. Rhodesia’s entire requirement of petroleum products was imported from world markets, making it acutely vulnerable to an embargo. Moreover, oil sanctions against Rhodesia appeared easy to enforce and monitor. Five interna­ tional oil companies—Shell, British Petroleum (BP), Mobil, Caltex, and Total—supplied the Rhodesian market. Except for Total, these companies were headquartered in either Britain or the United States, which cooper­ ated closely with Britain in the sanctions effort.1 Finally, petroleum fuels are bulk goods that must be shipped in specialized containers—pipelines, tanker ships, or rail or motor tank cars. Because there were only a few routes over which landlocked Rhodesia could import petroleum products, the large-scale shipment of oil to the country could not go unnoticed. The oil sanctions against Rhodesia failed spectacularly. Despite a British blockade of the Mozambican port of Beira, the primary point through which Rhodesia received oil, a massive sanctions-busting cam­ paign soon supplied Rhodesia with its petroleum requirements. In 1967, for example, a UN study not only found that Rhodesia was still importing most of its oil needs, it even identified the sources of Rhodesia’s oil. “It is no secret,” noted the UN report, “that United Kingdom and United States companies ... were the main suppliers through their subsidiaries in South 133

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Africa.”2 Moreover, it was clear what route most of the bootleg oil was taking. It was either transported directly by road tanker from South Africa via the Beit Bridge or indirectly by ship to Lourenco Marques (now Maputo) in Mozambique and then onward by rail to Rhodesia.3 To many, the oil embargo stands as a compelling example of the difficulties states face in controlling multinational firms for political purposes and the futil­ ity of using economic sanctions to pursue important foreign policy goals. Yet the rerouting of oil shipments to the rebellious colony was not the only consequence of the oil embargo. The embargo also led to the wholesale restructuring of the way petroleum and petroleum-based products were imported into and marketed in Rhodesia. Under the pressure of sanctions, the Rhodesian government intervened extensively in the country’s oil mar­ ket. It placed the local subsidiaries of the five international oil companies under state control and created a separate parastatal authority, GENTA, which was solely responsible for importing all major petroleum products into the country.4 By mid-1966, all aspects of the country’s oil trade had been brought under the direct control of the Rhodesian government. The extension of government control over Rhodesia’s oil market raises a puzzle. By the time GENTA assumed complete control of the colony’s oil trade, the embargo had been broken. Not only had South Africa and the Portuguese colony of Mozambique tacitly cooperated with the Rhodesian regime by permitting the transit of oil bound for Rhodesia, but South Africa had also ensured the unhindered flow of petroleum to the entire region by secretly but explicitly threatening to retaliate against any British attempt to interfere with South Africa’s oil trade. Finally, the high prices available to those who sold petroleum to Rhodesia had created a thriving market in bootleg oil in which many different actors, including the subsidiaries of the major oil companies, competed to supply Rhode­ sia’s needs. Yet the Rhodesian government shut down this market. One purpose of this chapter is to understand the transformation of the Rhodesian oil market. Why did economic sanctions lead the govern­ ment to intervene so extensively in this sector? What purposes did govern­ ment intervention serve? Why was a “market” solution to oil sanctions, in which the government allowed private actors to continue to import oil into the colony, not chosen? Another purpose is to explore the broader political issues that the embargo raised for Britain and South Africa. I take this broader focus because the oil market of southern Africa was deeply integrated. The eco­ nomics and politics of oil in this region were determined jointly by the actions of a handful of international oil companies and the governments of the countries that hosted them. As we shall see, the conventional interpre­ tation that the embargo failed to achieve British goals in the region is

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highly misleading. Britain recognized the geographic and strategic factors that prevented an embargo from ending the Rhodesian rebellion, and it imposed the embargo instead to send a credible signal to black Africa and the Commonwealth that its desire to install eventual majority rule in Rhodesia was sincere. Moreover, British policy was limited by an explicit but hitherto unknown South African threat to impose countersanctions should its own oil trade be disrupted.5

Background to the Oil Embargo

When Britain first imposed economic sanctions on Rhodesia, it did not impose an oil embargo. This surprised many observers who regarded oil as Rhodesia’s Achilles’ heel. Oil was Rhodesia’s single most important import. Not only did it supply 27 percent of Rhodesia’s energy needs, it was a critical input in several important economic sectors.6 Oil provided 100 percent of the energy required by the road transport industry and 70 percent of the requirements of commercial agriculture, which produced slightly over 20 percent of Rhodesia’s GDP in 1965 and was the govern­ ment’s strongest constituency.7 Finally, there are no ready substitutes for petroleum fuels. An effective oil embargo would not only bring critical sec­ tors of the Rhodesian economy grinding to a halt, it would also create sub­ stantial political pressure on the Rhodesian government from its most important supporters. In addition, many outside observers believed an oil embargo would be easy to monitor and enforce, since the Rhodesian market was supplied by only five international oil companies (Shell, British Petroleum, Mobil, Caltex, and Total). Oil was imported into Rhodesia along a single route. Tankers with crude oil for the central African market offloaded their car­ goes at the Mozambican port of Beira. The crude was then pumped through a 189-mile pipeline to the Feruka refinery in Rhodesia, where it was refined into fuels, lubricants, and solvents. These were then distrib­ uted throughout Rhodesia, Zambia, and Malawi by the local subsidiaries of the five international companies. Applying effective oil sanctions thus seemed as easy as telling the oil companies to shut off the tap to Feruka. Britain saw otherwise. First, there were significant problems in imple­ menting the embargo. A unilateral British effort would not halt the flow of oil to the colony. Even if the British companies, Shell and BP, ceased sup­ plying Rhodesia, this would affect just over 40 percent of Rhodesia’s requirement, a breach that the other oil companies serving South Africa could easily fill.8 Britain thus concluded that only a multilateral effort was likely to be effective in reducing the flow of oil to Rhodesia.

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Yet even with substantial multilateral cooperation, the ultimate effec­ tiveness of an oil embargo was questionable. The Beira-Umtali pipeline route was new, having first come on line in March 1965.9 Previously, Rhodesia had been supplied with refined petroleum products via rail from the ports of Beira and Lourenco Marques. Closing the Beira pipeline would simply bring these earlier routes back into use. Moreover, the Rhodesian oil market was small. In 1965, Rhodesia’s consumption was only one-tenth of South Africa’s.10 Not only did South Africa possess ample stocks of oil that could cushion the impact of any embargo on Rhodesia, it also possessed the necessary refinery capacity and rolling railway stock to maintain a continual supply of petroleum products to the colony.11 According to a British planning document, “we must expect supplies of products to be made available through Portuguese East Africa and the Republic of South Africa. Supplies in South Africa amount to 4.5 million tons a year, and it should be possible for their refineries ... to provide considerable help to Rhodesia.”12 The small size of the Rhodesian market also meant that it would be fairly easy for the South African subsidiaries to conceal the source of Rhodesia’s oil, not only from the British government, but also from their own head offices. As an internal BP document that examined that company’s role in busting the oil sanctions later noted: Even a very substantial increase ... in the quantities supplied to Rhodesia by South Africans purchasing oil from the Marketing Com­ panies, could be concealed by changes in overall demand in South Africa or in the market shares of the Marketing Companies or by technical fluctuations in the pattern of imports caused, for example, by variations of stock or refinery shutdown periods.13

Because of these factors, an effective embargo required not only the assistance of the home governments of the five oil companies serving Rhodesia, but also the assistance of South Africa, Portugal, and the colo­ nial administration of Mozambique. Although none of these entities wel­ comed the Rhodesian rebellion and the upsurge in black nationalism that would inevitably follow, neither would they help Britain implement sanc­ tions. South Africa was already coming under international pressure because of apartheid. Portugal was tenuously clinging to its southern African colonies of Mozambique and Angola. They realized that if sanc­ tions succeeded in bringing Smith to heel, they would be the next targets.14 The most Britain could hope for, then, was that South Africa and Portugal would remain neutral. However, even if these states did not directly supply oil to Rhodesia, a policy of strict neutrality that allowed

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Rhodesian agents either to purchase oil in their markets or to ship oil across their territories would cause the embargo to collapse. As one British study noted, Rhodesia’s small oil market meant that “only one loophole for operators seeking a quick profit [would] undermine the effectiveness of the embargo.”15 In other words, to effectively cut the supply of oil to Rhodesia, Britain had to cut the supply of oil to the whole of southern Africa. Yet even this strategy failed to offer a rapid resolution to the conflict and was extremely risky. South Africa held oil stocks equal to six months’ normal consumption, only one month of which could keep the Rhodesian econ­ omy afloat for a year.16 Moreover, cutting oil to southern Africa would force South Africa to abandon any pretense of neutrality and come down squarely on the side of Rhodesia, destroying any chance of forcing Smith from power. It would also widen the conflict by making South Africa a lightning rod for further economic sanctions as well as force Britain to choose sides in a broader conflict between white and black Africa.17 Finally, because South Africa was acutely sensitive to its dependence on imported oil, any British move to restrict South Africa’s oil trade—even if the ultimate target of such restrictions were Rhodesia—might provoke South African retaliation, a factor that weighed heavily in British calcula­ tions. According to a British assessment:

The political objections [to an oil embargo] stem from South Africa’s ability to retaliate against this country if we become party to a block­ ade aimed at her vital interests. The loss of our markets and invest­ ments in South Africa would be a serious blow to our economy and Ministers have already decided in the context of United Nations action against South Africa that they would have to veto . . . any mandatory [UN] resolution calling for economic sanctions against that country.18 Britain also feared that an oil embargo might provoke Rhodesian sanctions against Zambia, which would also seriously damage British eco­ nomic interests. Because Zambia’s sole source of petroleum products was the Feruka refinery, Rhodesia made very clear that any attempt to inter­ fere with its own oil supplies would lead it to cut off oil to Zambia.19 In late September 1965, for example, Rhodesia’s permanent secretary to the Min­ istry of Commerce and Industry told Peter Jameison, the general manager of Shell Rhodesia, that Rhodesia would not permit Zambia’s petroleum supplies “to transit Rhodesia if crude supplies were denied to CAPREF [the Feruka refinery].”20 Rhodesia could also inflict substantial harm on the Zambian economy by taxing heavily or denying altogether Rhodesian

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exports of coal to Zambia, that country’s primary source of energy. Finally, because Zambia’s road and rail links to world markets ran through Rhodesia, Rhodesia could effectively sever Zambia’s trade.21 Rhodesia’s ability to shut down Zambia’s economy, especially its copper production, was a powerful deterrent to an oil embargo. Zambia supplied approximately 16 percent of the world’s and 45 percent of Britain’s copper imports.22 Britain had no alternate sources of supply and feared that the cutoff of Zambian copper would lead to chaos on the Lon­ don Metals Exchange and cause a rapid scramble for the “free supplies” on the spot market.23 This not only threatened to impose substantial costs on British economic interests, with the “gravest repercussions on the United Kingdom’s export effort and balance of payments position,”24 it also directly threatened the interests of the U.S. government, which was increasing its demands for copper because of the escalating Vietnam War. As a result, the United States viewed an oil embargo of Rhodesia as reck­ less and initially opposed British efforts to impose one.25 As a brief for British Cabinet ministers noted:

An oil embargo, effective or not, would however put at risk the flow of copper from Zambia. The United States Government have told us that they regard continuing access for the world to Zambian copper supplies as far overriding in importance any possible advantages of denying oil to Rhodesia; and have warned us that we should not expect them to help us over the consequences for our own industry, for our balance of payments, and for our sterling, of an interruption in Zambian copper supplies.26

Finally, Britain also feared the longer term political ramifications of interfering with the free flow of oil in world markets. On the one hand, it was reticent to harm the commercial interests of the British oil companies in third countries. Oil company cooperation with the embargo could con­ vey the message that they were really instruments of the British govern­ ment, and not international companies committed to the free flow of com­ merce in world markets. This concern was especially acute for British Petroleum, in which the government held equity.27 On the other hand, Britain was extremely wary of setting the precedent that the flow of oil could be openly interfered with for explicit political purposes. In particu­ lar, it feared that oil-producing states might, in the future, begin to manip­ ulate the flow of oil for their political ends. According to a note by the For­ eign Office, “the oil companies have the right to decide where to export oil. Their retention of this right is important for the general security of sup­ plies. Once governments generally, especially in the Middle East, start

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interfering with the direction of exports, the precedent could prove dan­ gerous.”28 Britain thus omitted an oil embargo from its initial package of sanc­ tions not because it wanted to hold this weapon in reserve, as one compo­ nent of a strategy of graduated escalation in which it progressively widened the scope and impact of sanctions over time, but because an oil embargo was a politically provocative and dangerous policy that threat­ ened many of Britain’s broader political and economic interests. Imple­ menting an effective oil embargo against Rhodesia required shutting off the tap to all of southern Africa. This, in turn, threatened to precipitate retaliatory measures by South Africa, Rhodesia, and (implicitly) the United States. Britain’s initial reluctance in imposing an oil embargo thus turned both on practical matters of implementation and, ironically, on its own vulnerability to the economic countersanctions that could be imposed by other powers. As a November 12 letter from George Brown to the prime minister noted: The main reasons [for not implementing an embargo] were that it would be seriously damaging to Zambia, that it was extremely dubi­ ous whether sufficient or effective cooperation would be secured from other governments to stop oil supplies and that South Africa could undermine any embargo. ... All this could spell serious dangers for our own economy.29

Rethinking the Oil Embargo

Once Rhodesia declared independence, the British Cabinet revisited its decision not to impose an oil embargo. The cabinet recognized that Britain’s initial sanctions might not end the rebellion and that even a par­ tially effective oil embargo might be necessary to “divert the United Nations from military action.”30 In fact, pressure quickly built from black African states for more deci­ sive action against the colony. Black Africa and many in the Common­ wealth openly doubted Britain’s commitment to majority rule in Rhode­ sia. Britain had not only openly renounced the use of force to end the rebellion, its initial sanctions against Rhodesia had little immediate eco­ nomic impact on the colony.31 Most glaring, Britain’s sanctions omitted the potentially most damaging and provocative sanction, an oil embargo. Britain’s willingness to impose an embargo thus became the litmus test of its commitment to majority rule. President Jomo Kenyatta of Kenya spoke for most of black Africa when he privately demanded of Harold

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Wilson “that the rebellion must be brought to an end by the British Gov­ ernment if necessary by the use of force” and “that Britain should demon­ strate its continued determination to resist the entrenchment of the Smith regime by making an early start to impose an oil embargo.”32 On Novem­ ber 20, 1965, the UN Security Council sought to force Britain’s hand by voting voluntary oil sanctions against the colony. On December 5-6, the Organization of African States upped the ante by demanding that Britain impose stringent oil sanctions on Rhodesia within the next ten days. When it failed to do so, thirteen African states broke diplomatic relations with Britain on December 16, 1965.33 Also that day, some one hundred dele­ gates representing African countries walked out when Prime Minister Wil­ son spoke to the General Assembly of the United Nations. Britain’s rela­ tions with Africa had reached their lowest point.34 Britain now feared that growing pressure for decisive action would rapidly escalate into demands for mandatory UN resolutions to suppress the Rhodesian rebellion, including the use of force.35 This created a significant dilemma for British policy. To veto any mandatory resolution in the UN would paint Britain as protecting white interests in Rhodesia at the expense of black. This would undermine the position of moderate and pro-British governments in Africa, especially Zambia’s; shatter the Com­ monwealth; and transform the Rhodesia crisis into a wider confrontation between white and black Africa. Yet, allowing the United Nations to pass a mandatory resolution was scarcely more palatable to Britain. This course of action risked supplanting Britain’s authority to manage the Rhodesia crisis as an internal matter; could easily accelerate rather than dampen demands for even more extreme measures against Rhodesia, espe­ cially if the initial measures did not produce immediate results; and threat­ ened to broaden the conflict by generating substantial pressure to apply mandatory sanctions against South Africa and Portugal as well, a process that appeared almost certain to provoke severe countersanctions against Britain. In short, Rhodesia’s unilateral declaration of independence con­ fronted Britain with its “most serious crisis since Suez,” with serious ramifications for British power and interests that reached well beyond its relationship with Rhodesia.36 Britain concluded that the best strategy to manage this crisis was to defuse the mounting pressure for stronger action by visibly increasing the economic pressure on Rhodesia. As one document notes:

[Unless] sterner economic and political measures are taken against the illegal regime and unless there are signs that the measures taken are having some effect, there will be increasing pressure for a further Security Council meeting and mandatory resolutions for extreme

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action. These would have grave implications for western interests and would be increasingly difficult to resist.37 Most important, increasing pressure on Rhodesia meant instituting an oil embargo against the colony.38 However, because a unilateral embargo “would be an ineffective gesture and a dangerous one at that,”39 Britain realized that an oil embargo would be possible only with U.S. assistance and sought to convince the United States to support this change in course by arguing that the United States faced a similar dilemma in southern Africa.40

The point is [reads one document] that we should try to persuade the Americans that it is in their interest to help us.... The risk of racial war in Africa must be as unwelcome to them as to us. The... risk that South Africa will be brought in, with mounting pressure for economic sanctions against her too, is surely as alarming to them as to us. The possibility that the Smith regime might survive, with obvious conse­ quences to American as well as British relations with African states must be almost as disturbing to them as to us. On the other hand, the chance that we may be able to take effective action jointly against Smith and in the defence of an African state, namely Zambia, should be helpful to the Americans in Africa.41

In early December, the United States dropped its reservations to an oil embargo in order to defuse growing tensions with black Africa.42 The final details of a joint embargo were hammered out on December 17. Britain, acting as the government de jure of Rhodesia, and supported by the United States, would announce an Order in Council that banned the importation of petroleum products into Rhodesia while Zambia would be supplied with oil by a joint emergency airlift.43 Significantly, neither Britain nor the United States believed the oil embargo would bring down the Smith regime. Although both sides hoped to impose significant economic costs on the Rhodesian economy and thereby increase the pressure on Smith to settle, they clearly recognized the geographic and strategic factors that made this outcome unlikely and were under no illusions that the embargo would end the rebellion. One U.S. State Department document doubted the effectiveness of an oil embargo because Rhodesia’s “supplies could be obtained through oil brokers from other sources at slightly higher than world prices.”44 “Our and the UK estimates,” reads another, “are that [an oil embargo] could not be effec­ tive, even with a naval blockade, since South Africa could pick up the slack.”45 A British assessment likewise notes, “although joint action with

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the U.S.A, should enable us to cut down supplies reaching Rhodesia via Beira we cannot hope that the ban will be complete.”46 According to another, “Oil sanctions would not be effective short of a naval blockade of southern Africa. Even then they would not, in the short term, bring down the illegal regime.”47 Still another states:

No-one has yet indicated a method of producing a Rhodesian capitu­ lation within a period of about three months other than by military sanctions. All the evidence is that an oil embargo would not do so. The Rhodesians have several weeks’ supply in the pipeline, so that even if all their sources of supply were cut off today oil sanctions would not begin to bite for six weeks or so at least. But all sources cannot be cut off today. Even if we blockaded Beira or blew up the pipeline to Umtali it is very probable that the Rhodesians could obtain supplies from South Africa (or possibly Angola).48 These pessimistic assessments raise an important puzzle. Why would Britain and the United States engage in an economically costly and politi­ cally risky oil embargo, given their well-grounded expectation that it would not end the Rhodesian rebellion? The answer is that the primary target of the oil embargo was not Rhodesia, it was black Africa and the Common­ wealth. By imposing an oil embargo, Britain and the United States hoped to dissipate growing pressures for more drastic action and thereby mini­ mize the risks that the conflict would endanger their broader interests on the African continent. Only by undertaking an economically costly and politically risky strategy that imposed real and visible costs on Rhodesia could Britain and the United States credibly demonstrate to black Africa and the Commonwealth that they were committed to ending the Rhodesian rebellion in a manner that ensured majority rule. As one U.S. State Depart­ ment brief noted, “An embargo would not cause serious distress to Rhode­ sia, but it might allay pressures in the UN and black Africa.”49 Likewise, according to one set of British minutes, “The United States authorities agreed with us that no oil embargo against Rhodesia could be wholly effec­ tive, but they considered it politically and psychologically very important, and for this reason were prepared to cooperate with us.”50 The British (and American) oil sanctions thus encompassed two con­ tradictory objectives. On the one hand, Britain had to pursue oil sanctions stringent enough to preserve its standing in black Africa and the Com­ monwealth and thus defuse growing pressures for more dangerous mea­ sures. This meant imposing real and visible costs on the colony by making the oil embargo as effective as possible. On the other hand, it had to avoid any action that would provoke South African or Rhodesian retaliation

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against British interests. Britain resolved this dilemma by following, rather than leading, world demands for an oil embargo against Rhodesia. By eventually caving in to diplomatic pressure and imposing oil sanctions, Britain demonstrated to black Africa and the Commonwealth that it was serious about Rhodesia. However, by doing so only after coming under intense pressure from the world community, Britain sought to reassure South Africa that it acted not as the engineer of the demand for stringent oil sanctions, but as the brakeman.51

The Oil Embargo against Rhodesia

Britain imposed oil sanctions on Rhodesia on December 17, 1965. Secur­ ing U.S. cooperation was an important achievement for Britain, as the British and American oil companies supplied over 90 percent of the Rhodesian oil market.52 Although Britain doubted that an oil embargo would force Rhodesia to renounce UDI, it needed to make the embargo as effective as possible in order to credibly demonstrate its commitment to ending the Rhodesian rebellion. In fact, its early efforts to stop the flow of oil to Rhodesia were marked by a number of important successes. One success was that the British and American oil companies that supplied Rhodesia proved extremely cooperative in implementing the sanctions. As early as November 11,1965, the British government received indications that the British oil companies were quietly willing to institute a rationing system that limited supplies to South Africa in order to reduce the amount of oil that could reach Rhodesia.53 The companies also informed Britain of tanker movements for the central and southern African markets during the planning of the embargo in late November and early December. British Petroleum even delayed the sailing of the tanker British Security, which was due in Beira in early December, and made con­ tingency plans to divert its cargo at Britain’s request.54 And, once the Sanctions Order was issued, Shell immediately diverted the tanker Staberg which was then under way for Beira with a cargo of crude.55 By December 20, Louis Walker, the general manager of Shell South Africa, had cabled Shell Centre London that “we have stopped despatch of products from Durban Refinery and also from Durban Lubricating Oil Blending Plant.”56 On December 22, the British Ministry of Power noted that “Shell [has] all along co-operated closely with H.M.G. over the Rhodesia prob­ lem,” and that “Shell [has] taken all necessary steps open to them to com­ ply with the Order in Council.”57 On the American side, the United States ordered the Norwegian tanker Tamarita, which was chartered by Aminoil (the American Independent Oil Company) and bound for Beira, to dis­

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charge at the Kenyan port of Mombassa.58 By late January, the State Department found that the American oil companies were “cooperating fully and have refused to sell oil to entrepreneurs for export to Southern Rhodesia.”59 Even more important, within South Africa itself, the South African subsidiaries had secretly agreed in February 1966 to limit the sup­ plies of oil to the northern Transvaal to 115 percent of the previous year’s supplies. This agreement would impede Rhodesia’s ability to draw its sup­ plies from this source as some outlets would run dry, and it was reached without the knowledge of the South African government.60 South Africa also declared itself strictly neutral in the conflict, stating that it would carry on only normal levels of trade with Rhodesia. Britain interpreted this stance to mean that South Africa would continue to sup­ ply Rhodesia, but only with the few petroleum goods that were custom­ arily supplied from the South African market.61 Because Rhodesia received most of its major petroleum products via Beira and the Feruka refinery, the underlying message seemed clear: South Africa was unwilling to let itself become a major conduit for supplying Rhodesia. In fact, the South African government’s initial contacts with the oil companies’ South African subsidiaries supported this interpretation. According to a Shell account of a December 23,1965, meeting between the South African subsidiaries and the South African secretary of commerce and industry, the secretary told the oil companies that in order to preserve South Africa’s neutrality they should:

Aye continue with any “traditional” supplies we [the oil compa­ nies] had in the past been making to the countries involved including Zambia. Bee not meet any orders for products or quantities other than what we have traditionally supplied. Tertio If... requested by Rhodesian or other affiliates to supply products or quantities other than what we have traditionally supplied then Government’s instruction is that we inform the affiliates that we cannot supply and that they should request their Government to approach the South African Government for assistance.62

Britain’s confidence was also raised by reports from Rhodesia indi­ cating that the oil sanctions were having a rapid and potentially severe economic impact. On December 31, 1965, the Beira pipeline shut down because the companies’ storage tanks at Beira had run dry, stranding 14,000 tons of crude oil in the pipeline.63 Lacking any further supplies of crude with which to push this oil through, Rhodesia could only acquire this oil by flushing the pipeline with seawater. Yet, this proved impossible

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when the Portuguese company controlling the pipeline refused to cooper­ ate; flushing the oil with seawater threatened to seriously corrode the pipeline.64 On January 15, 1966, the Feruka refinery ceased operating when its crude oil storage tanks ran dry. Rhodesia’s dwindling supplies of petroleum products forced it to ration supplies. On December 27, it introduced its first rationing scheme, which allowed motorists between three and five gallons of petrol per week, while exempting farmers and commercial vehicles using diesel fuel.65 This scheme quickly proved unsatisfactory. On January 6, a new scheme was announced that cut the basic petrol ration even further to between one and two gallons a week.66 By January 20, Rhodesia was again forced to reduce consumption. It cut the petrol allocation a further 25 percent while raising the price of fuel by Id per gallon. Bulk purchasers of fuel were now receiv­ ing allocations of only 40 percent of normal consumption, and licensed farmers became subject to diesel rations for the first time. They could now draw only 50 percent of their normal consumption of diesel.67 One of the first indications that the embargo was unraveling came in late December when Mobil South Africa balked at an order by Mobil New York to cease pumping oil from the company’s storage facilities at Beira. These facilities had been leased to CAPREF, the Rhodesian-registered company that ran the Feruka refinery. Mobil South Africa argued that not only would it be breaching its commercial obligations to CAPREF (and thereby make itself vulnerable to legal action), but that it had been specifically warned by the South African government not to deny Beira storage to Rhodesia. Thus, ceasing to pump oil from Beira was not a real­ istic option for the company. Mobil New York accepted these arguments and allowed the pumping to continue. Although Britain was concerned that Rhodesia could now use Mobil Oil to pump bootleg supplies of crude through the pipeline, the event itself seemed to be of marginal importance as the storage tanks at Beira ran dry within a matter of days.68 It was, how­ ever, an early indicator of both the difficulty that the parent oil companies would have in controlling their subsidiaries and the desire by South Africa not to see the oil embargo succeed. In fact, South Africa’s decision to limit trade with Rhodesia to nor­ mal levels of supplies arose not from a desire to remain neutral, but from two other factors. First, South Africa was uncertain what effect the Rhodesian purchase of South African petroleum products would have on its own level of supplies. By limiting sales to normal customers and quan­ tities, it gave itself breathing space to clarify this issue. In his meeting with the oil companies, for example, the South African secretary of commerce and industry did not actually prohibit the onward supply of Rhodesia from South African sources, but only required governmental approval

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before such sales were made. According to the Shell account of the meet­ ing, the South African government would consider each case [request for purchase by Rhodesia] on its merits and if they consider there are good reasons for meeting the request they will con­ sult with the oil companies concerned in an effort to make supplies available provided this could be done without prejudice to South Africa’s own stock/supply position.69

The second factor was South Africa’s desire to avoid a major conflict with Britain. A serious row over Rhodesia would have injured both coun­ tries, as well as risked broadening the oil embargo to include South Africa. By taking a strict line early, South Africa retained the option of relaxing its position once Britain’s position became clear. Moreover, by making oil company sales to Rhodesia contingent upon its approval, the South African government gave itself an important means by which it could influence Rhodesian behavior. By late January, South Africa began to probe the limits of British pol­ icy. On January 21, it permitted small shipments of “gift petrol” to be sent northward from private groups that had sprung up to support Rhodesia’s rebellion.70 On January 26, South African prime minister Verwoerd stated in parliament that the government would not interfere with private indi­ viduals or oil companies that supplied Rhodesia.71 At the same time, the government began pressuring the South African subsidiaries of the oil companies to end the practice of conditional selling, in which oil was sold only with the proviso that it not be resold to Rhodesia. The oil companies balked at first, arguing that ending conditional sales risked an interna­ tional crisis that might endanger South Africa’s own supplies.72 The South African government scoffed at these arguments. In a meeting with the oil companies on January 25, Kotzenberg, South Africa’s secretary of indus­ try and commerce, characterized the oil companies’ position as “rubbish,” stating that “South Africa must call the bluff of the Western Nations.”73 Kotzenberg repeated his position in another meeting three days later. According to Shell’s account, Kotzenberg “took the attitude that our overseas suppliers would not in the ultimate refuse to supply us and he suggested that South Africa should call their bluff by helping Rhodesia on whatever scale was necessary.”74 It was also clear that the South African government occupied a dom­ inant position in any dispute over the supply of Rhodesia. The South African government was deeply disturbed by what it saw as foreign inter­ ference in the domestic affairs of South African companies. South Africa clearly distrusted these firms and closely monitored their activities. For

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example, Shell and BP often communicated with their South African sub­ sidiaries about the embargo via the British embassy in South Africa because they believed the South African government intercepted their intracompany communications.75 In one instance when the government discovered that excessive sales caused a Shell station to run dry in the northern Transvaal, “Kotzenberg [the South African minister of com­ merce] had been on the ‘phone within hours to the company to report that he had heard that one Shell station was refusing to supply and that this did not accord with the Government’s position.”76 According to BP and Shell, “The South African government now considered that they [the oil compa­ nies] were not international companies but British and American compa­ nies who could not be relied upon to place South Africa’s interests first.”77 In fact, the South African government made clear that it could retaliate in any number of ways against a company that decided not to comply with its wishes. For example, it began direct to government contracts away from Shell/BP and toward other companies, such as the Portuguese company Sonarep, that were perceived to be less open to political influence.78 It also threatened legal action against any company that did not comply with government policy. In a 1968 letter to the oil companies, the South African minister of economic affairs reiterated the government’s position: “I also wish to reaffirm the advice I have given to the oil companies on various occasions in the past. ... the Government will not hesitate to take legal action against them... in the event of the oil companies failing to comply strictly with the Government’s verbal directive [prohibiting conditional sales].”79 On February 14, 1966, the oil companies fell in line with South African policy by ending conditional sales.80 The companies clearly recog­ nized that as South African-registered subsidiaries, South African law took precedence over home country directives and that the South African government gave them little choice but to toe the line. According to Louis Walker, General Manager of Shell South Africa, “if we really did carry out the spirit of the Order in Council we might as well shut up shop in South Africa ... the Government would apply the sort of sanctions that Gov­ ernments can apply very easily without ever having legislation, and there could be a serious confrontation.”81 The trickle of refined oil products that had been flowing northward over the Beit Bridge (the only direct transportation link between South Africa and Rhodesia) became a torrent. In mid-February, the Rand Daily Mail estimated that over 35,000 gallons of petrol a day were crossing the border at Beit Bridge with an equal amount being shipped by rail via Mozambique.82 By March, the British government estimated that Rhode­ sia was receiving 125,000 to 150,000 gallons per day, or between three-

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quarters and the whole of its petroleum requirements. Most oil now flowed into the colony via the Lourenco Marques railway. Britain suspected that the source of this oil was the Sonarep refinery in Mozambique. The refinery would ship extra oil to normal bulk customers, such as large farms or mines, just inside the South African border. These customers would then reship the oil back to Mozambique and onward to Rhodesia, an arrange­ ment that required the complicity of the South African Railways.83 Concerned by the growing northward flow of oil, Britain sought to pressure South Africa to limit the flow to levels that had traditionally been supplied from the South African market. Britain sought to raise the specter of growing African pressure for mandatory UN sanctions and, implicitly, an embargo against South Africa if it did not comply in shut­ ting off oil to Rhodesia. One plan suggested by Prime Minister Harold Wilson in February 1966 was to encourage President Kenyatta of Kenya to make threatening public demands for a Chapter VII resolution.84 These pressures did not sway the South Africa government, which made very clear that it would not interfere with the flow of oil to Rhode­ sia. In (re)explaining his government’s position that South Africa would only pursue normal trade with Rhodesia, Prime Minister Verwoerd told a campaign rally, “Normal trade means that everyone in competition tries to sell as much as he can.... If one sells more, it is not abnormal trade, but better trade. This must be quite clearly understood.”85

South African Countersanctions and the Limits of British Policy

The series of events that broke the embargo for good began in April 1966, when the tanker Joanna V docked at Beira with a load of crude for the Feruka refinery. Another tanker, the Manuela, was already at sea and bound for Beira. On April 7, invoking a threat to the peace, Britain tabled a resolution in the UN Security Council calling upon Portugal not to allow the delivery of oil to Rhodesia and permitting Britain to “prevent by force if necessary vessels reasonably believed to be carrying oil destined for Rhodesia.”86 The resolution, which passed on April 9, was only the second occasion on which the United Nations had invoked mandatory sanctions under Chapter VII of the UN Charter, and the first time that a member had been authorized to use force to carry out the will of the Council.87 The Security Council resolution dramatically altered the strategic landscape of the embargo. Logically, the oil flowing from South Africa into Rhodesia via Mozambique was as much “a threat to the peace” as oil

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shipped directly to Rhodesia via the Beira pipeline.88 Britain thus hoped to use the resolution to increase pressure on South Africa. Although Britain did not expect South Africa to publicly reverse its position of noninterfer­ ence, it hoped that South Africa’s desire to avoid an extension of manda­ tory sanctions to its own oil trade would lead it to stop the flow of oil to Rhodesia. In fact, Britain planned to threaten South Africa directly with the dangers of not cooperating. According to a document that laid out Britain’s intended approach, so long as oil continued to flow from South Africa to Rhodesia, Britain should explicitly warn South Africa that it would “have no alternative but to go along with majority opinion in the United Nations and accept a mandatory resolution calling on South Africans to apply oil sanctions.”89 The turn of events alarmed South Africa. South Africa recognized that it was only a small step from the blockade of Beira to the blockade of Lourenco Marques, a major point of entry for oil bound for the northern Transvaal (and Rhodesia), and perhaps even a blockade of South Africa itself. Not only was an embargo against South Africa a major objective of the African states in the Security Council, Britain had sought to pressure South Africa by claiming that it could not stop “uncontrollable” pressures in the United Nations for mandatory sanctions against the entire region. South Africa now feared that British policy in Africa was malleable: too easily influenced by pressures from black Africa and elsewhere to protect South Africa’s interests. As South African prime minister Verwoerd com­ plained in a letter to British prime minister Wilson, “the danger is great that other, particularly African, nations will seek further steps against Rhodesia, or that Britain, once again to avoid such intervention, will feel herself compelled to initiate more stringent measures. The same process could then follow against Portugal and South Africa.”90 Finally, South Africa was alarmed because Britain had demonstrated that it was possible to achieve the level of multilateral cooperation necessary to restrict the flow of oil to southern Africa and severely damage South Africa’s econ­ omy. According to one assessment:

As they [South Africa] know, we do not believe that the U.N. could impose effective economic sanctions right across the board against South Africa. But experience in Rhodesia has shown that an oil embargo would be likely to secure the collaboration of the major oil companies and a very wide measure of cooperation from the lesser companies and ship-owning states. Understandably, some oil would reach South Africa. But it would hardly be likely to be in quantities which would not seriously affect their economy.91

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South Africa responded by explicitly threatening to retaliate against British interests should Britain or the United Nations interfere with South Africa’s commerce, especially its oil supplies. In a lengthy letter to British prime minister Wilson on April 15, 1966, the South African prime minis­ ter, H. F. Verwoerd, spelled out South Africa’s position: If... any action were now to be taken against South Africa, for exam­ ple, the extension of an oil embargo against this country, such an attack on her sovereign rights would have to be opposed by all means at her disposal. .. and she would have to defend the freedom of the high seas for her transport as Britain would no doubt do under simi­ lar circumstances. Any broadening of an oil embargo, or an embargo directed against South Africa to cover other trading commodities, would therefore have far reaching consequences for British-South Africa trade rela­ tions. We are both familiar with the extent of our present mutual depen­ dence on trade between our respective countries, as well as in wider economic and financial fields, including the contribution which South Africa is making to the stability of the Sterling area and the value of gold from South Africa for Western Nations.... It is highly desirable that all this should not be affected. For South Africa, if the test were to come, the choice would have to be between such advantages and her very existence. I therefore had to make quite clear how unavoidable our stand would have to be.92

Britain’s reply, contained in a personal telegraph from Wilson to Ver­ woerd, again invoked the specter of uncontrollable pressures that would lead Britain to act against South Africa. Wilson claimed that South Africa’s unwillingness to limit the flow of oil to Rhodesia to pre-UDI lev­ els meant that South Africa actively supported the rebellion and that South Africa’s actions were fueling extremist pressures in the United Nations that endangered the interests of both countries. These pressures, Wilson argued, would ultimately lead to demands for mandatory sanc­ tions against South Africa, demands that Britain would be unable to veto, given its considerable economic and political interests elsewhere in Africa and the broader Commonwealth.93 The opposite was actually closer to the truth. Not only was South Africa’s threat credible, Britain found the scale of damage that South Africa could inflict on its interests “too awful to contemplate.”94 South Africa’s highly credible threat to impose countersanctions had a subtle but profound influence on British policy. Rather than aggressively seeking

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ways to pressure South Africa to limit the flow of oil to Rhodesia, Britain now sought to avoid a confrontation with South Africa at all costs, a point that it communicated to the British oil companies as early as May 1966.95 According to a Commonwealth Office memorandum to the British cabi­ net, British policy should now “bring economic sanctions to the pitch of maximum effectiveness, only limited by the need to avoid confrontation with South Africa.” Confrontation with South Africa, the document con­ tinued, “is a price which we cannot afford to pay and we must at all costs insist that we are not drawn into economic warfare with South Africa.”96 In September 1966, the cabinet even concluded that economic warfare with South Africa “could be too high a price to pay even for holding the Commonwealth together.”97 Britain’s unwillingness to provoke a confrontation with South Africa allowed the flow of oil into Rhodesia to continue unabated. In late spring, Britain estimated that Rhodesia was receiving between 250,000 and 320,000 gallons of oil per day, allowing Rhodesia to build stocks.98 South Africa was deeply implicated in this trade. Louis Walker, the general man­ ager of Shell South Africa, told Britain that he suspected South Africa’s national oil company, SASOL, played a major role in the trade.99 By midyear it was readily apparent that any efforts short of a major con­ frontation with South Africa would not stem the flow of petroleum prod­ ucts to Rhodesia. Not only could Rhodesia easily draw its supplies from the Transvaal, the oil companies had begun competing to supply the demand.100 On June 2, Walker wrote to Dirk de Bruyne of Shell Centre London that we are under considerable pressures here, and any hope the UK gov­ ernment may have about the oil companies actively enforcing the blockade are indeed forlorn. Our own attitude must be that if any cat­ egory of customer is entitled to buy a product and provides proper security for payment, we have to supply. The meaning of this, of course, is that the “oil boycott” has collapsed completely.101

Rhodesia’s ability to draw oil from the South Africa market fed pres­ sures to make participation in the oil embargo mandatory for all UN members. To prevent the extension of mandatory oil sanctions against South Africa, Britain devised a plan in November 1966 to table a proposal in the Security Council for mandatory economic sanctions against Rhode­ sia that omitted any specific reference to oil. An amendment calling on all countries to prevent “the participation by the nationals or vessels under their registration in the supply of oil and oil products to Rhodesia” would then be inserted by a friendly African government. By omitting any

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specific mention of South Africa and Mozambique, Britain hoped to deflect the growing pressure for action against South Africa and reassure it of the limited aims of British policy. If necessary, Britain would also reassure South Africa publicly that it would not be party to enforcement measures aimed at that state.102 When Rhodesia failed to settle at the Tiger talks, mandatory oil sanctions against the colony became inevitable. Britain tabled its proposal in the Security Council and accepted an amend­ ment that covered imports of oil into the colony. In accepting the amend­ ment, however, Britain also explained to the Security Council that the measures were aimed at Rhodesia only; it would not allow sanctions to escalate into confrontation with third countries. Privately, it explained to South Africa that Britain was not “prepared to engage in a full confronta­ tion” with that country.103 On December 16, the UN Security Council voted mandatory sanctions, including oil, against Rhodesia. Resolution 232 obligated all members of the United Nations to halt the flow of oil to Rhodesia, but it was—by design—a resolution lacking enforcement mech­ anisms. Despite Britain’s unwillingness to publicly restrict the flow of oil to southern Africa, it still sought to intensify the oil embargo through more covert mechanisms. Throughout the first two years of the embargo, the British government together with the oil companies explored various options for limiting Rhodesia’s ability to draw oil from the South African market. Their latitude for action, however, was severely constrained by their mutual desire to avoid a confrontation with South Africa. In Febru­ ary 1968, for example, Shell changed its shipping practices from the port of Lourenco Marques to make any diversions of product to Rhodesia more costly and to ensure that oil from its British subsidiaries did not reach Rhodesia. Shell stressed to the British government, however, the need to keep the move “completely secret,” not only from South Africa, but from the U.S. and French governments as well. Shell feared that other companies would use the knowledge to damage Shell’s position in South Africa.104 The upshot of these concerns was that any option which involved even the slightest change in the oil companies’ traditional com­ mercial practices was ruled out because it would come to the attention of the South African government. Moreover, even if Britain and the British oil companies could agree on a scheme, there was no guarantee that it would be implemented by the lower level staff in South Africa. Rhodesia’s defiance of Britain was very popular in South Africa—a local depot man­ ager was more likely to turn the blind eye to a shipment bound for Rhode­ sia than to follow a company directive whose intent was to end the Rhode­ sian rebellion.105 As a result of these difficulties, Britain’s objectives in the oil embargo

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underwent a subtle but profound change. If it could not prevent oil from reaching Rhodesia, it at least had to ensure that the oil Rhodesia obtained was not British oil. According to Lord Thomson, foreign and common­ wealth secretary at the time:

So it was against this background that we [the government] came increasingly to the conclusion ... that we couldn’t bring the Rhode­ sian Government to an end by sanctions, unless we were prepared to apply them to South Africa. We were under no circumstances willing to do that, and therefore ... we came to the conclusion, I think, that the best we could make of a bad job in this respect was to be in a posi­ tion to say at least there was no oil from British oil companies reach­ ing Rhodesia.106

Britain’s new attitude was a recognition of the limits of its own poli­ cies, and it did little else to stop the flow of oil to Rhodesia. Its initial skep­ ticism had proved correct—the oil embargo would not bring the Rhode­ sian rebellion to an end. The embargo collapsed for a number of reasons, among them the difficulty of controlling the foreign subsidiaries of the oil companies and the connivance of South Africa and Portugal in busting the sanctions. The most important, however, was South Africa’s very credible threat to retaliate against any measure that affected its own supplies of oil. This not only determined the parameters of British policy, it also under­ mined any attempts by the oil companies and their South African sub­ sidiaries to limit the flow of oil to Rhodesia. Because supplying Rhodesia would not precipitate a crisis between Britain and South Africa, these companies no longer had any real basis for defying South African edicts. Louis Walker, the general manager of Shell South Africa, testified that Britain’s desire to avoid confrontation led him to change his efforts from taking actions to impede the flow of Shell product into Rhodesia to simply staying within the letter of the law.107 As a result, commercial concerns came to dominate the oil companies’ actions; enforcing the oil embargo was now simply a matter of style over substance.

Rhodesia Responds to the Oil Embargo

Rhodesia shared Britain’s skepticism about the probable effectiveness of an oil embargo. It clearly recognized the political factors, particularly its own hold on Zambia, that made it extremely difficult for Britain to impose an embargo, much less make one effective. Moreover, Rhodesia had obtained assurances that oil would continue to flow to the colony even if

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an embargo were imposed. According to a contemporary report by Jorge Jardim, a Portuguese businessman intimately involved in southern Africa’s oil trade as well as Portuguese politics: They [Rhodesia] had received a guarantee from the French company “Total” that if “Shell” did not carry out regular supply to Feruka, they would take matters into their own hands and carry out supply with their own crude oil. They also had at their disposal, so I was told, offers of crude oil from other quarters to which they would have recourse in case of necessity.108

In fact, Rhodesia was so confident that Britain would not impose an oil embargo that it had initially neglected to undertake precaution­ ary measures as basic as stockpiling. In mid-October 1965, Rhodesia’s gasoline stocks amounted to only twenty-seven days’ consumption, while stocks of other fuels were as low as fourteen days’ supply. The oil companies’ stocks at Beira were also well below maximum levels.109 In late October, however, Rhodesia had second thoughts and began build­ ing stocks.110 By late November, the crude-oil storage tanks at the Feruka refinery were completely full, and those in Beira were nearly so. Rhodesia now had almost a ninety days’ supply of oil and was con­ strained from building stocks any further by a lack of storage capac­ ity.111 Thus, when Britain imposed the oil embargo, it did not catch Rhodesia unawares. The embargo presented Rhodesia with two immediate problems. The first was to limit consumption. Although Rhodesia had both stockpiled oil in anticipation of an embargo and received assurances that Total would continue supplying the Rhodesian market, there is no evidence that Rhodesia had actually arranged for the delivery of alternate supplies. Given the possibility of a considerable delay before any new supplies came on line, Rhodesia now had to make current supplies stretch as far as pos­ sible, a task it accomplished through rationing. Petrol rationing was intro­ duced shortly after Christmas and was the first concrete sign for most Rhodesians that economic sanctions were being imposed on their country. Except for a brief period between 1972 and 1974, rationing became a con­ stant feature of everyday Rhodesian life. Even more pressing than rationing existing supplies, however, was the problem of procuring new sources. To do this, Rhodesia first turned to the local subsidiaries of the five oil companies that served its market. On December 20,1965, the Rhodesian government directed the local market­ ing companies to continue operating on a normal basis, except that it now required an export license for shipments of petroleum products to Zambia.

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The following day, the government tightened its grip on the oil industry with the Emergency Powers (Control of Manpower in Petroleum Products Industry) Regulations 1965. These regulations enabled the government to assume control of the oil companies and CAPREF should they act con­ trary to the national interest. They also prohibited anyone working in the oil industry from either resigning or leaving the country.112 On January 1 and again on January 25, the government further directed the companies to find agents to procure for import into the country refined petroleum products.113 Despite the Rhodesian government’s legal authority to direct the local oil companies to continue supplying the Rhodesian market, the com­ panies were hesitant to do the government’s bidding. On December 25, for example, Shell informed the Rhodesian government that it would no longer supply the CAPREF refinery or store crude oil for delivery to the refinery at Beira. Although CAPREF and the Rhodesian government threatened legal action, Shell remained adamant. Its Beira storage facility belonged to Shell Mozambique, which was a London-registered sub­ sidiary and thus covered under the sanctions order.114 A similar incident occurred with Mobil, which quit pumping from its Beira storage tanks on December 25. This time, however, the legal issues proved less clear-cut, and Mobil resumed pumping three days later.115 Nonetheless, the com­ pany demonstrated that it was responsive to sanctions orders, this time imposed by the United States. Finally, the local heads of the British and U.S. oil companies operating in Rhodesia met with the Rhodesian gov­ ernment on January 12. The government demanded that the companies either provide the government with crude oil storage facilities at Beira or sell their facilities to a Portuguese buyer lined up by the government, and it backed its demand with the threat to shut the companies out of the Rhodesian market completely should they refuse. The companies (politely) declined the government’s request.116 By mid-January, then, the Rhodesian government found itself in dire straits. On the one hand, despite its legal authority to control the local oil companies, it proved unable to compel them to continue supplying crude oil to Beira. Even Total appeared to renege on its earlier promises to sup­ ply Rhodesia. According to a Jardim account of a meeting with M. de Metz, the president of CFP (Total) on January 13, 1966, de Metz insisted that “the CFP would not provide the slightest facility, either direct or indi­ rect, for the implementation of any scheme designed to evade the embargo.”117 On the other hand, the supply of refined products via the South African market was still impeded by South Africa’s own cautious approach to the crisis. Until South Africa had a clearer idea of the limits of British policy and the effect of Rhodesian purchases on its own supply

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situation, Rhodesia would not be able to draw supplies from its whiteruled neighbor. Fortunately for Rhodesia this period was short-lived. By late Janu­ ary, South Africa had announced its policy of no conditional sales, thus assuring that Rhodesia could draw refined supplies from the South African market. However, even if the immediate crisis was solved, the Rhodesian government was still smarting from the oil companies’ fickle behavior in December and January. No longer willing to entrust Rhode­ sia’s supplies of crude oil to the oil companies, the government created a parastatal authority, GENTA (whose name is an anagram of agent),118 to procure the colony’s supplies of crude. The Rhodesian government further directed CAPREF to cancel its existing feedstock contracts with the oil companies and to offer instead a long-term contract for crude supplies to GENTA.119 The Rhodesian government was now in the oil business. Without a secure source of crude, Rhodesia turned to South Africa and Mozambique for refined products. South Africa’s prohibition on con­ ditional sales had created a thriving market for petroleum products in the northern Transvaal. The market was unregulated and initially involved a free-for-all between five different types of actors: private South African groups such as the Friends of Rhodesia, which solicited donated petrol; South African companies, which would order oil in excess of their own requirements and then ship the surplus on to Rhodesia; agents acting for the Rhodesian oil companies who would arrange delivery from the com­ panies’ South African affiliates and other sources; private operators who bought petroleum wholesale in South Africa and then resold it inside Rhodesia; and finally GENTA, which initially acted to procure the gov­ ernment’s own supplies of oil. Each actor secured its own sources of sup­ ply and, depending on the source, arranged for its transport to Rhodesia either by road via the Beit Bridge or by rail via Lourenco Marques. Once the oil reached Rhodesia, it was normally resold to the Rhodesian oil com­ panies (if they were not the original importer) and then rationed under the government scheme then in place. The flow of refined product from South Africa and Mozambique allowed Rhodesia to obtain most of its petroleum requirements, but at a steep price. One reason was higher transport costs. For example, the ship­ ment of product via the Beit Bridge was extremely expensive as road haulers were not as efficient as the railroads. Likewise, the railroads were less efficient than the out-of-service Beira-Feruka pipeline. A more important reason, however, was simply the scarcity of petro­ leum products in Rhodesia. Demand for petroleum is highly inelastic. For many uses, it is a critical input with few or no substitutes. As a result, even minor disruptions in the supply of oil can cause prices to rise dramatically.

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This was the case in Rhodesia. Actors wishing to import oil into that coun­ try were often forced to pay hefty premiums for their product. Although I know of no detailed statistics concerning Rhodesia’s oil trade at this time, one can obtain a general picture of the extent to which prices rose by examining the government’s (secret) aggregate import figures for the cate­ gory Fuel, Lubricants and Electricity. They show that in 1966, the quan­ tity of imports in this category declined by 12 percent from 1965 levels, while unit prices rose by almost 78 percent.120 In other words, sanctions had increased Rhodesia’s oil bill by more than 50 percent. Moreover, many of these costs fell directly on the Rhodesian government through its attempts to ration consumption. The Rhodesian oil companies often paid more for their petroleum than what they could recover by selling it at the government-set ration price.121 Unwilling to let sanctions gut the oil indus­ try, the government ultimately absorbed these losses by reimbursing the oil companies for any “extraordinary” costs incurred in supplying the country with refined products.122 The high price for petrol in the Rhodesian market also attracted a number of free-lance operators into the oil trade. These operators sought to capture the difference between the lower prices available in South Africa and the much higher prices currently obtaining in Rhodesia by importing oil into the colony and selling it off-ration. As one Rhodesian businessman told the Rand Daily Mail, “Anybody can turn himself into an oil company, go down to South Africa, find a wholesale source of supply and bring it up to Rhodesia to sell at retail prices.”123 By mid-April, a number of South African and Rhodesian businessmen had started setting up shop to supply the off-ration market. On April 29, the Rhodesian government intervened to stop the incip­ ient off-ration market by prohibiting the import of petroleum products by road from South Africa except under special license. On May 9, the gov­ ernment widened its special licensing requirement to include all petroleum imports into the colony whether by road or rail. The Rhodesian govern­ ment made the move to “prevent profiteering” and “because certain indi­ viduals and groups have seriously hampered the national effort in obtain­ ing supplies of fuel.”124 Moreover, to discourage cross-border fill-ups, the government also announced a special import duty on Rhodesian autos and motorcycles that left the country for less than two days. These moves proved to be only the first in a series in which the Rhodesian government established complete control over the oil trade. Not long after, it also pro­ hibited the Rhodesian oil companies from importing their own supplies of petroleum fuels. By May 29, the Rhodesian government, through GENTA, was the monopoly importer of all petroleum fuel products into the colony.125

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The government’s move rationalized what was a haphazard process for supplying the colony. Under the new system, GENTA became the sole legal importer of petroleum fuels. The basic procedure was simple. GENTA placed its orders for petroleum products with South African agents acting on its behalf. These agents, in turn, ordered the petroleum from the South African companies and arranged for its transport to Rhodesia.126 GENTA then took control of the oil and resold it to the Rhodesian oil companies who marketed it throughout the colony.127 In effect, GENTA now acted in the oil market by intervening between the foreign seller of the sanctioned product—the South African oil compa­ nies—and the local buyer—the Rhodesian marketing companies. Rhodesia created an import monopoly in the oil market for several reasons. First, it sought to eradicate the emerging private off-ration mar­ ket. Although the off-ration market provided an additional source of sup­ ply for Rhodesian customers, this was, paradoxically, not a beneficial development from the Rhodesian government’s point of view. Economi­ cally, the off-ration market threatened to impose further economic losses on the Rhodesian economy to the extent that profits captured there were repatriated to South Africa. By taking over petroleum imports and acting as a monopolist in the market, the government could itself extract these rents from domestic consumers. Thus, at the same time that it ended the unlicensed import of petrol, the government raised petrol’s ration price by 25 percent.128 GENTA also placed a 5 to 6d surcharge on the wholesale price of each gallon of petroleum fuel imported into the country. Accord­ ing to a 1974 BP memorandum, “Marketers [the Rhodesian oil companies] purchase fuels from GENTA on cash terms at prices which . . . have allowed GENTA a handsome margin over procurement cost.”129 The gov­ ernment originally intended to use the surcharge to cover the extraordi­ nary costs incurred in the early days of the oil embargo, but never lifted it.130 GENTA’s pricing policies pushed the level of gas prices in Rhodesia to the highest in the world.131 Second, creating a monopoly in the import market provided the gov­ ernment with a very effective tool for controlling the behavior of the domestic oil companies. The Rhodesian government clearly distrusted the local oil companies because of their early reactions to the sanctions orders and was never quite certain that they would continue to act in the govern­ ment’s interest. According to Shell Rhodesia’s notes of one industry meet­ ing with the government, it was “highly suspicious of the Industry and at one stage of the interview inference was made to the Industry’s ulterior motives.”132 Nor was the Rhodesian government’s suspicion unjustified. The parent oil companies in the early phases of the embargo had cooper­ ated closely with Britain in seeking ways to enforce the sanctions direc­

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tives. Even the Rhodesian subsidiaries were of questionable loyalty. In August 1968, for example, the managing director of Shell/BP in Rhodesia offered to secretly erode Rhodesia’s foreign currency assets if Britain would allow Shell South Africa to import large quantities of lubricants into Rhodesia. He claimed that he could accomplish this “without the notice of the authorities.”133 By taking an active role in the market, the Rhodesian government could keep an eye on the oil companies. Thus, Shell’s notes of its meeting with the Rhodesian government further record that the government sought an active share in the CAPREF refinery because it was “seeking an ‘agency’ to participate in the right role to ensure that CAPREF represents a vehicle through which the Government has an interest in the oil industry as a whole, and can create a wider diversity of supply.”134 GENTA also extended the government’s control over the local oil companies by severing their direct commercial ties to their sister compa­ nies outside Rhodesia. Caltex and Shell, for example, explored ways to repatriate profits earned in Rhodesia through transfer pricing. They wanted their South African affiliates to charge prices for intracompany shipments that were far above actual cost. This system would make the companies’ Rhodesian profits appear lower than their actual value and South African profits higher. Manipulating prices in this manner ran directly counter to the interests of the Rhodesian government. Not only did it entail circumventing the government’s currency exchange controls, it also would impose additional losses on the Rhodesian economy as these profits flowed abroad.135 Yet, transferring profits by manipulating intracompany prices proved impossible on a large scale because there was almost no direct financial contact between the Rhodesian companies and their South African affiliates. All importing of petroleum fuel was done by GENTA, which then resold it to the local companies in local currency. Because this system ended intracompany trade, there was simply no underhand route by which local companies could transfer profits to their South African affiliates. According to British Petroleum’s internal investigation of the company’s role in busting sanctions, “Shell and BP have since UDI received no divi­ dends in respect of their continued shareholding through Consolidated in these companies.”136 In fact, the Bingham inquiry found no evidence that the Rhodesian oil companies were able to transfer any significant amounts of foreign currency out of the country.137 In addition, because GENTA occupied a monopoly position in the import market, it could directly determine the fortunes of the local oil companies. Although in practice GENTA preferred to maintain the sta­ bility of the domestic oil market by ensuring that each company received

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supplies of oil roughly in proportion to its pre-UDI share of the market, there was no question that the companies depended upon the continued favor of GENTA to operate profitably. This made the companies reluc­ tant to undertake any action which would jeopardize their standing with the government. For example, Shell Rhodesia invested much effort in establishing a close relationship with GENTA and saw this as a definite commercial advantage. According to a letter from R. F. Barrie, Shell Rhodesia’s general manager: Incidentally it is an ironic fact that in terms of physical gallons accruing to the Group from supplies to Rhodesia we have a bigger slice of the cake through present methods than we would have if CAPREF came back on stream.... We have created, I think it is fair to say, an out­ standing rapport with GENTA, the Government fuel buying agency. This rapport causes us from time to time to make certain joint repre­ sentations and take joint trips south of the Limpopo. It is a rapport which causes us to be well in the van in terms of personal associations and contriving for the best possible share of supplies to Rhodesia.138

A final reason for the Rhodesian government’s decision to create a monopoly in the import market for oil concerns its relations with the for­ eign oil companies. By creating a single actor to import oil from world markets, the Rhodesian government sought to gain market power over the foreign sellers of petroleum products. GENTA negotiated prices and quantities directly with the South African oil companies on a quarterly basis. This not only allowed it to serve as a watchdog over the oil compa­ nies’ behavior, it also enabled it to seek the best possible price by having the companies bid against each other. According to Jardim, once a stable pattern of supply was established, “GENTA even started to haggle over prices and to demand rebates” from the South African oil companies.139 GENTA appears, however, to have been only partly successful in securing the lowest prices for its product. According to an internal BP doc­ ument, the South African oil companies colluded against GENTA. Supply prices are negotiated between GENTA and the Cape Town company representatives and used to be based on PG [Persian Gulf] import parity direct into Lourenco Marques plus various handling and associated charges.... By “agreement” between the Cape Town companies GENTA are now given level quotes based on highest PG posting for product—previously GENTA negotiated only on the basis of the lowest posting to which companies were bound to adhere if they wished to maintain a full outlet.140

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Although they continued to supply Rhodesia with oil, the South African oil companies paradoxically made the oil embargo more effective than it would have been otherwise. For by colluding to set prices against GENTA, they extracted rents from the Rhodesian economy and thus increased the costs that sanctions were imposing on the colony. Conclusion

Within six months of the oil embargo, Britain’s skepticism and Rhodesia’s confidence had proved correct. An oil embargo would not bring the Rhodesian rebellion to heel. Yet the conventional interpretation that the embargo represents the failure of British policy and provides a compelling example of the futility of using economic sanctions to pursue important foreign policy goals is wrong. As we have seen, Britain imposed the embargo to send a credible signal to black Africa and the Commonwealth that its desire to establish eventual majority rule in Rhodesia was genuine, and thus to defuse growing pressures for more drastic, and dangerous, actions against the colony. Judged against this standard the embargo was highly successful. The oil embargo also contradicts in another way the conventional wisdom that sanctions rarely achieve important foreign pol­ icy goals. Britain’s latitude to pursue an embargo was severely constrained by South Africa’s explicit threat to retaliate against British economic inter­ ests should its own oil supplies be disrupted. South Africa’s ability to set the parameters of British policy represents a stunning, and previously unrecognized, instance of the successful use of economic sanctions. The oil embargo also demonstrates how governments can alter the underlying institutional structures of the market to manipulate the behav­ ior of the actors in them. The oil embargo fundamentally altered the way in which petroleum products were imported into and sold in the colony. Under the pressure of sanctions, the Rhodesian government created a parastatal agency, GENTA, which intervened between the international and domestic segments of the petroleum market. At first glance, such a move seems unnecessary. By late May, when the government imposed its ban on the private import of petroleum fuels into the economy, it was already clear that the embargo had been broken. Britain was unwilling to provoke a conflict with South Africa and came to accept the flow of oil as inevitable. South Africa, for its part, was unwill­ ing to see the embargo succeed. It had not only pressured the South African subsidiaries of the oil companies to end conditional sales, it had ensured the continued flow of oil to all of southern Africa through an explicit threat to retaliate against any interference in the oil trade. These two countries’ positions led to the emergence of a thriving market for sup­

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plying Rhodesia in which GENTA was only one of many different actors who were initially importing petroleum products into the colony. Thus, the outlines of a “market” solution to the oil embargo were clearly visible. A number of private actors had responded to higher prices in the Rhode­ sian market by figuring ways to supply it. Yet, the Rhodesian government quashed this private trade in oil. As this chapter has pointed out, the government’s move was motivated by both economic and political factors. Economically, the government sought to exploit GENTA’s position between international and domestic markets in two ways. Internationally, GENTA acted as a monopsonist when seeking supplies for the Rhodesian market. As the sole buyer of petroleum fuels for the Rhodesian market, it hoped to obtain the lowest possible price for its imports. However, because it could not prevent the oil companies from colluding upstream of the Rhodesian market, GENTA was only partly successful in this effort. Domestically, GENTA used its monopoly position to extract rents from Rhodesia’s economy. The oil trade became a significant source of government revenue—revenue that would otherwise have been captured by private actors (and perhaps flowed abroad) had the government not intervened. But the government’s reasons for intervening also had an explicit political component. The Rhodesian government clearly distrusted the Rhodesian oil companies and used GENTA’s monopoly position as a means to exert power over them. By making GENTA the sole source of imported petroleum fuels, the government was able to determine the mar­ ket shares of the local companies in the Rhodesian market and hence their profitability. This made the local companies dependent upon GENTA’s (and the government’s) favor for continued profitability. It also impeded any attempts by the local companies to escape the government’s clutches through transfer pricing. The collapse of the oil embargo against Rhodesia is often used as an example of the difficulties states have in controlling the behavior of multi­ national companies. Britain could not control the behavior of its oil com­ panies’ South African subsidiaries, which continued to supply oil to the rebellious colony. Ironically, the South African and Rhodesian govern­ ments also worried about controlling the transnational behavior of the oil companies—this time of those operating within their borders. Rhodesia solved its problem by restructuring the market within which these compa­ nies acted. Thus, the oil embargo against Rhodesia serves not only as an example of how the cross-border activities of private actors may impede a state’s ability to pursue foreign policy objectives, but of how a state may intervene between domestic and international markets to extend political power over transnational actors acting within its borders.

CHAPTER 7

Economic Sanctions, Political Economy, and the Racial Unity of White Rhodesia

In 1971, Ian Smith and Sir Alec Douglas Home negotiated a tentative agreement that would have granted independence to Rhodesia on terms that were highly favorable to the Rhodesian Front. The Smith-Home agreement would have delayed majority rule until the twenty-first century and left the Rhodesian Front in firm control of the country’s politics. This proved to be the high-water mark of the Rhodesian Front’s gambit for independence, for shortly thereafter the RF suffered a series of irreversible setbacks. The first setback came when Britain rejected the Smith-Home agree­ ment as the basis for independence. Britain insisted that the agreement be “acceptable to the people of Rhodesia as a whole,” one of the five princi­ ples for Rhodesian independence first enunciated by Harold Wilson in 1965.1 When the Pearce Commission, which had been formed by Britain to ascertain Rhodesian opinion, reported in 1972 that the agreement was opposed by the overwhelming majority of the colony’s blacks, Britain had no choice but to retract its offer.2 Although economic sanctions remained in force, the whole episode convinced Rhodesia’s black nationalists that sanctions would never generate enough pressure on the Smith regime to produce majority rule, prompting them to intensify a hitherto sporadic and ineffective guerrilla war. Pressure on the Smith regime escalated further in 1973, when the first of the decade’s oil and commodity price shocks rippled through the econ­ omy, and again in 1974-75, when the collapse of Portuguese Africa opened a 600-mile sanctuary for guerrilla operations along the border with Mozambique.3 Rhodesia found it could no longer generate the economic growth necessary either to finance the war effort, thereby forcing it to rely on South Africa for material and financial support, or to absorb the increasing number of black youths entering the labor market, creating a growing pool of potential recruits for the black nationalist armies.4 Rhodesia’s final setback came when South Africa decided to seek détente with black Africa, which meant, in turn, pressuring Rhodesia to 163

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accept majority rule. Although Smith was highly popular in South African public opinion, the South African government had always been lukewarm toward the Smith government and UDI. South Africa never recognized Rhodesia’s independence; it assisted Rhodesia more out of political neces­ sity than any fundamental agreement with the policies and objectives of the Rhodesian Front government. By 1974, the collapse of Portuguese Africa and the escalating war in Rhodesia threatened to mire South Africa in a widening conflict. This led South Africa to make clear to all concerned that it would support a moderate majority-ruled government in Rhodesia and to begin to pressure Rhodesia toward that end. Thus, by the mid-1970s, Rhodesia found itself increasingly hemmed in by the cumulative effects of economic sanctions, the world economic downturn, and an intensifying guerrilla war that threatened to engulf all of southern Africa.5 The subsequent years were marked by a number of attempts to resolve the growing crisis. In 1976, under intense pressure from South Africa, Smith conceded the principle of a rapid transition to majority rule.6 In 1978, the worsening situation led the Smith government to conclude an “internal settlement” with the nationalist leaders Abel Muzorewa and Ndabaningi Sithole. Despite Muzorewa’s election as prime minister of “Zimbabwe-Rhodesia” in April 1979, the settlement failed to gain international recognition because it excluded the Patriotic Front, an armed coalition between Robert Mugabe’s ZANU (the Zim­ babwe African National Union) and Joshua Nkomo’s ZAPU (the Zim­ babwe African People’s Union). These were the two most important nationalist parties and the primary combatants in the war against the white regime. In mid-1979, Britain undertook a new initiative to mediate an end to the war by convening a series of all-party talks at Lancaster House which, much to everyone’s surprise, ended with an agreement that December. In February 1980, elections were held under the supervision of the Commonwealth. On April 18, 1980, Britain granted formal indepen­ dence to majority-ruled Zimbabwe under the leadership of Robert Mugabe. Nearly fifteen years after the Rhodesian Front declared UDI, the Rhodesian crisis was finally over. One of the most striking features of the Rhodesian rebellion was the apparent unity of white Rhodesia behind the government of Ian Smith and the Rhodesian Front. Rhodesian politics was limited to narrow debates about the details of specific government policies. The great issues confronting Rhodesia elicited little public discussion. Both during the ini­ tial phases of the UDI period, when the primary pressures on Rhodesia arose from economic sanctions, and later, when Rhodesia faced a deepen­ ing economic and military crisis, open political opposition to the Smith

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regime was confined to a succession of small, electorally unpopular parties on the fringes of the political spectrum. To the outside world, Rhodesia appeared a bastion of white unity. One of the central themes of this book has been to understand how economic sanctions contributed to this outcome. The most common explanations of white Rhodesian unity argue either that economic sanc­ tions, because they threatened the values of white Rhodesian society as a collective whole, forged political integration among its members, or that an “inner law” of Rhodesian politics led to the closing of the white com­ munity whenever its political supremacy was challenged. Neither is satis­ factory. The first explanation was proposed by Johan Galtung in his 1967 study of Rhodesia. It has since become one of the literature’s key conclu­ sions regarding the domestic political consequences of sanctions and so forms a critical element of the prior knowledge that shapes expectations and research about economic sanctions.7 Galtung argues that sanctions impose collective deprivations upon a society that, in turn, cause its mem­ bers to rally behind the government to ward off the common threat. The primary evidence for this proposition is the behavior of the business com­ munity. As we have seen, however, there is little support for this proposi­ tion. The business community consistently opposed the RF government and favored a settlement with Britain. The absence of outspoken political opposition to the Rhodesian Front government in late 1965 and early 1966 (which is precisely the period upon which Galtung bases his findings)* resulted from a strategic choice by the senior leaders of the Rhodesian business community not to speak out until economic sanctions had imposed significant hardships on the Rhodesian economy. Once sanctions began to bite, the business community began to pressure the Rhodesian government to reach a settlement with Britain, pressure that increased until the business community’s showdown with the Smith regime in 1968. In short, Galtung’s highly influential theory fails to explain the very case from which it was derived. The second explanation, that Rhodesian unity sprang from a need for racial solidarity when confronting challenges to white power, is in many ways more compelling. The cultural divide that separated white and black Rhodesia was vast. Most whites could not conceive of blacks as their social or political equals.9 In addition, the violence and instability that other African countries sometimes suffered in the aftermath of decolo­ nization, as well as nationalist violence inside Rhodesia, only underscored the perceived dangers of handing power to nationalist parties. Conse­ quently, immediate majority rule was a frightening prospect to many of

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Rhodesia’s whites, especially those who benefited most from the market­ distorting racial laws that were the central structures of the Rhodesian economy. Yet racial solidarity also falls short as an explanation of white unity under sanctions. It cannot explain why the business community until 1968 pressured the regime to settle with Britain, a goal that necessarily implied eventual majority rule in Rhodesia. It also cannot explain why the Smith regime, despite its neglect of rural interests, was impervious to attacks by political entrepreneurs who sought to mobilize the grievances of farmers. Nor can it explain why some groups, such as the business community and even the RNFU, responded to the deepening economic and military crisis of the 1970s, not by retreating into a white laager (to borrow a term from South Africa’s racial conflict), but by exploring the possibility of accom­ modation with the nationalists. In fact, even within the Rhodesian gov­ ernment, a growing rift developed from 1972 onward between military and intelligence professionals who argued for a political settlement and politi­ cians within the Smith regime committed to preserving white rule.10 Neither explanation, moreover, can account for the often bitter divi­ sions and deep mistrust that emerged within the white community. If sanc­ tions generated norms of “shared sacrifice” or “white solidarity” that led whites to rally in defiance of sanctions, these norms should be evident not only in the public expressions of political loyalty to the RF government and the absence of political opposition, but also in how different elements of the white community responded to the deprivations of sanctions. When examined closely, however, there is little evidence that sanctions generated norms of “shared sacrifice” among those segments of the white community most hurt by them. The mood among tobacco growers was one of “every man for himself’ in which smaller growers “would go to the wall,” creat­ ing internal tensions that nearly shattered the RTA.11 Growers were also intensely bitter over the “unfair” burdens they were forced to shoulder, especially as the commercial sector began to prosper from sanctions. Among the business community, individual businessmen were deeply sus­ picious that foreign exchange allocations would be manipulated to their disadvantage, while profound sectoral divisions emerged between industry and commerce over their relative shares of foreign exchange. In fact, it was precisely because norms of voluntary shared sacrifice did not emerge that societal actors needed coercive government institutions, such as the Tobacco Corporation or the import control and foreign currency alloca­ tion schemes, to compel them to act in the collective economic interest. Most important, neither explanation can account for the array of coercive mechanisms—such as the government’s ability to deny an agri­ cultural subsidy, production quota, or foreign currency allocation—by

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which the Rhodesian Front controlled white political debate. These fea­ tures of Rhodesian politics stand as a glaring anomaly to any explanation of Rhodesian unity based on norms of group or racial solidarity. In a soci­ ety in which government censorship was pervasive, political dissent was treated as treason, and the government’s extensive links throughout the economy allowed it to credibly and severely punish those who might openly challenge its rule, it is highly problematic to assert that Rhodesia’s political unity represented the instinctive upwelling of political support in defense of some overarching white interest. If white solidarity had been the natural or instinctive response of the white community to the imposition of sanctions or the prospect of majority rule, these mechanisms would have been superfluous because significant political opposition would never have arisen within white ranks. Yet as we have seen, these coercive instru­ ments exerted a profound influence on Rhodesian politics. This compels us to turn from explanations of white unity based on norms of group or racial solidarity toward explanations that show how white unity was polit­ ically constructed by the Rhodesian Front as it sought to advance its vision of Rhodesia’s future. Until the setbacks of the 1970s, the most significant political problem facing the Rhodesian Front was the need to prevent the emergence of a competing centrist coalition that would seek independence on the basis of a multiracial compromise with Rhodesia’s nationalists. In chapter 3, we saw how the Rhodesian Front and nationalist parties tacitly cooperated to undermine support for such a multiracial coalition in the years prior to UDI by deliberately polarizing Rhodesian politics along racial lines. Both parties gambled that by undermining the possibility of a multiracial com­ promise, they would compel Britain to impose a uniracial solution to the Rhodesian problem: either immediate majority rule (sought by the nation­ alists) or the indefinite perpetuation of white minority rule (sought by the Rhodesian Front). Both parties overplayed their hands. For Britain, the basic dilemma of Rhodesian politics, how to secure “African acquiescence in a solution which [did] not destroy the European position in Rhodesia,” was “a constant.”12 This led it to reject solutions that entailed either the “one man, one vote” that was demanded by nationalists or the recognition of minority rule that was sought by the Smith regime. Yet none of the parties—Britain, the nationalists, or the Rhodesian Front—proved strong enough to impose a unilateral solution to the crisis. This now confronted the Rhodesian Front with a significant political problem. The Rhodesian Front had come to power with the tacit support of the nationalists. Should Britain’s determination to construct a multira­ cial compromise to the Rhodesia crisis convince the nationalists that accommodation was now the best path for achieving power in Rhodesia or

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cause disaffected whites to move away from the Rhodesian Front, a cen­ trist challenge to the Rhodesian Front could reemerge in Rhodesian poli­ tics. To prevent this possibility, the Rhodesian Front needed both to poi­ son the nationalist goodwill necessary for compromise to work, which it accomplished by strengthening the colony’s already repressive racial laws, and to silence any significant white advocates of a centrist, multiracial solution.13 Thus, when Britain imposed economic sanctions in November 1965, the Rhodesian Front seized the opportunity to strengthen its hold on Rhodesian politics. In chapter 2,1 used standard economic theory to show how economic sanctions create societal demands for government intervention to reverse the sanctions’ windfall losses and how these societal demands enable tar­ get governments to restructure the domestic economy in ways that both consolidate their domestic political power as well as suppress domestic political dissent. The theory appears well borne out by Rhodesia’s politi­ cal and economic behavior under sanctions. In each market, sanctions generated collective action dilemmas that imposed windfall losses on domestic actors: hence the demand for the government to create new insti­ tutions to recapture and allocate these windfalls. This was most apparent in the case of tobacco, where tobacco growers demanded the creation of the Tobacco Corporation to defend prices in the export market, but was evident in other markets as well. The business community sought govern­ ment policies that maintained their access to the foreign exchange and imports made suddenly scarce by sanctions. The Rhodesian Front government generally responded to these domestic demands by erecting new economic institutions in the affected markets. In the tobacco and oil markets, it created the Tobacco Corpora­ tion and GENTA to regulate the economy’s links with world markets. In the commercial and manufacturing sectors, it created new systems for allo­ cating foreign exchange and import licenses. The only exception to this pattern appears to be in the mining sector, where the government’s will­ ingness to extend direct control over the industry was somewhat tempered by its need to attract foreign investment. But even here, it showed no qualms about extending direct control over specific markets in which it suspected that companies might act against the government’s interests, and it still possessed numerous mechanisms for controlling industry behavior. Thus, Univex’s control over the chrome trade mirrored the arrangements in tobacco and oil. These new market institutions, moreover, functioned in the ways pre­ dicted by the theory. Externally, they eliminated price competition among domestic actors in order to minimize the windfall that foreign actors reaped from sanctions. The Tobacco Corporation and GENTA created

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government monopolies over the colony’s tobacco and oil trade. And even for less important goods, the government used its system of foreign cur­ rency allocations and import licenses to ensure that only one Rhodesian firm imported a given good into the economy, thus granting that firm some monopoly power in negotiating prices with foreign suppliers. Domestically, these institutions made an individual firm’s ability to pros­ per in the market dependent upon the possession of some key good that was available only from the government or its agents. In tobacco, the Tobacco Corporation determined the grower’s production quota. In oil, GENTA allocated market shares to the local subsidiaries of the five oil companies, while the government used rationing to allocate access to these companies’ petroleum supplies among end users. For the mining, com­ mercial, and industrial firms of Rhodesia’s traditional business establish­ ment, the government determined the degree to which they could import critical goods from world markets by a system of foreign currency alloca­ tions and import licenses. Most important, these institutions enabled the government to consol­ idate its power over domestic politics by rewarding political compliance and suppressing domestic dissent. On the one hand, the government’s dis­ cretion to grant individuals access to key goods enabled it to create net­ works of political loyalty in the economy. By the early 1970s, the govern­ ment’s ability to determine which firms profited from sanctions and Rhodesia’s tremendous industrial expansion enabled it to build significant political support within the commercial and industrial sectors of the busi­ ness community. This weakened the business community’s ability and willingness to openly express its dissent of government policy. On the other hand, not only did the government’s treatment of poten­ tial opponents such as Frank Clements or William Harper demonstrate that the government would retaliate harshly against efforts to mobilize and organize a viable political opposition, but its extensive control over key economic goods made the threat to retaliate highly credible. Business­ men feared that the government would cut their foreign exchange quotas or deny them an import license if they openly spoke out against the Rhodesian Front, while farmers who openly opposed the government risked losing their production quotas or agricultural subsidies. This highly credible threat had a profound effect on Rhodesian politics. No major per­ sonality emerged to challenge the government in the political arena, even though there was widespread discontent with the disastrous consequences of UDI and sanctions. The threat of retaliation also led the business com­ munity to distance itself from the succession of liberal parties that chal­ lenged the Rhodesian Front in the political arena, as well as ensured that rural protest emerged as an incoherent smattering of independent candi-

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dates that offered no real political threat to the government. Likewise, mainstream political opposition was either expressed anonymously—as in the Forum’s attempts to work behind the scenes—or, if expressed publicly, was narrowly limited in scope and consciously couched in terms that explicitly affirmed the actor’s loyalty to the Rhodesian Front government. The net effect was to reinforce the legitimacy of the government’s claim to represent a unified polity, as the only open political opponents to the regime were those clearly on the fringes of the political spectrum. Finally, the government used its control over markets to seed sub­ stantial conflicts of interest between market actors. In the tobacco market, the system of intragroup subsidies by which the larger growers subsidized smaller ones generated a deep division within the industry that nearly tore the Rhodesian Tobacco Association apart. Likewise, the foreign currency allocation and import licensing systems generated a high degree of mis­ trust between businesses who feared that others might prosper at their expense. Even in the oil market, GENTA’s discretion in allocating market shares among the five subsidiaries made them distrustful of one another. The consequences for Rhodesian politics were profound. Not only did these conflicts generate substantial levels of mistrust, which is highly cor­ rosive to any form of collective action, they also caused individual actors (and even the representative economic associations) to compete directly for the government’s favor as a way to ensure that they received the “best possible share”14 of whatever the government was allocating, be it a pro­ duction quota, foreign exchange allocation, or market share. This again reinforced the impression of widespread government support. By exploring the political economy of economic sanctions, we thus arrive at a compelling alternative explanation for the unity of white Rhodesia under sanctions. By showing how sanctions generate the demand for government intervention in the marketplace, we can now explain how the Rhodesian Front used sanctions to extend its control over the economy. By showing how the Rhodesian Front could use these new market institutions to reward its friends and divide and punish its oppo­ nents, we can explain how this government extended its control over the polity and why strong opposition never emerged, either from the Rhode­ sian business community or from Rhodesia’s neglected agricultural inter­ ests. And, because these institutions continued to structure Rhodesian political and economic life during the mounting crises of the 1970s, we can understand why even these shocks proved unable to fracture Rhodesia’s facade of white unity. White unity emerged not because economic sanc­ tions activated norms of group or racial solidarity, but because the Rhode­ sian Front government was able to disorganize any significant political opposition and exclude even the discussion of credible alternatives to its

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rule from emerging on the domestic political agenda. White unity was, in short, politically constructed.

Implications for Understanding Economic Sanctions

This study has sought not only to explain Rhodesian politics under sanc­ tions, but to engage in a broader dialogue between theory and evidence that generates a set of highly plausible propositions that explain how eco­ nomic sanctions, and international economic shocks more generally, affect a country’s domestic politics. This dialogue raises three important issues: to what extent is my explanation of Rhodesia’s behavior under sanctions generalizable to other cases; what directions does it suggest for future research; and what advice does it generate for policymakers who wish to employ sanctions? Generalizability

My explanation of the influence of economic sanctions on Rhodesia’s domestic politics should be readily generalizable to other cases of eco­ nomic sanctions. Most important, I ground my explanation of Rhodesia’s responses to sanctions in “high leverage” deductive theory.151 use stan­ dard economic theory to show how the economic shocks of sanctions gen­ erate the political demand for new institutions that use the power of the state to compel individuals to act in the collective economic interest, and how the government can supply these institutions in ways that suppress dissent and build networks of loyal political support. My emphasis on an explicit, deductive theoretical model helps me to extract the general causal processes that are refracted through the particularities of the Rhodesian case. The model’s generality also suggests that my findings should be applicable across a significant range of similar cases. In fact, Rhodesia’s domestic responses to economic sanctions do not appear unique but rather to be representative of the responses of many states to the major imposition of economic sanctions. The tendency of sanctions to cause extensive government penetration of the domestic econ­ omy and to consolidate domestic political support for the target govern­ ment are widely noted responses to sanctions. For example, in his study of the UN economic sanctions against Italy, George Baer found: Sanctions were used by the Italian government to intensify statism and to consolidate Mussolini’s personal rule. What was meant to be only instrumental economic pressure to elicit internal protest was

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transformed by the Italian government into a cause for rapid intensification of integral economic and political nationalism.... For Italians, the period after sanctions brought exaggerated demands for autarchy [and] increased illiberal state control.16 Likewise, when economic sanctions were applied against Cuba in the 1960s, Fidel Castro responded with a series of nationalizations that both mitigated the harmful economic effects of sanctions and also intensified Castro’s totalitarian control of that country’s economic and political life.17 More recently, Susan Woodward found that sanctions against Serbia increased “the power of the government and Milosevic personally in the need to ration goods and determine which enterprises will receive subsi­ dies, which workers will be unemployed and whether farmers, veterans, pensioners, and the army will have income.”18 In a similar vein, Alan Dowty found that the ability to ration goods made scarce by sanctions, in this case food, is a key instrument by which the Iraqi government “serves to discourage any challenges,” and that “in the Shi’ite areas, in particular, the government’s control of much of the available food is a powerful weapon.”19 All of these cases suggest that the model I have developed in this study captures a fundamental causal mechanism by which sanctions influence a target country’s domestic politics. An Agenda for Research

This study has two major implications for research on economic sanctions. The first major implication is that it provides a series of highly plausible, deductive hypotheses about the ways in which sanctions influence domes­ tic politics that need to be explored in other cases and settings. The most important task is to apply the model to other cases of sanctions to discern the extent to which the causal mechanisms identified in this study provide insight into the domestic political behavior of other states facing similar external economic shocks. Another task is to explore other important hypotheses that follow from the model. Because we can now explain how target governments can manipulate economic sanctions to consolidate their domestic political power, we can also begin to propose and explore possible explanations for any empirical variations in this outcome that we might observe as we expand our sample to include more cases. For example, we can expect eco­ nomic sanctions to be most likely to strengthen the target government’s domestic political power when they are applied against goods for which the target country’s demand (in the case of import sanctions) or supply (in

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the case of export sanctions) is highly inelastic. Sanctions against these types of goods are most likely to generate demands for government inter­ vention in the economy, because these sanctions will impose the greatest economic costs and windfall transfers on the target economy for a given disruption of trade. Moreover, because domestic actors cannot readily shift into alternative markets, they will be more vulnerable to, and more willing to comply with, the target government’s attempts to shape their political behavior by manipulating their ability to participate in the sanc­ tioned markets. In fact, this proposition suggests why the domestic “uni­ fying” effects of sanctions seem so ubiquitous: because in seeking to impose significant economic damage on the target economy, sanctioning governments tend to impose the types of sanctions that are most likely to lead to this outcome. Conversely, we can expect sanctions to be least likely to strengthen the domestic political power of the target government when they are applied against goods for which the target country’s demand (in the case of import sanctions) or supply (in the case of export sanctions) is highly elastic. The reasoning is straightforward. The lower the opportunity costs at which actors can shift into alternative markets, the less intensely they will demand government institutions to reverse their windfall losses. Like­ wise, government attempts to shape the political behavior of domestic actors by controlling access to the sanctions windfalls lose their effective­ ness when domestic actors can shift their economic activities into alternate markets at little or no cost. Another proposition along this line suggests that more comprehen­ sive sanctions are more likely to strengthen the domestic political power of the target government than less comprehensive sanctions. The more mar­ kets or sectors that are affected by sanctions, the greater the government’s penetration of the economy and the more instruments it can create to reward compliance and punish dissent. This proposition helps to explain why even devastating comprehensive economic sanctions, such as those against Iraq or Serbia, nonetheless failed to subvert the regimes governing these countries. A final proposition is that economic sanctions will be less likely to promote the consolidation of the target government’s domestic political power if they are directed against goods that are demanded by government but not by societal actors. In this instance, the target government cannot use discretionary access to the good as an instrument for shaping the polit­ ical behavior of domestic actors. One important category of good that fulfills this condition is military armaments, suggesting that the unifying effects of sanctions are less likely in cases of arms embargoes, even though

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an arms embargo may present a greater and more direct threat to that country’s national security than broad-based economic sanctions designed to damage the target country’s economy. The second major implication of this study for sanctions research is to emphasize the gains in knowledge that can be created by shifting the focus of sanctions research from seeking to determine the degree of “success” of sanctions to understanding the causal mechanisms by which sanctions affect the behavior of targeted actors. Given that policymakers will con­ tinue to use sanctions to pursue a wide range of foreign policy goals, the most valuable knowledge that scholars can provide is not whether sanc­ tions have “worked” in the past, but what the consequences of using them in concrete situations will be. To produce this knowledge requires explana­ tory theories of how sanctions influence behavior, precisely that area of sanctions research that has been neglected by the literature in the past.20 Implications for Policymakers

One important implication that follows from this study is that sanctioning governments often confront a trade-off between the level of economic damage that they inflict on important groups in the target economy and the degree to which they enable the target government to consolidate its domestic political power. As we have seen, sanctions generate powerful societal demands for government policies to mitigate their costs, which the target government can then exploit to capture the political loyalty of hurt groups. The tobacco boycott, for example, strengthened the government’s power over the growers, leaving growers powerless to influence govern­ ment policy once the disastrous consequences of sanctions for the tobacco sector became clear. The existence of this trade-off casts considerable doubt on the arguments that sanctions usually fail because weak multilat­ eral enforcement impedes the imposition of high economic costs on politi­ cally relevant constituencies or that multilateral enforcement is therefore a necessary precondition for the successful use of sanctions.21 It also under­ cuts the widespread “naive” theory of sanctions that the success of sanc­ tions will be directly related to the level of economic damage they inflict on the target country. I must emphasize, however, that this trade-off does not mean that eco­ nomic sanctions are likely to fail or that policymakers should never use sanc­ tions to threaten or impose significant economic costs on the target country. First, whether sanctions “work” is not an intrinsic quality of sanctions per se or the trade-offs they create, but a result of the purposes for which they are used. These cannot be determined in the abstract but only with refer­ ence to the specific array of objectives that policymakers pursue in actual

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episodes of sanctions. Second, I have only explored one of several simul­ taneous causal processes by which sanctions affect the behavior of tar­ geted actors. Sanctions exert influence along multiple pathways with dif­ ferent effects over different periods of time; understanding how these pathways intersect and shape different elements of the target’s behavior is critical to accurately gauge the appropriateness of sanctions as a policy. For example, even though the Rhodesian government was able to manip­ ulate the impact of sanctions to suppress white domestic political opposi­ tion, it could not negate the harmful cumulative economic effects of sanc­ tions. A lack of investment in the colony combined with the economic inefficiencies created by sanctions left the government ill-equipped to man­ age the commodity price shocks of the 1970s and the growing civil war. Sanctions thus played an important long-term role in forcing the Smith government to accept majority rule, even as they enabled it to entrench its political control over Rhodesia’s white community. Third, successful sanc­ tions sometimes require sanctioning countries to impose significant harm­ ful economic costs on the target society. As the analysis of the Rhodesian oil embargo shows, the failure of Britain’s initial package of economic sanctions to impose immediate and substantial economic costs on Rhode­ sia raised considerable doubts among black Africa and the Common­ wealth about the sincerity of Britain’s commitment to majority rule. Only by imposing considerable economic damage on Rhodesia could Britain credibly demonstrate to these actors its commitment to majority rule, pre­ vent the breakup of the Commonwealth, and deflect pressures for even more drastic actions against the colony. This led Britain not only to impose the embargo, but to make it as effective as possible in imposing high costs on Rhodesia, even though Britain rightly suspected that it would not force Smith to come to terms. Likewise, Britain was responsive to South Africa’s threat to impose countersanctions precisely because South Africa could credibly threaten to impose unacceptable economic damage on Britain’s economy, while black Africa could not. A second important implication of this study is that policymakers should be extremely wary of any advice based solely on the analysis of past instances of the “success” or “failure” of economic sanctions. Wise policy choices require policymakers to weigh the trade-offs between using alter­ native policy instruments to pursue foreign policy goals. Policymakers must accurately forecast both the intended and unintended consequences of alternative courses of action and then weigh these projected conse­ quences against the range of objectives they pursue. Yet the advice derived from most studies of whether sanctions “work” is unlikely to yield this information. These studies (and the advice they produce) tend to suffer from many of the problems identified in the introduction to this book,

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such as faulty analytical frameworks for assessing sanctions, the failure to compare sanctions against plausible alternative policies, or the use of biased samples of sanctions cases. These studies also tend to rely on implicit, murky, and undeveloped causal models of how sanctions influence the behavior of targeted actors, making them likely to generate misleading advice about whether, when, and how to apply sanctions in specific settings.22 In other words, unless scholars can base their advice to policymakers in well-grounded causal models that explain what will hap­ pen if the state uses sanctions and why, policymakers should treat their advice with skepticism because it will not contain the knowledge necessary to make intelligent policy choices.

Implications for Political Economy

Finally, by trying to understand how economic sanctions influenced the domestic politics of Rhodesia, this study has sought to advance our under­ standing of the ways in which economics and politics interact to shape political outcomes. First, by exploring how the Rhodesian government reorganized the domestic economy in response to sanctions, this study contributes to the literature on collective action. One of the central findings of this literature is that governments can undermine collective opposition through the judi­ cious use of selective incentives that can be targeted at individual support­ ers of the regime and selective disincentives that can be targeted at its opponents. A central theme of this book has been to explain how the gov­ ernment can structure markets in ways that accomplish this goal. Consis­ tent with the literature on collective action, we found that the ability of the Rhodesian government to single out and punish those individuals who opposed the government, while rewarding those who supported it, explains a great deal about Rhodesian politics and, especially, the emer­ gence of white unity in response to sanctions. And yet anomalies emerge. The fact that the Rhodesian government could target individual businessmen for punishment does not explain the social ostracism of those who did speak out openly, nor does it explain why such strong norms of “politics and business don’t mix” emerged among this community. For if political opposition only brought punish­ ment upon those who engaged in it, why should it be openly scorned by those who did not, even when they shared an interest in changing govern­ ment policy? Likewise, the fact that the government could punish individ­ ual farmers does not fully explain the electoral weakness of the political entrepreneurs who tried to mobilize their grievances. In anonymous

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forums such as secret ballot elections, in which the actions of individuals are hidden from government scrutiny, the ability of the government to seek out and punish individuals loses much of its force as a means of con­ trolling political behavior. Yet a strong protest vote never materialized among Rhodesia’s agricultural producers, despite intense dissatisfaction with government policy. To explain these anomalies, we must shift our attention from the indi­ vidual disincentives that the government could mete out against its indi­ vidual opponents, to the punishments that it could impose on groups that threatened to become centers of opposition. The market institutions that the Rhodesian government erected in the aftermath of sanctions created public goods as well as private ones. For example, businessmen (at least those endowed with an allocation) obtained foreign exchange at belowmarket prices, while tobacco growers (and other agricultural producers) obtained above-market prices for their produce. Because these public goods were created by government agencies, the government could always respond to political opposition by halting production of whatever public good the particular sector enjoyed, or by changing the rules that allocated the good among users. This had a subtle but profound effect on the nature of political oppo­ sition in Rhodesia. Because the government could impose costs on each individual member of a sector in retaliation for the opposition of a few, the Rhodesian government attached a negative externality to the act of politi­ cal opposition. This transformed efforts by political entrepreneurs to articulate and mobilize the grievances of potential opposition groups from a public good into an act that threatened the interests of all group mem­ bers. Consequently, even if an individual privately agreed with the objec­ tives of the regime’s opponents, it was in his or her own self-interest to denounce those efforts if they risked triggering generalized retaliation by the government.23 The government’s ability to take back the public goods it provided in the economy thus encouraged the political conformity among economic actors. Consequently, the Rhodesian business commu­ nity (and Rhodesian politics generally) became marked by strong norms such as ‘‘don’t rock the boat” or “leave politics to politicians,” while those who spoke out against the government were ostracized by the very people they sought to represent. A second contribution of this study is that it deepens our understand­ ing of international economic interdependence. The political vulnerabili­ ties inherent in international economic exchange are cast in sharpest relief by economic sanctions, for sanctions are an explicit attempt by some states to manipulate the economic dependence of others for political gain. What we find, however, is that the vulnerability of a country’s economy to inter­

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national economic shocks must not be confused with the political vulner­ ability of its government. The Rhodesian Front not only survived sanc­ tions, even though they devastated one of its most important political con­ stituencies, but it used sanctions to consolidate its hold on Rhodesian politics. This has several implications for how we think about states and their behavior in the international political economy. First, it becomes highly problematic to associate governments with specific economic interests, even when those interests are important domestic constituencies. Once the tremendous costs of insulating the tobacco growers from the adverse con­ sequences of sanctions became apparent, the Rhodesian Front govern­ ment dissociated itself from the growers by undermining their power to act collectively in Rhodesian politics. In this way, the Rhodesian Front dissi­ pated much of the political pressure generated by the external collapse of the tobacco market. The Rhodesian government’s ability to dissociate itself from the for­ tunes of one of its most important constituencies demonstrates that gov­ ernments (and politicians generally) possess considerable autonomy from the interests of domestic economic actors. They will promote the interests of specific economic actors when it is politically advantageous do so and neglect them when it is not. Moreover, the organizations that “represent” economic interests in the political arena often serve less as the agents of eco­ nomic actors than as the agents of politicians for organizing and sustaining political support within the economy. Under both UFP and Rhodesian Front rule, we saw how the government used the representative economic associations such as ARnI or ACCOR as instruments of the state. Because politicians choose when and how to mobilize economic inter­ ests as political actors, the economic interests that appear on the domestic political agenda are not external to the political process, they are a prod­ uct of it. This fact calls into question any set of theories that views the organization of a society’s economic interests into political demands as unproblematic. These theories include not only domestic approaches to the study of politics, such as economic pluralism, interest group politics, or Marxian class analysis, but also theoretical traditions in international rela­ tions, such as realism, that treat states as unitary actors with structurally determined interests. The “autonomy” of politics from economics is thus of critical impor­ tance for students of international political economy.24 It signifies that a state’s economic interests are not exogenously given by the structure of the international economy or group or class interests, but endogenously defined through a domestic political process. This compels us to move away from theories of international political economy that treat states as

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unitary actors, and toward theories that explain how the domestic and international levels interact. The third major area of political economy to which this study con­ tributes is the “second image reversed” or open polity literature of com­ parative political economy.25 Like the open polity school, this study has sought to understand how international economic shocks reverberate in the conflicts that characterize a country’s domestic politics. It also built its analysis on an economic model that shows how international economic shocks generate domestic political preferences. Yet unlike the open polity literature, this study does not assume that the actors that populate economic models are political actors. It is politi­ cians who, through their competition for political power, determine how economic interests become represented in the polity. This raises three issues. The first is to understand the ways in which politicians organize and disorganize economic interests as political actors. As we have seen, gov­ ernments shape the ability of economic actors to become political ones by determining their capacity to undertake collective action. The Rhodesian Front was able to induce most businessmen to retreat from the political arena by threatening to impose substantial penalties on those firms and businessmen that openly opposed it, while conferring benefits on those who supported it. As a consequence, the Rhodesian Front destroyed the capacity of the business community to act in Rhodesian politics and thus precluded the possibility that a centrist coalition might emerge to chal­ lenge its control of government. Likewise, as the tremendous costs of insu­ lating Rhodesia’s tobacco growers from sanctions became apparent, the Rhodesian Front government responded by disorganizing this group as a political actor. Once the driving force in Rhodesian politics, tobacco growers now found themselves abandoned by the government that they had delivered to power and unable to protect their economic interests. The second issue is the importance of institutions in determining the ways in which politicians shape the political behavior of economic actors. As this study emphasized, the Rhodesian government’s power to organize and disorganize actors in the political economy resulted directly from the institutions that structured the colony’s major markets. The Rhodesian government could control the political behavior of tobacco growers because the Tobacco Corporation gave it the power to determine a grower’s production quota; it could control the political behavior of busi­ nessmen because its currency allocation schemes gave it the power to determine a firm’s allocation of foreign exchange; finally, it could control the behavior of the oil company subsidiaries because GENTA gave it the power to determine each company’s market share. In addition, because these institutions delivered both private and public benefits to their respec­

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tive sectors, we have also seen how the Rhodesian government used them to transform political opposition in these markets from public goods into public bads. These economic institutions, however, were not preexisting features of the Rhodesian political economy; each emerged in response to the eco­ nomic shocks of sanctions. The third major issue, then, is to explain how economic sanctions, and international economic shocks more generally, influence a country’s domestic politics. This requires a theory of institu­ tional change. Developing such a theory was the central theoretical focus of this study. On the one hand, by showing how economic sanctions dis­ rupt economic outcomes in sanctioned markets, it explained how sanc­ tions generated an interest among economic actors to create institutions that allocated resources in patterns other than those determined by the unconstrained operation of the market. On the other hand, by showing that the institutional capabilities sought by these domestic economic actors—the ability to monitor and coerce their individual behavior in sanctioned markets—also enabled the government to control their politi­ cal behavior, this study also explained why the government would create these institutions and how it would use them. Through the study of economic sanctions, we thus arrive at an impor­ tant research frontier. For we find that institutions do not stand outside politics; they are a product of it. Politicians create institutions in moments of opportunity to build the foundations for sustained political power. And, because it is a country’s politicians who build institutions, it is ulti­ mately they who, in their competition for power, determine how interna­ tional economic shocks affect domestic politics.

Notes

Chapter 1

1. This is the central theme of David Baldwin, Economic Statecraft (Prince­ ton: Princeton University Press, 1985). 2. Avoiding military conflict is the traditionally recognized role of sanctions. It predominated the debate surrounding the use of sanctions in the League of Nations. For the early development of the sanctions literature see M. S. Daoudi and M. S. Dajani, Economic Sanctions: Ideals and Experience (London: Rout­ ledge and Kegan Paul, 1983). Article 41 of the UN Charter also includes sanctions as one of the means by which the Security Council can seek to enforce interna­ tional peace. Among the acceptable nonmilitary forms of coercion it lists the “complete or partial interruption of economic relations.” 3. In the case of Iraq, sanctions were key in building the international con­ sensus for military force. Sanctions provided an initial, less coercive step around which consensus could be built and, once it became apparent that sanctions alone were inadequate, the justification for using force. Had sanctions not offered this intermediate step, creating a broad international coalition to expel Iraq would have been much more difficult if not impossible. 4. Baldwin, Economic Statecraft, 132-33. 5. Baldwin, Economic Statecraft, 102-6. 6. See the section “Building Theories about Economic Sanctions.” 7. Margaret Doxey cogently argues that reinforcing norm-based behavior is a central function of economic sanctions (Doxey, International Sanctions in Con­ temporary Perspective [London: MacMillan, 1987], chap. 1). On the role of sanc­ tions as punishment, see Richard Kim Nossal, “International Sanctions as Inter­ national Punishment,” International Organization 43 (spring 1989): 301-22. 8. Robert A. Pape, “Why Economic Sanctions Do Not Work,” International Security 22 (fall 1997): 90. 9. Richard N. Haass, “Sanctioning Madness,” Foreign Affairs (November/December 1997): 74-85; Kimberly A. Elliott, “Economic Sanctions,” in Intervention into the 1990s: U.S. Foreign Policy in the Third World, ed. Peter J. Schraeder (Boulder: Lynne Rienner, 1992). 10. See especially Jonathan Kirshner, “The Microfoundations of Economic Sanctions,” Security Studies 6 (spring 1997): 32-64, and “Political Economy in Security Studies after the Cold War,” Review of International Political Economy 5 (spring 1998): 64-91.

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Notes to Pages 2-3

11. Among recent works, see, for example, Jean-Marc Blanchard and Norrin M. Ripsman, “Asking the Right Question: When Do Economic Sanctions Work Best,” Security Studies 9 (fall/winter 1999/2000): 219-53; A. Cooper Drury, “Revisiting Economic Sanctions Reconsidered, ” Journal of Peace Research 35 (1998): 497-509; Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott, Economic Sanctions Reconsidered, 2d rev. ed., 2 vols. (Washington, D.C.: Institute for International Economics, 1990) as well their first edition published in 1985; Jaleh Dashti-Gibson, Patricia Davis, and Benjamin Radcliff, “On the Deter­ minants of the Success of Economic Sanctions: An Empirical Analysis,” American Journal of Political Science 41 (April 1997): 608-18; Robert A. Pape, “Why Eco­ nomic Sanctions Do Not Work” and “Why Economic Sanctions Still Do Not Work,” International Security 23 (summer 1998): 66-77; Kimberly Ann Elliott, “The Sanctions Glass: Half Full or Completely Empty?” International Security 23 (summer 1998): 50-65; T. Clifton Morgan and Valerie L. Schwebach, “Fools Suf­ fer Gladly: The Use of Economic Sanctions in International Crises,” International Studies Quarterly 41 (March 1997): 27-50; David Cortright and George A. Lopez, eds., Economic Sanctions: Panacea or Peacebuilding in a Post-Cold War World? (Boulder: Westview, 1995). 12. Works that are optimistic about the utility of economic sanctions include William Minter and Elizabeth Schmidt, “When Sanctions Worked: The Case of Rhodesia Re-examined,” African Affairs 87 (April 1988): 207-37; James M. Lind­ say, “Trade Sanctions as Policy Instruments: A Reexamination,” International Studies Quarterly 30 (1986): 153-73; Daoudi and Dajani, Economic Sanctions; Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered, both volumes; and Baldwin, Economic Statecraft. Prominent examples of works doubting the effectiveness of sanctions are Pape, “Why Economic Sanctions Do Not Work” and “Why Economic Sanctions Still Do Not Work”; Morgan and Schwebach, “Fools Suffer Gladly”; James Barber, “Economic Sanctions as a Policy Instrument,” International Affairs 55 (July 1979): 367-84; Margaret Doxey, Economic Sanctions and International Enforcement (London: Oxford University Press, 1971); Johan Galtung, “On the Effects of Economic Sanctions, with Examples from the Case of Rhodesia,” World Politics 19 (April 1967): 378-416; Frederik Hoffman, “The Functions of Economic Sanctions: A Comparative Analysis,” Journal of Peace Research 2 (1967): 140-60; Donald Losman, International Economic Sanctions: The Cases of Cuba, Israel, and Rhodesia (Albuquerque: University of New Mexico Press, 1979); and Robin Renwick, Economic Sanctions (Cambridge: Cambridge University Press, 1981). 13. This is especially true of Hufbauer, Schott, and Elliott’s study Economic Sanctions Reconsidered See Baldwin, Economic Statecraft, 371. 14. Baldwin, Economic Statecraft, 132. 15. See also David M. Rowe, “Economic Sanctions Do Work: The Oil Embargo of Rhodesia Reconsidered,” Security Studies 9 (fall/winter 1999/2000): 254-87. 16. Baldwin, Economic Statecraft, 371-72. 17. Kirshner, “Political Economy in Security Studies,” 70.

Notes to Pages 3-4

183

18. This analytical flaw is especially glaring in Pape, “Why Economic Sanc­ tions Do Not Work,” and “Why Economic Sanctions Still Do Not Work.” 19. Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered, both edi­ tions. 20. See Drury, “Revisiting Economic Sanctions Reconsidered”; Pape, “Why Economic Sanctions Do Not Work” and “Why Economic Sanctions Still Do Not Work”; Dashti-Gibson et al., “On the Determinants of the Success of Economic Sanctions”; Peter A. G. van Bergeijk, “Success and Failure of Economic Sanc­ tions,” Kyklos 2 (1989): 385-404; Lisa L. Martin, Coercive Cooperation: Explain­ ing Multilateral Economic Sanctions (Princeton: Princeton University Press, 1992); George Tsebelis, “Are Sanctions Effective? A Game Theoretic Analysis,” Journal of Conflict Resolution 34 (1990): 3-28; Shane Bonetti, “A Test of the Public Choice Theory of Economic Sanctions,” Applied Economic Letters 4 (1997): 729-32; Shane Bonetti, “Distinguishing Characteristics of Degrees of Success and Failure in Economic Sanctions Episodes,” Applied Economics 30 (1998): 805-13. 21. Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered (1985), 3. 22. Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered (1985), 3.; Pape, “Why Economic Sanctions Do Not Work.” 23. On the need to have good explanatory theory as a prerequisite for pre­ scriptive theory see Alexander George, “Case Studies and Theory Development: The Method of Structured, Focused Comparison,” in Diplomacy: New Approaches in History, Theory and Policy, ed. Paul Gordon Lauren (New York: Free Press, 1979), 48. Also, using observable cases of success to develop prescriptions for when sanctions should or should not be used is inherently flawed. It conflates the issue of policy “success” with that of the “optimal policy choice.” (For example, one can­ not infer from a heart attack victim’s death that performing CPR was wrong or should not have been attempted.) See David M. Rowe, “Sanctions, Success, and Foreign Policy Choice,” chap. 2 of “Surviving Economic Coercion: Rhodesia’s Responses to International Economic Sanctions,” Ph.D. dissertation, Duke Uni­ versity, 1993. 24. Galtung, “On the Effects.” 25. Kim Richard Nossal, Rain Dancing: Sanctions in Canadian and Australian Foreign Policy (Toronto: University of Toronto Press, 1994), 11. For example, Merle Lipton wrote in a 1988 study of sanctions against South Africa that “the the­ ory underlying . . . economic sanctions is that the costs they inflict on the target country will lead its rulers to act ‘rationally’ by amending their policies so as to secure the removal of the penalties” (Lipton, Sanctions and South Africa: The Dynamics of Economic Isolation, Special Report No. 1119, The Economist Intelli­ gence Unit, London, January 1988, 6). For other examples of how this theory has persisted in the literature, see Richard C. Porter, “Economic Sanctions: The The­ ory and the Evidence from Rhodesia,” Journal of Peace Science 3 (fall 1978): 93; Richard Stuart Olson, “Economic Coercion in World Politics: With a Focus on North-South Relations,” World Politics 31 (July 1979): 474; and Losman, Interna­ tional Economic Sanctions, 1-2. 26. See especially Kirshner, “The Microfoundations of Economic Sanctions.”

184

Notes to Pages 5-8

27. Nossal, Rain Dancing, 263. Likewise, Richard Stuart Olson writes, “The objective of most attempts at sanction is to foster divisions between elements of the elite, or between the elite and the general populace, or both” (“Economic Coer­ cion,” 474). 28. There are, of course, notable exceptions. Johan Galtung’s work on Rhode­ sia was an early effort at theory building as was Olson’s “Economic Coercion.” More recently, see the important body of work by William H. Kaempfer and Anton D. Lowenberg, especially International Economic Sanctions: A Public Choice Perspective (Boulder: Westview, 1992), as well as Charles M. Becker, “Eco­ nomic Sanctions against South Africa,” World Politics 39 (January 1987): 147-73. 29. Lindsay, “Trade Sanctions”; Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered (1985 ed.), 29; Nossal, Rain Dancing, 9-10. 30. Galtung, “On the Effects,” 409. 31. Drew Christiansen and Gerard F. Powers, “Unintended Consequences,” Bulletin of Atomic Scientists 49 (November 1993): 41-45. On sanctions against Ser­ bia, see Susan L. Woodward, “Yugoslavia: Divide and Fail,” Bulletin of Atomic Scientists 49 (November 1993): 24-27. Nossal writes that “‘the rally-round-theflag’ phenomenon seems to be so pervasive that there are exceedingly few cases one can point to in which this phenomenon did not make an appearance” {Rain Danc­ ing, 10-12). See also Galtung, “On the Effects”; Hufbauer, Schott, and Elliott, Economic Sanctions Reconsidered (1985), 10; Renwick, Economic Sanctions, 88-89; Anna P. Schreiber, “Economic Coercion as an Instrument of Policy: U.S. Mea­ sures against Cuba and the Dominican Republic,” World Politics 25 (April 1973): 404. 32. Baldwin, Economic Statecraft, 193. 33. This is ironic as Galtung intended his work to be a pilot study designed to map out a research agenda of issues to be explored, not a confirmed theoretical statement about the likely consequences of sanctions. Interestingly, his arguments about the unifying effects of sanctions became conventional wisdom, while the agenda he mapped out has been almost completely ignored by subsequent scholars of sanctions. 34. The Unilateral Declaration of Independence was issued by the Rhodesian government on November 11,1965. 35. Harry Eckstein, “Case Study and Theory in Political Science,” in Hand­ book of Political Science vol. 7, Strategies of Inquiry, ed. Fred I. Greenstein and Nelson W. Polsby, 79-137 (Reading, Mass.: Addison-Wesley, 1975); Timothy McKeown, “Case Studies and Statistical Worldview: Review of King, Keohane, and Verba’s Designing Social Inquiry: Scientific Inference in Qualitative Research,” International Organization 53 (winter 1999): 161-90. 36. See, for example, Baldwin, Economic Statecraft, 189-204; and Minter and Schmidt, “When Sanctions Worked.” 37. Emphasis in original. Excerpt is from an oral history by the BBC, pub­ lished as Michael Charlton, The Last Colony in Africa: Diplomacy and the Inde­ pendence of Rhodesia (Oxford: Basil Blackwell, 1990), 98-99. 38. Major negotiations were the Tiger talks in 1966; the Fearless talks in 1968;

Notes to Pages 9-12

185

the Smith-Home agreement of 1971; talks prompted by U.S. interest in Africa in the mid-1970s; and finally the Lancaster House agreement of 1979. 39. Personal interview, London, November 1989. 40. Formally, Rhodesia possessed a nonracial constitution in which an indi­ vidual’s ability to vote was determined by his level of education and personal wealth. These qualifications were set, however, in ways that excluded all but a minuscule proportion of blacks from the franchise. 41. Interestingly, the advertisement was dropped after it became public that the picture was of a Girl Guide troop. Rhodesia had for some time accepted racial integration in the Guide and Scout movements (Frank Clements, Rhodesia: A Study of the Deterioration of a White Society [New York: Frederick A. Praeger, 1969], 177). 42. Note of a Meeting Between Mr. George Thomas, Minister of State for Commonwealth Affairs and Mr. Garfield Todd, at the Commonwealth Office, 10:30 am, Wednesday, November 1, 1967, PRO PREM 13/2319. 43. Chitepo, who was leader-in-exile of the Zimbabwe African National Union (ZANU), was killed on March 11,1975, by a car bomb planted by Rhode­ sian agents. The assassination threw ZANU into disarray as some blamed warring factions within ZANU itself for the act (Stephen John Stedman, Peacemaking in Civil War: International Mediation in Zimbabwe, 1974-1980 [Boulder: Lynne Rienner, 1991], 62-65). 44. The most extensive economic analyses of Rhodesia’s race relations have been by radical political economists working in the Marxist tradition. The first and most influential work was Giovanni Arrighi, The Political Economy of Rhodesia (The Hague: Mouton, 1967). 45. Mugabe recounting a conversation with Muzorewa; emphasis in original (Charleton, The Last Colony, 80). See also Victor De Wal, The Politics of Recon­ ciliation: Zimbabwe’s First Decade (London: Hurst, 1990), 48. 46. David Caute, Under the Skin: The Death of White Rhodesia (London: Allen Lane, 1983), 17. 47. “Directive: Policy in Relation to Rhodesia,” MISC.100/A/3, November 19, 1965, PRO CAB 130/254. 48. It is not clear who the British source was. The source was apparently of sufficient rank to participate in the discussions (Note for the Prime Minister, December 14,1966, PRO PREM 13/1113). 49. Air Vice-Marshall Harold Hawkins, commander of the Rhodesian air force at the time of UDI, quoted in Charlton, The Last Colony, 96. Hawkins would later be Head of Mission in South Africa and the foreign affairs adviser to Bishop Muzorewa in the Lancaster House talks. 50. Of course, this still leaves open the question of whether any settlement would have been acceptable to the majority of black opinion. The acceptability of any settlement to the people of Rhodesia as a whole was one of Britain’s principles of negotiation, and the Smith-Home agreement of 1971 foundered when the Pearce Commission concluded that the agreement was overwhelmingly opposed by Rhodesia’s black populace. However, it is an open question how, in 1968, Wilson

186

Notes to Pages 12-20

would have interpreted this principle in practice. One Rhodesian negotiator at the Fearless talks claimed that Wilson assured Smith that the test of black opinion would not stand in the way of an agreement (Personal interview, Harare, January 1992). 51. Robert E. Christiansen, “Implementing Strategies for the Rural Economy: Lessons from Zimbabwe, Options for South Africa,” World Development 21 (1993): 1550; Zimbabwe: Country Profile (London: The Economist Intelligence Unit, 1993/94), 9. 52. The open polity school is most closely associated with the work of Ronald Rogowski and Jeffry Frieden. See, for example, Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domestic Political Alignments (Princeton: Princeton University Press, 1989); Jeffry A. Frieden, Debt, Development, and Democracy: Modern Political Economy and Latin America, 1969-1985 (Princeton: Princeton University Press, 1991); and Jeffry Frieden and Ronald Rogowski, “The Impact of the International Economy on National Policies: An Analytical Overview,” in Internationalization and Domestic Politics, ed. Robert Keohane and Helen Milner (New York: Cambridge University Press, 1996). Another important work in this vein that focuses on the role of firms is Helen Milner, Resisting Protectionism (Princeton: Princeton University Press, 1988). 53. For example, Rogowski, Commerce and Coalitions, 4-5. 54. Ronald Rogowski, “Trade and the Variety of Democratic Institutions,” International Organization 41 (1986): 203-23; Frieden and Rogowski, “Impact of the International Economy.” 55. Peter Gourevitch, Politics in Hard Times: Comparative Responses to Inter­ national Economic Crises (Ithaca: Cornell University Press, 1986). 56. See, for example, Geoffrey Garrett and Peter Lange, “Internationalization, Institutions, and Political Change,” International Organization 49 (autumn 1995): 627-55. 57. McKeown, “Case Studies”; and Ronald Rogowski, “The Role of Theory and Anomaly in Social-Scientific Inference,” American Political Science Review 89 (June 1995): 467-70. 58. Personal interview, Harare, January 1992. 59. United Kingdom, “Rhodesia: Report of the Commission on Rhodesian Opinion under the Chairmanship of the Right Honourable Lord Pearce, Presented to Parliament by the Secretary of State for Foreign and Commonwealth Affairs” (London: Her Majesty’s Stationery Office, 1972). 60. “Policy Directive,” MISC.100/A/3. 61. Robert H. Bates, Avner Greif, Margaret Levi, Jean-Laurent Rosenthal, and Barry R. Weingast, Analytic Narratives (Princeton: Princeton University Press, 1998), 10.

Chapter 2

1. On the new institutionalism in political science, see Peter A. Hall and Rose­ mary C. R. Taylor, “Political Science and the Three New Institutionalisms,” Polit-

Notes to Pages 21-23

187

ical Studies 44 (1996): 936-57. For institutional critiques of the open polity litera­ ture, see Robert H. Bates, Open Economy Politics: The Political Economy of the World Coffee Trade (Princeton: Princeton University Press, 1997), and Geoffrey Garrett and Peter Lange, “Internationalization, Institutions, and Political Change,” International Organization 49 (autumn 1995): 627-55. 2. Note that I limit my analysis to trade sanctions, although many of my con­ clusions regarding the ability of governments to manipulate sanctions to suppress dissent and encourage political support may be applicable to sanctions involving the disruption of monetary and aid flows. Jonathan Kirshner makes a powerful argument about the need to consider the specific economic effects of different types of sanctions. See Kirshner, “The Microfoundations of Economic Sanctions,” Security Studies 6 (spring 1997): 32-64. See also Kirshner, Currency and Coercion: The Political Economy of International Monetary Power (Princeton: Princeton University Press, 1995). 3. Similar models are offered by Robert Carbaugh and Darwin Wassink, “International Economic Sanctions and Economic Theory,” Revista Internazionale di Scienze Economiche e Commerciali 33 (1988): 217-25, and P. A. Black and H. Cooper, “On the Welfare and Employment Effects of Economic Sanc­ tions,” South African Journal of Economics 55 (March 1987): 1-15. Neither explores the process by which the economic impact of sanctions influences the domestic political behavior of the target country. 4. Because this is a back-to-back diagram, the slope of the export supply curve is reversed. 5. How far sanctions curtail trade depends both on the number of countries participating in sanctions and on how effectively they are enforced. Typically, not all countries will participate in a sanction. South Africa continued to trade with Rhodesia; many American and European countries (especially the Soviet Union) continued to trade with Cuba despite U.S.-led sanctions; even in the case of Iraq, Jordan provided a major conduit to world markets. Because most sanctions leak, the assumption that sanctions reduce trade to zero must be treated as a special case. 6. Again, the magnitude of these economic effects will depend upon the elas­ ticities of supply and demand in the sanctioned market. I have no a priori expecta­ tions about the slopes of these curves. 7. Forcing compliance would, of course, also eliminate the windfall costs of sanctions. 8. Even Hufbauer, Schott, and Elliott’s famous study concluded that sanc­ tions contributed to a successful outcome in slightly more than one-third of the cases they surveyed (Gary Clyde Hufbauer, Jeffrey J. Schott, and Kimberly Ann Elliott; Economic Sanctions Reconsidered, 2d rev. ed. [Washington, D.C.: Institute for International Economics, 1990] and 1st ed. [1985]). 9. Interestingly, raising the price of export goods to domestic consumers above the level Ps will cause some domestic consumers to fall out of the market. Thus, raising producer prices in this market will paradoxically increase the dead­ weight welfare costs of sanctions at the same time that it recovers some of the windfall losses suffered by domestic exporters.

188

Notes to Pages 23-28

10. The classic work on collective action is Mancur Olson, The Logic of Col­ lective Action: Public Goods and the Theory of Groups (Cambridge: Harvard Uni­ versity Press, 1973); see also Russell Hardin, Collective Action (Baltimore: Johns

Hopkins University Press, 1982). For a comprehensive analysis of the collective action problem, especially with regard to collective political dissent, see Mark Irv­ ing Lichbach, The Rebel’s Dilemma (Ann Arbor: University of Michigan Press, 1995). 11. Robert H. Bates, Essays on the Political Economy of Rural Africa (Berke­ ley: University of California Press, 1987), 124. The magnitude of this problem will vary according to industry structure. It will be highest where the export industry consists of numerous small firms dispersed broadly throughout the country and will decline as the economic and geographic concentration of the industry grows. It will disappear altogether when the export industry is a monopoly. 12. Bates, Essays, especially 61-91; also Robert H. Bates, States and Markets in Tropical Africa: The Political Basis of Agricultural Policies (Berkeley: University of California Press, 1981). 13. Where the government is incapable of providing such an institution, demand for government intervention is displaced by a demand for the racket. Thus, sanctions against Serbia led to the increasing penetration of the economy by organized crime. I thank Timothy Frye for leading me to this insight. 14. These incentives in seeking government intervention in the industry will be inversely related to the probability that sanctions will be lifted. When only a small likelihood of lifting sanctions exists, exporters must essentially choose between opposing the government and therefore suffering the full brunt of sanctions, or of currying favor with the government to enlist its cooperation in recouping the wind­ fall losses. Thus, by hardening its refusal to comply with the sanctions, the target government may not only improve its bargaining position in the external conflict with the sanctioning governments, but also shore up its domestic political position by forcing potential internal opponents into the government fold. 15. See Robert H. Bates, “Contra Contractarianism: Some Reflections on the New Institutionalism,” Politics and Society 16 (June 1988): 387-401; Hall and Tay­ lor, “Political Science and the Three New Institutionalisms”; Terry M. Moe, “Political Institutions: The Neglected Side of the Story,” Journal of Law, Econom­ ics, and Organization 6 (1990): 213-61 (special issue). 16. Hall and Taylor, “Political Science and the Three New Institutionalisms.” 17. Bates, Markets and States and Essays, 18. Lichbach, The Rebel's Dilemma, 43. 19. Public professions of loyalty to the government must always be carefully interpreted. This is a common ploy to avoid retribution while voicing opposition and is often intended to obscure rather than reveal an actor’s true preferences (James C. Scott, Domination and the Arts of Resistance: Hidden Transcripts [New Haven: Yale University Press, 1990]). 20. Sanctions also create a third group of foreign suppliers, those willing to contravene sanctions in return for a premium. Inclusion of this group does not change the fundamental points of my analysis but makes the presentation more difficult.

Notes to Pages 30-38

189

21. The one exception is where the import is an intermediate good, in which case these losses will fall upon a relatively concentrated group of producers. In this case, the political consequences would be analogous to those of sanctions against the target country’s exports. 22. The costs of sanctions to consumers will fall over time as consumers sub­ stitute away from the sanctioned good and as import-competing producers are able to expand production, thus easing shortages of this good. 23. This compromise becomes much more significant when the import in ques­ tion is an intermediate good. In this case, consumers are a concentrated producer group whose interest in lower prices directly contradicts the interests of a second concentrated producer group, import-competing producers. 24. Robert H. Bates, Open Economy Politics: The Political Economy of the World Coffee Trade (Princeton: Princeton University Press, 1997).

Chapter 3

1. At this time, Rhodesia’s official name was Southern Rhodesia. The deci­ sion to disband the Federation resulted from an inquiry known as the Monckton Commission that delivered its report in October 1960. The Commission concluded that racial hostility in the Federation was so great, especially between white-dom­ inated (Southern) Rhodesia and the northern territories of Northern Rhodesia and Nyasaland, that the Federation could not be maintained without the use of mas­ sive force or rapidly altering the political institutions of both the Federation and its member colonies to achieve some sort of political racial parity (Larry Bowman, Politics in Rhodesia: White Power in an African State [Cambridge: Harvard Uni­ versity Press, 1973], 28). 2. Bowman, White Power, 28. 3. David J. Murray, The Governmental System in Southern Rhodesia (Oxford: Clarendon, 1970), 14. 4. Murray, Governmental System, 6-7; also Frank Clements, Rhodesia: A Study of the Deterioration of a White Society (New York: Frederick A. Praeger, 1969), 108. 5. Emphasis in original. Quoted in Michael Charlton, The Last Colony in Africa: Diplomacy and the Independence of Rhodesia (Oxford: Basil Blackwell, 1990), 22. 6. The Central African Federation was composed of the British colonies of (Southern) Rhodesia, Northern Rhodesia (now Zambia), and Nyasaland (now Malawi) (quoted in Patrick O’Meara, Rhodesia: Racial Conflict or Coexistence [Ithaca: Cornell University Press, 1975], 7). 7. In 1956, out of 52,184 voters, only 560 were black. In 1957, the government estimated that the new franchise qualifications would add up to 8,000 blacks to the rolls (Colin Leys, European Politics in Southern Rhodesia [London: Oxford Uni­ versity Press, 1959], 196,232). 8. The Land Apportionment Act of 1930 was the cornerstone of Rhodesian land rights and racial law. It divided the colony’s land between Europeans and

190

Notes to Pages 38-42

Africans and prohibited each from acquiring land in areas assigned to the other. Although the act was designed in part to protect the interests of Africans by setting aside native reserves that would prohibit the encroachment of European settle­ ment, the division of land in terms of both acreage per capita and agricultural qual­ ity heavily favored whites. 9. Miles Hudson, Triumph or Tragedy? Rhodesia to Zimbabwe (London: Hamish Hamilton, n.d.), 37. The Quinton Commission unanimously recom­ mended abolition of the act despite the fact that two of its members were from the Dominion party, the precursor to the Rhodesian Front. 10. Clements, Rhodesia, 140. 11. A particularly prescient work in this regard is Leys, European Politics; see also Bowman, White Power, and Alan Cousins, “State, Ideology, and Power in Rhodesia, 1958-1972,” International Journal of African Historical Studies 24 (1991), esp. 55-56. 12. The vote was 41,949 in favor and 21,846 opposed. Barber argues that many voted for the 1961 constitution because they believed it was to become the basis for Rhodesian independence (James Barber, Rhodesia: The Road to Rebellion [New York: Oxford University Press, 1967], 79-81). Nonetheless, the central feature of the 1961 constitution was its mechanism for ensuring progressive black political participation in Rhodesia’s political life, indicating that many Rhodesians saw gradually increasing black participation in Rhodesian politics as a fair price to pay for independence. Clements downplays the role that a desire for independence played in the vote, arguing that it was primarily about black political advancement (Clements, Rhodesia, 149). 13. See especially Murray, Governmental System. 14. Originally named the United party, it became the United Federal party in 1953 with the creation of the Central African Federation. 15. Murray, Governmental System, 345-46. 16. Murray, Governmental System, 349. 17. Murray, Governmental System, 351. 18. Murray, Governmental System, 360. 19. See chapter 4. 20. Murray, Governmental System, 18. 21. Leys, European Politics, 103. The exception to this general trend was the tobacco growers who were strongly organized into the Rhodesian Tobacco Asso­ ciation (RTA) and comprised the colony’s strongest economic interest group. By the late 1950s, tobacco exports accounted for nearly one-third of Rhodesia’s for­ eign exchange earnings. See chapter 4. 22. Murray, Governmental System, 318. See also Annette Seegers, “Revolution in Africa: The Case of Zimbabwe (1965-1980),” Ph.D. dissertation, Loyola Uni­ versity, Chicago, 1983,191. 23. Murray, Governmental System, 323. 24. Seegers, “Revolution,” 192. 25. Seegers, “Revolution,” 195. 26. Grievances over the structure of rural property rights were a common fea-

Notes to Pages 43-46

191

ture of many nationalist movements. See Robert H. Bates, Essays in the Political Economy of Rural Africa (Berkeley: University of California Press, 1987), 98-100. 27. Clements, Rhodesia, 116. 28. Murray, Governmental System, 358. 29. Clements, Rhodesia, 132-33. 30. Murray, Governmental System, 361. 31. Seegers, “Revolution,” 194-95; Hudson, Triumph, 33-34. 32. Quoted in Clements, Rhodesia, 144. 33. Clements, Rhodesia, 159-60; Murray, Governmental System, 364. 34. Leys, European Politics, 196, 232; Murray, Governmental System, 363-64. 35. Claire Palley, The Constitutional History and Law of Southern Rhodesia, 1888-1965 (Oxford: Clarendon, 1966), 311. 36. A number of factors led to Todd’s downfall. His attempts to liberalize Rhodesia’s racial policies at a fairly fast pace generated tensions within both the party and the electorate at large. They also contradicted Welensky’s claims to Britain at the time that the rapid change of the Federation’s racial structure (of which Rhodesia was a member) was politically impossible. Finally, Todd exercised power in a brusque manner that earned more enemies than friends (Clements, Rhodesia, 128-30; Hudson, Triumph, 31-32). 37. Clements, Rhodesia, 131. 38. Murray, Governmental System, 363-64; Seegers, “Revolution,” 142-43; also Ian Hancock, White Liberals, Moderates and Radicals in Rhodesia, 1953-1980 (London: Croom Helm and New York: St. Martin’s, 1984). 39. For example, in a stump speech typical of the UFP’s policy statements, John Pittman, a successful candidate for the Marimba constituency, declared,

Other extremists are attempting the impossible task of keeping the Africans— who number nine-tenths of our population—in a permanent state of subjection to the remaining one tenth. It [the UFP] is unshakably determined to encourage, but not unduly hasten, the advance of all peoples by continually adjusting every aspect of our racial problems. For your sake and for your children’s sake, vote United Federal Party and ensure harmony, security and opportunity for all. (Quoted in Clements, Rhodesia, 144-45)

40. The stimulus for the Law and Order Maintenance Act was a wave of unrest that overtook the colony in July 1960 after the government forcefully broke up a mass demonstration in Salisbury. In quelling the protests, eleven blacks were killed. These were the first deaths attributable to domestic political violence in the colony since 1896 {Rhodesian Perspective, ed. Theodore Bull [London: Michael Joseph, 1967], 120). 41. Bowman, White Power, 51; also Clements, Rhodesia, 146-47; Seegers, “Revolution,” 197. 42. Clements, Rhodesia, 158; Bull, Rhodesian Perspective, 119. 43. Clements, Rhodesia, 138. 44. Although their participation had initially been opposed by Whitehead (Clements, Rhodesia, 147).

192

Notes to Pages 46-54

45. Clements, Rhodesia, 163; Bowman, White Power, 42. 46. Bowman, White Power, 34. 47. For example, Murray, Governmental System, 363-64; also Clements, Rhodesia, 147. 48. Each voter had a right to cast votes in both his constituency and his dis­ trict, but A-roll voters had more influence in the constituencies and B-roll voters in the districts. In constituencies, B-roll votes would be devalued so that they repre­ sented a maximum of 25 percent of votes cast there; likewise in districts, A-roll votes would be devalued so that they represented a maximum of 25 percent of votes cast. See, for example, Clements, Rhodesia, 278. 49. Clements, Rhodesia, 149. 50. Most of the white organizations contesting the 1961 constitution were right-wing Rhodesians who objected to its racial clauses as giving the country away to the nationalists. Ian Smith had resigned from the UFP to protest the racialist character of the constitution. Interestingly, however, these groups were also joined by liberals such as Garfield Todd and Sir Robert Tregold who felt that the constitution did not go far enough in advancing black political participation in Rhodesia. 51. Morris I. Hirsch, A Decade of Crisis: Ten Years of Rhodesian Front Rule (1963-1972) (Salisbury: Peter Dearlove, 1973), 13-14. 52. Murray, Governmental System, 362. 53. Rhodesian Front, Principles and Policies, 1962 (Salisbury, 1962), 2. 54. Clements, Rhodesia, 173-74. 55. Clements, Rhodesia, 176. 56. Clements, Rhodesia, 177. 57. Hirsch, Decade of Crisis, 15. 58. Rhodesian Front, Principles, 2. 59. Rhodesian Front, Principles, 5. 60. Bowman, White Power, 38-39. 61. Bowman, White Power, 50; Rhodesian Perspective, 121. 62. Bowman, White Power, 56. 63. Rhodesian Perspective, 119. 64. Clements, Rhodesia, 174. 65. Clements, Rhodesia, 162-63. 66. The lower estimate is by Theodore Bull, editor of the Central African Examiner, reported in Rhodesian Perspective, 121-24. The higher estimate is that of the UFP. See also Clements, Rhodesia, 162-63; Bowman, White Power, 42. 67. Nathan Shamuyarira, quoted in Clements, Rhodesia, 160. 68. One of the district (B-roll) seats went to Ahm Palley who ran as an inde­ pendent. 69. Bull, Rhodesian Perspective, 124. 70. Blake, History of Rhodesia, 343-44. 71. Bowman, White Power, 36. 72. Seegers, “Revolution,” 155-57; Bowman, White Power, 92-97. Although this structure did maintain a clear set of links between rank and file and the lead­ ership, the extent to which it enabled the rank and file to effectively control the

Notes to Pages 54-59

193

leadership is less clear. Power was concentrated in the hands of the party executive and the National Standing Committee. For example, members could stand for government office only if they were specifically approved by the party executive to do so. This would preclude the emergence of populist factions within the party to contest its leadership of the government. In addition, the majority of nongovern­ mental members in the executive was actually very small—fifty-five nongovern­ mental members to fifty governmental, and the quorum for the party executive and National Standing Committee was only one-third of the membership. See the Con­ stitution of the Rhodesian Front (Salisbury, n.d. [1962?]). 73. Seegers, “Revolution,” 163. 74. Murray, Governmental System, 366. 75. Bowman, White Power, 97. 76. Hirsch, Decade of Crisis, 33. 77. Murray, Governmental System, 365-66. 78. Clements, Rhodesia, 210; Hancock, White Liberals, 111. 79. Clements, Rhodesia, 206-7. 80. Hirsch, Decade of Crisis, 33-35. 81. Quoted in Bowman, White Power, 71-72. 82. Bowman, White Power, 71. 83. Welensky’s remarks to an American diplomat (U.S. Department of State, Incoming Telegram, American Consulate Salisbury, Control #2844, September 3, 1964). 84. Bowman, White Power, 71,74. Voting yes were 58,091 ; voting against were 6,096; with 944 spoiled ballots. 85. These five principles were codified in a letter to the Rhodesian government on September 21, 1965 (Robert Blake, A History of Rhodesia [London: Eyre Methuen, 1977], 376-77). 86. Clements, Rhodesia, 218. 87. Bowman, White Power, 76-82. 88. Bowman, White Power, 75-77. 89. Bowman, White Power, 83. The Rhodesian Front even managed to cap­ ture 2 of the B-roll seats while the remaining 3 went to independent candidates. Given that only 1,443 B-roll voters cast ballots, one should not read very much into this result. 90. See, for example, the quotes by Harkness Holdemess, a white liberal, and Ndabaningi Sithole, a black nationalist, in Stephen John Stedman’s Peacemaking in Civil War: International Mediation in Zimbabwe, 1974-1980 (Boulder: Lynne Rienner, 1988), 41^42. 91. Victor De Wal, The Politics of Reconciliation: Zimbabwe s First Decade (London: Hurst, 1990), 31. 92. In fact, the resolution of the conflict at Lancaster House in 1979 was itself a compromise forced on the African nationalists that entailed significant conces­ sions to whites, especially the private ownership of land. Many nationalists still consider their victory incomplete and claim that they were deceived into thinking the war had ground down to a stalemate when, in fact, they were on the brink of victory. Grievances over land ownership remain a powerful political force in Zim­

194

Notes to Pages 60-66

babwe, as evidenced by Mugabe’s encouragement of the recent occupation and seizure of white-owned farms by “veterans” of the Chimurenga war. 93. Quoted in Blake, History of Rhodesia, 368-69. 94. Quoted in James Barber, Road to Rebellion, 249. 95. Margaret Doxey, International Sanctions in Contemporary Perspective (New York: St. Martin’s, 1987), 39; and William Minter and Elizabeth Schmidt, “When Sanctions Worked: The Case of Rhodesia Reexamined,” African Affairs 87 (April 1988), 212. 96. Jack Howman, unpublished memoirs, 137-39.

Chapter 4

1. R. L. Cole and D. S. Pearson, “The Tobacco Industry in Central Africa, 1953-1963,” East African Economic Review 1 (December 1965), 59. 2. Larry Bowman, Politics in Rhodesia: White Power in an African State (Cambridge, Mass.: Harvard University Press, 1973), see especially 116; and Guy Arnold and Alan Baldwin, Rhodesia: Token Sanctions of Total Economic Warfare (London: Africa Bureau, 1972), 6. 3. See Bowman, White Power; William Minter and Elizabeth Schmidt, “When Sanctions Worked: The Case of Rhodesia Reexamined,” African Affairs 87 (April 1988): 230-31. 4. Bowman, White Power, 100. 5. This is a general theme of Bowman, White Power; see also Minter and Schmidt, “When Sanctions Worked,” and Johan Galtung, “On the Effects of Eco­ nomic Sanctions, with Examples from the Case of Rhodesia,” World Politics 19 (April 1967): 378^116. 6. Morris I. Hirsch, A Decade of Crisis: Ten Years of Rhodesian Front Rule (1963-1972) (Salisbury: Peter Dearlove, 1973), 13-14. 7. Tor Skalnes, The Politics of Economic Reform in Zimbabwe: Continuity and Change in Development (New York: St. Martin’s, 1995), 67. 8. Interview with John Strong, former vice president, Rhodesian National Farmers Union, Harare, February 1992. 9. The rand is a geological formation in South Africa that holds much of that country’s mineral wealth. A comprehensive history of the Rhodesian tobacco industry can be found in Trish Mbanga, Tobacco: A Century of Gold (Harare: ZIL Publications (Pvt) Ltd., 1991). See also Frank Clements and Edward Harben, Leaf of Gold: The Story of Rhodesian Tobacco (London: Methuen, 1962). 10. Colin Leys, European Politics in Southern Rhodesia (London: Oxford Uni­ versity Press, 1959), 5. 11. Hut taxes and pass laws were initially used to supply labor to the mines. These measures were intensified when the BSAC turned to promoting white agri­ culture (Leys, European Politics, 9-11). 12. What saved the industry from total collapse was intervention by the colony’s government. It bought the unsold stocks on behalf of the growers at a

Notes to Pages 66-69

195

total cost of over £500,000, at a time when the government’s total revenues amounted to only £2.5 million. This demonstrates the political importance attached to the tobacco industry even at this time (Clements and Harben, Leaf of Gold, 100-4; see also Mbanga, Century of Gold, 60-62). 13. Three types of tobacco were grown in Rhodesia. Virginia flue-cured was the popular (and profitable) crop. It was grown exclusively by white farmers and consistently comprised more than 95 percent of the total crop. Other types grown were Burley and Oriental (Turkish) tobacco. In 1965, Rhodesia produced 105,606 metric tons of flue-cured tobacco; 2,536 metric tons of Burley; and 690 metric tons of Oriental (U.S. Department of Agriculture, Foreign Agriculture Circular: Tobacco FT 10-80, December 1980, 5). 14. Cole and Pearson, “The Tobacco Industry,” 55-56. 15. On the London Agreement, see Mbanga, Century of Gold, 86-87; Clements and Harben, Leaf of Gold, 138-46; and Maurice Corina, Trust in Tobacco: The Anglo-American Struggle for Power (London: Michael Joseph, 1975), 177-89. 16. In 1953, the agreement was amended so that beginning in 1958, it would be renewed each year for the next three years ahead. 17. Interview with Ginger Freeman, former chairman, Tobacco Corporation, Harare, February 1992. 18. Tobacco exports in 1964-65 were above the existing trend due to produc­ tion increases and a strong export push in anticipation of UDI (Robert E. Haresnape, “Rhodesia’s Political Change May Alter Tobacco Trade,” Foreign Agricul­ ture 15 [April 25, 1977], 2). 19. Cole and Pearson, “The Tobacco Industry,” 60-61,67. 20. Cole and Pearson, “The Tobacco Industry,” 67-69. 21. See Mbanga, Century of Gold, 127-28. 22. The figure for growers includes some 300 growers in Zambia (Cole and Pearson, “The Tobacco Industry,” 62). Mbanga states that in 1964, some twentyfive companies were licensed to buy tobacco in Salisbury (Mbanga, Century of Gold, 135). 23. Mbanga, Century of Gold, 127-28. 24. Mbanga, Century of Gold, 127-28. 25. This sentiment did not extend to the markets for agricultural inputs, where state intervention created extensive agricultural subsidies. For example, the gov­ ernment set rail rates to agriculture’s advantage, while the country’s racial laws ensured a cheap supply of agricultural workers. See Paul Mosley, The Settler Economies: Studies in the Economic History of Kenya and Southern Rhodesia, 1900-1963 (Cambridge: Cambridge University Press, 1983), chapters 2 and 4. 26. Mbanga, Century of Gold, 128. The report overlooked the role of the gov­

ernment in subsidizing agriculture via the markets for agricultural inputs. 27. B. Vulindlela Mtshali, Rhodesia: Background to Conflict (New York: Hawthorn, 1967), 61. 28. Clements and Harben, Leaf of Gold, 155-57. 29. Clements and Harben, Leaf of Gold, 155-57. See also Leys, European Pol­ itics, 101.

196

Notes to Pages 69-72

30. The last two verses are printed here; “Whittinghead” refers to Edgar Whitehead, then finance minister of Southern Rhodesia. Quoted in Clements and Harben, Leaf of Gold, 154-55. 31. Clements and Harben, Leaf of Gold, 159. Leys argues, however, that the very fact that these squabbles became public in the 1950s signaled a shift in the bal­ ance of power away from agricultural interests. “Accustomed for years to exercise virtually unfettered political power on behalf of their interests through customary and discreet channels,” he writes, “they now have to compete with the industrial and commercial interests overtaking them” {European Politics, 103). 32. Clements and Harben, Leaf of Gold, 153. 33. Nathan M. Shamuyarira, Crisis in Rhodesia (London: Andre Deutsch, 1965), 87. 34. In practice, the marketing levy rarely reached 15 percent (Daniel Boda Ndlela, Dualism in the Rhodesian Economy, Lund Economic Studies 22 [Lund: University of Lund, 1981], 165). 35. White farmers also lowered the cost of labor by importing it from sur­ rounding countries (Mosley, Settler Economies, chap. 4). 36. As with all generalizations, there were exceptions. Some of the more estab­ lished farmers believed that some form of racial accommodation was necessary. As one British diplomat noted, the farming community “does in fact embrace many individuals who have a more enlightened outlook and live on better terms and with closer knowledge of the Africans than the Salisbury ‘parlour politicians’” (Hen­ nings, British High Commission to Faber, Foreign Office, November 4,1966, PRO FCO 36/246). 37. Bowman, White Power, 78. 38. Bowman writes of the RTA’s report among others that “the various inter­ est groups hoped to educate the government about the dangers of UDI, even though many of their members (and a number of the leaders) supported the idea” {White Power, 181 n. 63). 39. Mbanga, Century of Gold, 140. 40. Barber, Road to Rebellion, 249. 41. The bill did contain provisions to extend the legislation for one additional year, after which time it became automatically defunct. See the statement of the minister of agriculture, in Government of Rhodesia, Parliamentary Debates, 1966, vol. 63, col. 725. 42. Guardian, July 18,1966; Financial Times, July 18, 1966. 43. Although it is often asserted that the timing of the tobacco market deter­ mined the timing of the decision for UDI, the evidence is far from clear-cut. The government’s decision to declare independence in November was taken after grow­ ers had already planted the 1966 crop and incurred the debt necessary to finance it. Independence thus represented a substantial financial risk for growers because they were committed to producing a crop certain to be targeted by sanctions. 44. Mbanga, Century of Gold, 140. A 1967 CIA Intelligence Memorandum noted that much of the 1966 crop was bought and “being held in Rhodesian ware­ houses in the hope of a settlement. Since the leaf must be aged for at least 18 months before it can be used, the delay is causing no immediate problems” (U.S.

Notes to Pages 72-74

197

Directorate of Intelligence, Intelligence Memorandum: Rhodesia and Zambia— From Voluntary to Mandatory Sanctions [Washington, D.C.: Central Intelligence Agency, 1967], 7). 45. The last major peacetime use of economic sanctions had been by the League of Nations against Italy over its invasion of Ethiopia. The sanctions lasted barely six months and were widely regarded as a failure. 46. Personal interview, Harare, January 1992. 47. U.S. Department of Agriculture, Foreign Agriculture Circular: Tobacco FT 11-80 (December 1980) lists the 1966 crop as the second largest, while other sources list it as the third largest. See Mbanga, Century of Gold, 226-27. 48. Government of Rhodesia, Tobacco Corporation Act, 1966. 49. Peter Armstrong, Tobacco Spiced with Ginger: The Life of Ginger Freeman (Borrowdale, Zimbabwe: Welston, 1987), 112; Mbanga, Century of Gold, 136; Rhodesia Herald, December 30,1965; Government of Rhodesia, Report of the Sec­ retary for Agriculture for the period 1st October 1965 to 30th September 1966 (Sal­ isbury: Government Printer, 1966), 2. 50. The terms of reference for the Tobacco Corporation were:

1. Ensure that the maximum number of growers is kept on the land; 2. to see that orderly marketing is maintained and, with this end in view, to endeavor to maintain a free auctions system with modifications, if neces­ sary; 3. to enable growers to continue growing tobacco in 1966-67 and to safe­ guard the continuity of world markets; 4. to organize a pricing system based on the Tobacco Marketing Board sys­ tem with a minimum reserve price for all grades; 5. to establish a Pool for unsold tobacco; 6. to see that all funds from the sale of tobacco will be paid into the Pool and to arrange that growers receive the reserve price; 7. to ensure that growers are treated equitably as regards deliveries to floor, methods of sale and payment from the Pool on a grade-to-grade basis; 8. to raise funds to finance the pool and other aspects of marketing; 9. to arrange for the packing and processing of Pool tobacco, its storage, insurance, and fumigation; 10. to investigate possible outlets for any unsold Pool tobacco; 11. to keep all facets of the tobacco industry in a viable state. 51. The penalties for contravening the act were a fine of not more than £500 or two years in prison or both. 52. In 1966, the reserve price was set at 26d./lb. 53. Government of Rhodesia, Tobacco Corporation Act of 1966. See also the remarks of the minister of agriculture, Government of Rhodesia, Parliamentary Debates, 1966, vol. 66, cols. 725-29. 54. Government of Rhodesia, Tobacco Corporation Act of 1966. 55. Interestingly, most observers at the time vastly overestimated Rhodesia’s tobacco sales. The Financial Times (July 18, 1966) estimated that about half the crop had been sold. The Central Intelligence Agency was more ambitious, estimât-

198

Notes to Pages 74-77

ing that as much as 80 percent of the 1966 crop had been sold (Directorate of Intel­ ligence, Intelligence Memorandum, 7). 56. Guardian, March 30 and 31,1966; Financial Times, March 30,1966; Times, March 31, 1966. None of the tobacco officials I interviewed in Harare could remember specifically whether the buyers indeed colluded at the opening sales to force prices down. But all remarked that given the nature of the tobacco market, they would have been very surprised had this not been the case. 57. Armstrong, Tobacco Spiced, 117; and Mbanga, Century of Gold, 139. 58. Financial Times, July 14,1966. 59. These rumors were heavily played upon by the British. None of my inter­ viewees could confirm them. See Financial Times, September 7 and 23,1966. 60. Times, August 24, 1966; Financial Times, August 26,1966. 61. Times, September 11, 1966; Financial Times, September 11, 1966. This brought the average price for the season to 24'/4d./lb (Mbanga, Century of Gold, 142). In November, the government responded further by providing a £430,000 windfall to farmers in the form of government subsidies on diesel, fuel, and fertil­ izers. The subsidies were retroactive to April 1 and would last eleven months (Times, November 24, 1966). 62. U.S. Department of Agriculture, Foreign Agriculture Circular: Tobacco FT 11-80. I was unable to locate any official Rhodesian statistics on the size of the tobacco stockpile during sanctions. This was highly classified data, and most doc­ uments containing it were destroyed. However, several former tobacco officials told me that the statistics published in this (U.S.) series are accurate and that they had found it distressing at the time that someone had been passing this informa­ tion to the Americans. 63. Government of Rhodesia, Report of the Secretary for Agriculture, 2. 64. Financial Times, July 18 and 21, 1966. 65. Guardian, July 16,1966; Financial Times, July 18 and 21,1966. 66. The average annual harvest between 1959 and 1965 was 100,543 metric tons (U.S. Department of Agriculture, Foreign Agriculture Circular: Tobacco FT 11-80). 67. On export price data see Government of Rhodesia, Secret Supplement of Monthly Statistics (Salisbury: Government Printer, 1979), 16. 68. Government of Rhodesia, Report of the Secretary for Agriculture, 2. See also the remarks by the minister of agriculture, Government of Rhodesia, Parlia­ mentary Debates, 1966, Vol. 63, col. 728. 69. Financial Times, July 21, 1966. 70. By comparison, in the five years before sanctions, exports averaged slightly over 90,000 metric tons. 71. See Hennings, British High Commission, Salisbury to Clinton-Thomas, Commonwealth Office, April 25, 1967, PRO FCO 35/185; Hennings, British High Commission, Salisbury to Chithy, Commonwealth Office, January 21,1968, PRO 35/103; and Salisbury to Commonwealth Office, Tel. No. 428, April 23,1968, PRO FCO 35/102. 72. Times, June 15, 1967.

Notes to Pages 78-80

199

73. Hennings, British High Commission, Salisbury to Clinton-Thomas, Com­ monwealth Office, April 25, 1967, PRO FCO 35/185. 74. Financial Times, February 23 and December 28, 1967; Times, June 15, 1967. 75. Guardian, June 16,1967. 76. Hennings, British High Commission, Salisbury to Neale, Commonwealth Office, June 22,1967, PRO FCO 36/121. 77. Rhodesia Herald, March 24, 1968. 78. Times, March 26, 1968. 79. Guardian, March 8,1968. 80. Times, April 23, 1968; Financial Times, April 23 and May 2, 1968; Rand Daily Mail, May 15,1968. 81. Government of Rhodesia, Minister of Finance, Budget Statement 1970, July 16,1970. 82. The government initially set production quotas for the 1971-73 seasons at 45,000 metric tons at 28d./lb (“Rhodesian Roundup,” Financial Mail, June 16, 1970). The 1971 quota was subsequently raised to 55,000 metric tons. In Novem­ ber 1971, the government raised the 1972-73 quotas from 60,000 to 66,000 metric tons because of its settlement with Britain known as the Smith-Home agreement (Financial Times, April 18,1972). It thought sanctions would end shortly after the 1972 sales season opened. This settlement, however, was scuttled when the Pierce Commission inquiry found that it was overwhelmingly rejected by Rhodesia’s blacks. Because the Smith-Home agreement failed to fulfill Britain’s fifth principle that any settlement be acceptable to the population as a whole, sanctions were not lifted and British-Rhodesian relations continued along the same lines as before. 83. Mbanga, Century of Gold, 227. 84. Rhodesia Herald, January 29, 1973. 85. Financial Times, April 18, 1972; Skalnes, Economic Reform in Zimbabwe, 67. 86. Financial Times, April 18, 1972. 87. Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, November 4,1967, PRO FCO 36/246. 88. Scotsman, November 11,1971; Financial Mail, October 27 and November 24, 1972. See also Guy Arnold and Alan Baldwin, Rhodesia: Token Sanctions or Total Economic Warfare (London: Africa Bureau, 1972), 66, and the notes by Colin Legum contained in the Africa Bureau Papers, Box 262, file 3. 89. Rhodesia Herald, February 16,1973. 90. Record of a Talk Between the Commonwealth Secretary and Sir Nicholas Cayser in the Commonwealth Office at 10.45 am on Wednesday, March 22,1967, PRO FCO 35/7. 91. Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, January 21,1968; Faber, Commonwealth Office to Hennings, British High Commission, Salisbury, February 2,1968, PRO FCO 36/19. 92. Salisbury to Commonwealth Office, Tel. No. 703, July 10,1968, PRO FCO 36/66.

200

Notes to Pages 80-83

93. The Tiger proposals were from the near-settlement hammered out between Wilson and Smith aboard the HMS Tiger in December 1966. Hennings, British High Commission, Salisbury to Neale, Commonwealth Office, May 13,1967, PRO FCO 36/41. 94. Note of Meeting between Sir Cyril Hawker (Standard Bank) and Sir Mor­ ris James (Commonwealth Office) on Thursday, June 8,1968, PRO FCO 35/8. 95. Rhodesia Herald, April 6,1968. 96. Property and Finance, May (n.d.) 1968, clipping in PRO FCO 35/102. 97. Saving Telegram from Salisbury to Commonwealth Office, August 20, 1968, PRO FCO 36/21. 98. Gemini News Service, August 1968, clipping in PRO FCO 35/102. 99. Carter, British High Commission, Salisbury to Faber, Commonwealth Office, September 28,1968 PRO FCO 36/21. 100. Rand Daily Mail, December 5,1966. 101. The resolution stated that the congress “rejects the plan imposed on it by Government and urges Government to open negotiations with the Rhodesia Tobacco Association” {Rhodesia Herald, December 4,1969). 102. Rhodesia Herald, December 4 and 6, 1969. 103. Rhodesia Herald, December 5 and December 20,1969. 104. Rhodesia Herald, March 26, 1970. 105. Eileen Haddon, “Rhodesia’s Four Years of Sanctions: An Assessment,” Africa Contemporary Record (Exeter: Africa Research Ltd., 1970), A10. 106. Rhodesia Herald, April 16,1970. 107. Rhodesia Herald, December 6, 1969. 108. Rhodesia Herald, February 6, 1970. 109. Rhodesia Herald, February 6, 1970. 110. All information concerning the sale of tobacco was a strictly guarded state secret. Unknown to the growers at the time, the stockpile was still growing. 111. Rhodesia Herald, December 4, 1969. 112. Rhodesia Herald, December 4, 1969. 113. Rhodesia Herald, March 13, 1970. 114. Rhodesia Herald, April 4,1970. 115. Rhodesia Herald, April 8, 1970. 116. Rhodesia Herald, April 9,1970. 117. Bitterness over the government’s agricultural policies was fairly wide­ spread in the agricultural community. For example, John Burl, vice chairman of the Rhodesia Cattle Cooperative, stated in April 1970, “It has become increasingly clear to us, among the leaders of organized agriculture, that we have fought our­ selves to a standstill against a Government political policy that refused to accept the situation in agriculture as it really is” {Rhodesia Herald, April 9,1970). 118. Guardian, February 5,1970. The Republican Alliance was a far-right party that originated as an opposition group within the Rhodesian Front. It formed over concerns that Smith’s near settlement with Britain in the Tiger and Fearless talks indicated that he might yield to pressure for more rapid black political advance­ ment. It was soundly defeated in the 1970 general election (Hirsch, Decade of Cri­ sis, 46-47).

Notes to Pages 83-87

201

119. Rhodesia Herald, April 18, 1970. See also Rhodesia Herald, March 26, 1970. 120. Personal interview, Harare, February 1992. 121. This account is drawn from the documents in the file PRO FCO 36/13 (Sal­ isbury to Commonwealth Office, Tel. No. 2, January 3,1967, PRO FCO 36/13). 122. Salisbury to Commonwealth Office, Tel. No. 2, January 3,1967; Salisbury to Commonwealth Office, Tel. No. 129, January 25,1967, PRO FCO 36/13. 123. Personal letter from Frank Clements to Tim Mitchell, February 8, 1967, PRO FCO 36/13. 124. Salisbury to Commonwealth Office, Tel. No. 290, February 27,1967, PRO FCO 36/13. 125. Personal letter from Frank Clements to Tim Mitchell, February 8, 1967, PRO FCO 36/13. 126. Gemini News Service, GG 394 (n.d., February?) 1968, PRO FCO 36/20; Hennings, British High Commission, Salisbury to Clinton-Thomas, Common­ wealth Office, April 12,1968, PRO FCO 35/103. 127. Hennings, British High Commission, Salisbury to Clinton-Thomas, Com­ monwealth Office, April 12,1968, PRO FCO 35/103. 128. Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, February 9,1968, PRO FCO 36/19. 129. Salisbury to Commonwealth Office, Tel. No. 696, July 5,1968, PRO FCO 36/66. 130. Salisbury to Commonwealth Office, Tel. No. 699, July 8, 1968, PRO FCO 36/66; Bottomley to Farber, n.d. (July?) 1968, FCO 36/154. 131. Saving Telegram from Salisbury to Commonwealth Office, August 20, 1968, PRO FCO 36/21. 132. Interestingly, a third market strategy, smuggling to evade government con­ trol, was made impossible by the boycott. I thank Timothy Frye for this point. 133. Many of the growers responded to the re-entry of former growers in 1970 by threatening to overproduce, while a tobacco “strike” was used by the growers to back their demand that the government destroy the stockpile. See Haddon, “Rhodesia’s Four Years,” A10; Rhodesia Herald, December 5,1969. 134. Rhodesia Herald, December 5,1969. 135. Robert H. Bates, Markets and States in Tropical Africa: The Political Basis of Agricultural Policies (Berkeley: University of California Press, 1981). 136. Government of Rhodesia, Tobacco Corporation Amendment (No. 2) Act 1968. 137. Hennings, British High Commission, Salisbury to Clinton-Thomas, Com­ monwealth Office, February 18, 1968, PRO FCO 25/505; also Hennings, British High Commission, Salisbury to Clinton-Thomas, Commonwealth Office, Febru­ ary 24,1968, PRO FCO 35/103. 138. Rhodesia Herald, December 20, 1969. 139. It is interesting to note that the opposition Centre Party, which formed in 1968 and was headed by a Karoi tobacco grower, Pat Bashford, never sought to exploit agricultural grievances to mobilize support within the agricultural commu­ nity. Its primary platform was instead to promote multiracialism, a platform that

202

Notes to Pages 88-92

would not appeal to most white farmers. Unlike efforts such as Clements’s, which threatened to mobilize agriculture directly, the activities of electorally unpopular fringe parties were usually tolerated by the government because it bolstered the government’s own claim to represent the vast majority of white Rhodesians. See chapter 5. 140. Rhodesia Herald, April 6,1968. 141. Rhodesia Herald, April 9,1970. 142. Rhodesia Herald, June 25,1970. The RTA member who had challenged the ninister of agriculture “expressed his sneaking conviction that the resolution was pointed at him” and strongly opposed the resolution. 143. Rhodesia Herald, June 25,1970. 144. Even so, the independent candidates did erode RF support. In electoral constituencies where independent candidates challenged the RF, the RF’s average share of the vote fell from 90 percent in 1965 to 72 percent in 1970. Support for independent candidates ranged from 13 percent in Mazoe to 42 percent in Salis­ bury City. In the Marandellas constituency of the minister of agriculture, the inde­ pendent candidate, Tom Edridge, a tobacco grower from Wedza, won 27 percent of the vote; in Karoi, another tobacco-growing area, the independent candidate won 35 percent (Rhodesia Herald, April 11,1970). 145. Salisbury to Commonwealth Office, Tel. No. 1150, August 16,1967, PRO FCO 35/187. 146. Hennings, British High Commission, Salisbury to Neale, Commonwealth Office, June 22,1967, PRO FCO 36/121. 147. The quotation is from a letter by the RTA to the Rhodesian minister of agriculture, David Smith, cited in Rhodesia Herald, April 8,1970. 148. Rhodesia Herald, December 25, 1969. 149. Rhodesia Herald, May 20, 1970. 150. Rhodesia Herald, December 25,1969. 151. Rhodesia Herald, December 25,1969. Apparently under pressure from the minister of agriculture, the RTA established a commission to redress the imbal­ ance of representation within the association in late December 1969. In April 1970, the Greenfield Commission recommended consolidating the twenty-three districts into fifteen, as well as changing the rules by which growers would be represented at the annual congress. These recommendations reduced the discrepancies between districts in terms of the number of growers represented and were subsequently adopted by the RTA. The solution was not perfect. By 1973, Karoi growers were again complaining of poor prices and lack of representation in the RTA. 152. Government of Rhodesia, Parliamentary Debates, 1969, vol. 76, col. 1903. This statement is almost identical to his remarks concerning the tobacco quota scheme that regulated the re-entry of former growers. See Rhodesia Herald, Febru­ ary 6,1970. 153. Rhodesia Herald, April 8,1970. 154. Rhodesia Herald, April 16,1970. 155. Personal interview, Harare, February 1992. 156. Personal interview, Harare, February 1992. 157. Mbanga, Century of Gold, 155. Of course, the potential for significant

Notes to Pages 92-98

203

conflict between the growers and merchants had always existed as they occupied opposite sides of the market. This conflict was mitigated in the 1950s and early 1960s by the rising demand for Rhodesian leaf. Both growers and merchants pros­ pered from higher prices in the export market. However, once the market turned sour from sanctions, this potential conflict came out into the open. 158. Property and Finance, May (n.d.), 1968, clipping in PRO FCO 35/102. 159. Rhodesia Herald, January 16, 1970. 160. Rhodesia Herald, July 22,1970. 161. Rhodesia Herald, November 11,1972. 162. Government of Rhodesia, Secret Supplement, 16; U.S. Department of Agriculture, Foreign Agriculture Circular: Tobacco FT 10-80, and U.S. Depart­ ment of Agriculture, Foreign Agriculture Circular: Tobacco FT 11-80. 163. The RTA found the cost of growing tobacco rose 71 percent between 1974 and 1978 while producer prices increased less than 5 percent (Mbanga, Century of Gold, 172). 164. Guardian, June 22, 1972; Rhodesia Herald, June 22,1972. 165. Armstrong, Tobacco Spiced, 219. 166. Personal interview, Harare, February 1992. 167. John Strong in the Rhodesia Herald, February 26, 1970.

Chapter 5

1. In 1965, mining and basic metal industries contributed some 27 percent of Rhodesia’s exports by value (approximately $79.5 million) compared with the 32 percent contributed by tobacco (approximately $94 million). By 1969, mining con­ tributed 38 percent of exports (approximately $97 million), while tobacco’s share fell to just 7 percent (approximately $18 million) (Government of Rhodesia, Secret Supplement of Monthly Statistics [Salisbury: Government Printer, 1979], 26-27). 2. Johann Galtung, “On the Effects of International Economic Sanctions, with Examples from the Case of Rhodesia,” World Politics 19 (April 1967): 378-416. 3. William Minter and Elizabeth Schmidt, “When Sanctions Worked: The Case of Rhodesia Re-examined,” African Affairs 87 (April 1988): 207-37; David Tapuwa Hatendi, “The Political Impact of Foreign Capital (Multinational Corpo­ rations) in Rhodesia, 1965-1979,” Ph.D. dissertation, Oxford University (Bodleian), 1987; Larry Bowman, Politics in Rhodesia: White Power in an African State (Cambridge, Mass.: Harvard University Press, 1973). 4. A comprehensive account of the Rhodesian business community during the sanctions era is Ian Hancock’s White Liberals, Moderates and Radicals in Rhodesia, 1953-1980 (New York: St. Martin’s, 1984), especially chapters 9 and 10. Both Minter and Schmidt, “When Sanctions Worked,” and Hatendi, “The Politi­ cal Impact of Foreign Capital,” note the shifting stance of the business community toward the nationalists. 5. See Ian Hancock, White Liberals; also Hatendi, “The Political Impact of Foreign Capital.”

204

Notes to Pages 98-100

6. The domestic manufacturing sector spanned a range of industries from foodstuffs to heavy industrial concerns such as the Rhodesian Iron and Steel Cor­ poration (RISCO). 7. Colin Leys, European Politics in Southern Rhodesia (Oxford: Clarendon, 1959), 6; David Murray, The Governmental System of Southern Rhodesia (Oxford: Clarendon, 1970), 119. 8. J. G. Macdonald described railway rate policy in 1919 as being “primarily in the interests of concessionaires and largely at the expense of the people who were induced to come into the territory” (quoted in Paul Mosley, The Settler Economies: Studies in the Economic History of Kenya and Southern Rhodesia,

1900-1963 [Cambridge: Cambridge University Press, 1983], 242 n. 65). See also Ian Phimister, An Economic and Social History of Zimbabwe, 1890-1948 (London: Longman, 1988). 9. Relations between government and the mining industry were almost imme­ diately confrontational, with the mines opposing government efforts to aid farm­ ers through programs such as government-financed road building and maize con­ trol schemes (Murray, Governmental System, 126). 10. Jeffrey Herbst, State Politics in Zimbabwe (Berkeley: University of Cali­ fornia Press, 1990), 142-43. 11. Murray, Governmental System, 159; also Leys, European Politics, 105. 12. Murray, Governmental System, 159. 13. Leys, European Politics, 105. 14. Commerce’s absence from national politics, however, did not mean that commerce was apolitical; in fact, it was strongly organized into local chambers of commerce and dominated local politics in urban centers of Bulawayo and Salis­ bury (Murray, Governmental System, 164-65). Because commerce sought to maxi­ mize the volume of trade, it was opposed to any attempt to limit competition among producers (Mosley, Settler Economies, 11; Leys, European Politics, 105). 15. Murray, Governmental System, 190-91. 16. Murray, Governmental System, 190-91. 17. Murray, Governmental System, 189; Leys, European Politics, 106-7. 18. Leys, European Politics, 106. 19. Leys, European Politics, 105-6. 20. Phimister, An Economic and Social History, 239 21. For example, manufacturing contributed only 9.4 percent of Rhodesia’s national income in 1924 and had risen to just 13.2 percent by 1931 (Mosley, Settler Economies, 196; also Giovanni Arrighi, The Political Economy of Rhodesia [The Hague: Mouton, 1967], 21). 22. Arrighi, The Political Economy of Rhodesia, 45; Phimister, An Economic and Social History, 253-55; and Christine Sylvester, Zimbabwe: The Terrain of Contradictory Development (Boulder: Westview, 1991), 36-37. 23. Herbst, State Politics, 22. 24. Arrighi, The Political Economy of Rhodesia, 45; Phimister, An Economic and Social History, 253-55; and Sylvester, Zimbabwe, 36-37. 25. Murray, Governmental System, 181. 26. Murray, Governmental System, 187-88.

Notes to Pages 100-107

205

27. Leys, European Politics, 108. 28. Leys, European Politics, 105. 29. Murray, Governmental System, 192-97. 30. Sylvester, Zimbabwe, 37. 31. Mosley, Settler Economies, 214. 32. Herbst, State Politics, 24. 33. The hut tax was first imposed in 1896 and was raised in 1904 from 10s to £lper hut and 10s for each polygamous wife. At the time an African needed 1 to 3 months labor to earn £1 (Leys, European Politics, 10-11). 34. Quoted in Phimister, An Economic and Social History, 192. In 1932, some 400 of the 1,200 unemployed whites had been laid off by the railroads without effective resistance by the unions (Leys, European Politics, 115). 35. Leys, European Politics, 30-34; Martin Loney, Rhodesia: White Racism and Imperial Response (Harmondsworth: Penguin Books, 1975), 65. 36. Phimister, An Economic and Social History, 192. Phimister’s work is a Marxist history of Rhodesia in that it focuses on relations between the various eco­ nomic classes. Central to his account are relations between international capital, which is represented largely by the mines and later foreign companies that invested in Rhodesia’s industrial sector, and domestic capital, which consisted of settler agriculture, mining smallworkers, and local merchants. 37. Maintaining a large pool of low-cost agricultural workers was especially critical to tobacco farmers because tobacco cultivation is labor intensive. 38. Sylvester, Zimbabwe, 9. 39. Hancock, White Liberals, 28. 40. The governor of Southern Rhodesia speaking to the Associated Chambers of Commerce, March 10,1933 (quoted in Mosley, Settler Economies, 195). 41. Speaking in 1950. Quoted in Leys, European Politics, 272. 42. Quoted in Hancock, White Liberals, 88. 43. Leys, European Politics, 196,232. 44. Robert Blake, A History of Rhodesia (London: Eyre Methuen, 1977), 338. 45. Murray, Governmental System, 366. 46. See chapter 3, n. 83. 47. James Barber, Rhodesia: The Road to Rebellion (London: Oxford Univer­ sity Press, 1967), 272. 48. Association of Rhodesian Industries, “Economic Implications of a Unilat­ eral Declaration of Independence,” Memorandum submitted to the Rhodesian Government, January 12,1965,4. 49. Association of Rhodesian Industries, “Economic Implications,” 9. 50. Association of Rhodesian Industries, “Economic Implications,” 8. 51. Bowman, White Power, 181, n. 63. 52. For example, Herbst writes of the mining industry: “The 1965 Unilateral Declaration of Independence and the resulting sanctions must be seen as a major set-back for the mining industry. The mining sector was among the most exportoriented . . . and, therefore, had a great deal to lose from the sanctions that fol­ lowed UDI. The fact that, at the same time, mining companies in newly indepen­ dent Zambia were working out a modus vivendi with the Black government must

206

Notes to Pages 108-11

also have emphasized the potential cost of continued White minority rule. Clearly, mining companies would have preferred the moderate Black option to the unknown, and highly dangerous, business environment induced by sanctions” (Herbst, State Politics, 144-45). 53. From a secret memorandum to the British government that is attributed to Evan Campbell. Secretary of State, Rhodesia: Peace Overtures, Commonwealth Relations Office, December 21,1965, PRO PREM 13/548. 54. Note for the Record, Meeting with Sir Geoffrey Gibbs, brother of the Gov­ ernor of Rhodesia and the Prime Minister, November 24,1965, PRO PREM 13/547. 55. Note of a Meeting Between the Minister of State and Sir Douglas Marshall at the CRO, December 9,1965, PRO PREM 13/548. 56. Letter For Gamer From Fingland, November 18, 1965, file JR1051/28/G, PRO FO 371/182037. 57. Financial Mail, November 19, 1965. 58. Personal interview, Harare, January 1992. 59. By June, the Rhodesian Motor Trade Association had found that new car sales were down more than 40 percent and commercial vehicle sales were off by 50 percent. Motor trade accounted for approximately one-third of Rhodesia’s dis­ tributive economy (Guardian, June 18,1966). 60. Financial Times, April 29, 1966. 61. Government of Rhodesia, Secret Supplement, 32-33. 62. Financial Times, June 9, 1966. 63. Financial Times, June 9,1966. 64. Financial Times, June 9,1966. 65. Financial Times, June 21,1966; Times, June 20,1966. 66. Guardian, December 12,1966; Guardian, December 15,1966. 67. Times, January 10, 1967. 68. Hennings, British High Commission, Salisbury to Neale, Commonwealth Office, May 13,1967; Hennings, British High Commission, Salisbury to MacKilligin, July 4, 1967, PRO FCO 36/41. 69. Blake, History of Rhodesia, 117-19; Rhodesian Outlook 1 (April 1969): 9; Guardian and Times, December 22, 1967. 70. Times, January 5, 1968. 71. Economist, June 8, 1968. 72. In fact, the government was itself aware that failure to settle meant that Rhodesia would be committing itself to a long-term struggle to overcome sanc­ tions. See Jack Howman, unpublished memoirs, 1977,137-39. 73. Times, December 10,1968. 74. Newson’s charges represented a dramatic turnaround in thinking. In 1966, he had written, “It is our bounden duty to support the Government of the day and strain every effort to beat or at least minimize the effect of sanctions” (Guardian, November 28,1968). 75. Secretary of State, Rhodesia: Peace Overtures, Commonwealth Relations Office, 21 December 1965. See also Note of a Meeting Between the Minister of State and Sir Douglas Marshall at the CRO, December 9,1965, PRO PREM 13/548.

Notes to Pages 111-14

207

76. The words are Neville Bertram’s, who spoke with some bitterness about Campbell’s wide-ranging efforts. Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, January 11,1968, PRO FCO 36/41. 77. Hancock, White Liberals, 122. 78. In April 1966, the minister of commerce and industry appealed to the busi­ ness community to help the government defeat sanctions. Speaking of the motor industry, for example, he argued that it was vital to maintain the employment of skilled and semiskilled workers. “I have in mind,” the minister said, “particularly our skilled and semi-skilled motor mechanics whom the country cannot afford to lose.” Likewise, to the Bulawayo Chamber of Commerce, the minister also pleaded for greater cooperation between commerce and agriculture. “Commerce in this country,” he said, “has traditionally been a major supplier of credit to the farming industry.... I would like to suggest to this section of commerce that it is in their own interests for all of them [farmers] to keep going” (Guardian, April 19, 1966; Financial Times, April 19, 1966). 79. Carter, British High Commission, Salisbury to Faber, Commonwealth Office, London, September 3,1968, PRO FCO 36/21. 80. Guardian, November 2,1968. See also chapter 4. 81. Gemini News Service, GG 394, n.d. (February?), 1968. 82. Hancock, White Liberals, 122. 83. Personal interview, Harare, January 1992. 84. Financial Times, December 16,1968. 85. Hancock, White Liberals, 120-22. 86. Personal interview, Harare, January 1992. 87. Financial Times, December 7, 1965; Rhodesia Herald, December 8, 1965; Africa Research Limited, Rhodesian Crisis (Exeter: William Chudley and Son Ltd., 1966), 16. In 1966, the act was strengthened to allow the minister of commerce and industry to compel the company to “submit to him in such a manner as he may specify any information relating to the conduct of business . . . that he may con­ sider necessary for determining whether or not the corporation should be desig­ nated (taken over)” (A. G. Mezerik, ed., “Rhodesia and the United Nations,” International Review Service: Analysis and Review ofInternational Problems 12, no. 89 [1966]: 72-73). 88. Guardian, December 3, 1965. 89. Financial Times, January 24,1966. 90. Government of Rhodesia, “Report of the Committee on Incomes Policy,” April 1978, 28. Financial Times, January 20,21, and 24,1966. 91. 92. Mezerik, “Rhodesia and the United Nations,” 71. 93. David Weld, “Manufacturing Industry,” chap. 8 in Zimbabwes Inheri­ tance, ed. Colin Stoneman (New York: St. Martin’s, 1981), 185. 94. In February 1966, for example, Ian Birt Dillon, the deputy minister of mines and lands in 1966, defended the government’s decision not to give itself even more sweeping powers to expropriate unworked mining claims by arguing that:

208

Notes to Pages 114-17

I do not think if we tighten up this clause on expropriation that it would do us any good. We are seeking investment in this country from outside. We are trying to encourage investment in our mining industry from within and if it were known that we intended to expropriate a mining location that was not brought in, I believe it would do us more harm than good. (Government of Rhodesia, Parliamentary Debates, 1966, vol. 63, col. 529)

95. Personal interview, Harare, January 1992. 96. Hatendi, “The Political Impact of Foreign Capital,” 104. 97. Salisbury to Commonwealth Office, Tel. No. 129, January 25,1967, PRO FCO 36/13. 98. Hennings, British High Commission, Salisbury, to Neale, Commonwealth Office, May 13,1967, PRO FCO 36/41. 99. Hennings, British High Commission, Salisbury, to Clinton-Thomas, Com­ monwealth Office, February 3,1968, PRO FCO 35/11. 100. The following is drawn from Government of Rhodesia, “Report of the Commission of Inquiry into Import Control, 1975,” Presented to the President of Rhodesia, May 2,1975,4-7. 101. Government of Rhodesia, “Import Control,” 7. 102. Government of Rhodesia, “Import Control,” 10-11. 103. Some inessential luxury items were imported into Rhodesia under NCI (no-currency-involved) deals. These deals were either barter trade in which the Rhodesia merchant exchanged Rhodesian goods directly for foreign goods (in the case of capital goods imports, equity in Rhodesian firms was often traded for the good) or trade in which a merchant could buy foreign exchange held in an offshore account by paying the owner (who was either traveling to or resided in Rhodesia) in Rhodesian currency. The merchant then used that money to buy goods that he imported into the country. These deals proved especially lucrative for merchants of luxury goods, who often received prices inside Rhodesia that were two to three times higher than prices in the country of origin. Opportunities for profiteering using NCI deals were rife, so the Central Bank discontinued them after 1975 (Harry R. Strack, Sanctions: The Case of Rhodesia [Syracuse: Syracuse University Press, 1978], 106-7). 104. Government of Rhodesia, “Import Control,” 14. 105. Carter, British High Commission, Salisbury, to Clinton-Thomas, Com­ monwealth Office, June 21, 1968, PRO FCO 35/144. 106. Personal interview, Harare, January 1992. 107. Personal interview, Harare, January 1992. 108. “We all know,” stated Goldwasser, “that this has been done to see the best possible use is made of scarce foreign currency in the national interest. But I am not sure that this [government] control has in fact achieved this objective” {Rhode­ sia Herald, March 24,1971). 109. Personal interview, Harare, January 1992. 110. Hennings, British High Commission, Salisbury to Clinton-Thomas, Com­ monwealth Office, February 21,1967, PRO FCO 35/7.

Notes to Pages 118-22

209

111. Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, November 4,1967, PRO FCO 36/246. 112. Personal interview, Harare, February 1992. 113. Financial Times, March 1,1972. 114. Government of Rhodesia, “Import Control,” 4. 115. Government of Rhodesia, “Import Control,” 18; Strack, Sanctions, citing the Financial Mail, April 30, 1971. 116. Government of Rhodesia, “Import Control,” 18. 117. Personal interview, London, June 1991. 118. Personal interview, Harare, January 1992. 119. Government of Rhodesia, “Import Control,” 19. 120. Personal interview, Harare, January 1992. 121. Hatendi, “The Political Impact of Foreign Capital,” 191-92. 122. Financial Times, October 24,1968. 123. Government of Rhodesia, “Import Control,” 18. 124. Rhodesia Herald, July 29,1972. 125. Personal interview, Harare, January 1992. 126. The U.S. State Department and British government suspected that the U.S. firms connived in the “forced” sale of minerals to Univex as a way to plead force majeure and thus evade prosecution under U.S. sanctions regulations. Inter­ estingly, Foote later feared that the Rhodesian government would rescind its order, forcing it either to face prosecution or shut down operation of its mine, which would fill with water (Owen, British Embassy, Washington, D.C., to Brind, Foreign Office, June 21, 1968, PRO FCO 35/220). A former Rhodesian mining official likewise alleged that the takeover of the U.S. companies’ mines had been intended to protect the companies from U.S. prosecution (personal interview, Harare, January 1992). 127. According to one official, Univex’s pricing strategy was to shadow prices in the South African market in order to avoid drawing attention to the Rhodesian origin of the minerals. Univex’s prices were based on prices set by contracts let in the South African market, with allowances for shipping and quality differences (personal interview, Harare, January 1992). 128. Personal interview, Harare, January 1992. 129. Personal interview, Harare, January 1992. 130. Quoted in Herbst, State Politics, 147. 131. Campbell nonetheless turned up at some Forum meetings incognito! (Hen­ nings, British High Commission, Salisbury, to Neale, Commonwealth Office, May 13,1967, PRO FCO 36/41). 132. Financial Times, October 18,1968. 133. These were reproduced in a circular letter issued by the Forum, October 16, 1967, PRO FCO 36/41. 134. The Forum, Notes on Interview with Prime Minister, Held on 9th May, 1968, at 11.00am, PRO FCO 36/41. 135. Salisbury to Commonwealth Office, Tel. No. 513, May 14, 1968, PRO FCO 36/41.

210

Notes to Pages 123-26

136. Commonwealth Office to Salisbury, Tel. No. 855, July 24,1968, PRO FCO 36/42. 137. Hennings, British High Commission, Salisbury to Neale, Commonwealth Office, August 2,1967, PRO FCO 36/41. 138. Carter, British High Commission, Salisbury to Faber, Commonwealth Office, August 9,1968, PRO FCO 36/42. 139. Times, January 8, 1968; Guardian, January 12, 1968. 140. Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, January 11, 1968; and Hennings, British High Commission, Salisbury to Faber, Commonwealth Office, January 13,1968, PRO FCO 36/41. 141. Bottomley, Commonwealth Office, to Carter, British High Commission, Salisbury, September 13, 1968, PRO FCO 36/70. 142. Personal interview, Harare, January 1992. 143. Government of Rhodesia, Secret Supplement, 9. 144. Government of Rhodesia, Secret Supplement, 28. 145. Strack, Sanctions, 92-93. 146. Government of Rhodesia, Secret Supplement, 17,21. 147. Government of Rhodesia, Secret Supplement, 26, 30. 148. Financial Times, November 13, 1967. 149. Government of Rhodesia, Secret Supplement, 21. 150. Personal interview, Harare, January 1992. 151. Personal interview, Harare, February 1992. 152. Strack, Sanctions, 92. 153. This statement is true until 1977 when the U.S. Congress repealed the Byrd amendment and the Carter administration issued tough enforcement guidelines of the sanctions orders. It threatened to exclude from the U.S. market any foreign company that imported into the United States minerals of Rhodesian origin. Rhodesian ferrochrome was of a uniquely high quality whose origin could be determined by a simple assay test. Since few merchants wished to risk being shut out of the U.S. market simply for the sake of trading in Rhodesian ferrochrome, exports of this mineral dried up overnight (Elizabeth S. Schmidt, “United Nations Sanctions and South Africa: Lessons From the Case of Southern Rhodesia,” Notes and Documents, United Nations Centre against Apartheid [New York: United Nations, 1987]). 154. Personal interview, London, June 1991. 155. It is interesting to note that most analyses of Rhodesian sanctions overlook the fact that Rhodesian merchants could reap substantial benefits from sanctions by mediating across markets. Rather, attention is drawn to rapacious South African middlemen who charged exorbitant markups to a captive Rhodesian mar­ ket. Apparently, Rhodesian merchants were thought too patriotic to capture any of these “rents” for themselves. 156. Strack, Sanctions, 90. 157. Strack, Sanctions, 90. 158. Times, October 9, 1970. 159. Government of Rhodesia, Ministry of Finance, Economic Survey of Rhodesia, 1975 (Salisbury: Government Printer, 1976), 12.

Notes to Pages 126-34

211

160. This practice prompted Clifford DuPont, the president of Rhodesia, to remark: “There is no justification for this. Although it may benefit the individual it is not in the country’s interest” {Rhodesia Herald, July 29,1972). 161. Rhodesia Herald, May 4,1970. 162. Rhodesia Herald, May 19,1972. 163. Strack, Sanctions, 90. 164. Financial Times, March 1, 1972. 165. Sunday Times, November 12,1972. 166. Rhodesia Herald, July 12,1971. 167. Personal interview, Harare, February 1992. 168. Financial Mail, “Rhodesian Round Up,” June 28,1968. 169. Rhodesia Herald, November 1, 1969. 170. Quoted in John Handford, Portrait of an Economy: Rhodesia under Sanc­ tions (Salisbury: Mercury, n.d. [1977?]), 140,130. 171. Africa Bureau, “Sanctions against Rhodesia 1965 to 1972” (mimeo), Lon­ don, 1972, 34. 172. Quoted in Guy Arnold and Alan Baldwin, Rhodesia: Token Sanctions or Total Economic Warfare (London: Africa Bureau, 1972), 3. 173. See, for example, Hatendi, “The Political Impact of Foreign Capital,” 249-51. 174. Hancock, White Liberals, chaps. 9, 10.

Chapter 6

1. Total was a French oil company. Caltex was a joint venture between two U.S. companies, Standard Oil and Texaco. Besides Britain, the United States tried hardest to make sanctions effective. A glaring exception to this general rule was the Byrd amendment, which enabled the United States to import Rhodesian minerals, especially chrome, between 1969 and 1977. 2. Quoted in Africa Bureau, “Time for Change: An Analysis of Why Rhode­ sia’s Regime Survives and How Present Pressures Can Be Increased to End Its Tenure” (mimeo), London, 1974,10. In reality, determining the source of Rhode­ sia’s bootleg oil was not easy. Throughout 1967, Britain suspected a refinery in Mozambique and the French company Total were the primary sources, although it also had gnawing suspicions that Shell and BP were involved. Not until early 1968 did the British companies admit to the government that their oil too had reached Rhodesia. See especially the Ministry of Power documents in PRO POWE 63/226 through PRO 63/228. The role that British oil companies played in contin­ uing to supply Rhodesia became a major political scandal in Britain in the late 1970s and was the subject of an intensive government inquiry. The inquiry’s report is by T. H. Bingham and S. M. Gray, Foreign and Commonwealth Office, Report on the Supply of Petroleum and Petroleum Products to Rhodesia (London: Her Majesty’s Stationery Office, 1978). This report (hereafter “Bingham report”) is an unrivaled source. It is not only exhaustive, it also reproduces the major internal oil company documents on which its conclusions were based.

212

Notes to Pages 134-35

3. For example, see Sunday Times, August 27,1967; also U.S. Directorate of Intelligence, Intelligence Memorandum: Rhodesia and Zambia—From Voluntary to Mandatory Sanctions, Central Intelligence Agency, February 1967, 5. 4. Lubricants were still imported directly into the Rhodesian market by the local subsidiaries. 5. Both South Africa and Britain possessed strong incentives to keep the threat of countersanctions private. By making its threat public, South Africa would only intensify pressures in the United Nations and elsewhere to take fur­ ther action against it. For Britain, public knowledge that it was responsive to South African threats would have seriously damaged British interests in black Africa and the Commonwealth. Britain therefore sought to quash any suspicions that its policies were being shaped by an explicit South African threat of coun­ tersanctions. In 1967, for example, Zambia’s president Kenneth Kuanda queried the British government directly about a rumor that the Security Council resolu­ tion that authorized the blockade of the port of Beira did not also include a blockade of Lourenco Marques because Britain had “yielded to a South African threat to take severe economic steps against the United Kingdom if Lourenco Marques were included in the proposed blockade.” The query rattled Britain. The first draft of Britain’s reply simply evaded the issue of a South African threat. It stated that “There was no question of the inclusion of Lourenco Mar­ ques since discussion in the security council was entirely within the context of the arrival of the Joanna V at Beira and the approach of another tanker with sub­ stantial quantities of crude oil for pumping through the pipeline to Rhodesia.” This draft reply was ultimately unsatisfactory because it left open the possibility that a South African threat had shaped British behavior. The final draft of Britain’s reply flatly denied that a South African threat of countersanctions had influenced British policy. It stated: “There was no question of the inclusion of Lourenco Marques, and certainly no question of our yielding to any quote South African threat unquote over it.” In commenting on the evasiveness of the first draft, however, W. R. McQuillen noted that “the draft reply was deliberately evasive in order to avoid being drawn into a dialogue with President Kuanda on the reason for our reluctance to see an extension of the blockade to Lourenco Marques. Although his allegation that we were motivated by the threat of South African retaliation is an oversimplification, he is of course very near the truth.” See Lusaka to Commonwealth Office, Tel. No. 1679, May 22,1967, PRO POWE 63/226; W. R. McQuillan to Mr. Bottomley, June 2, 1967; and Commonwealth Office to Lusaka, Tel. No. 1562, June 2, 1967, PRO FCO 35/201. It is also inter­ esting to note that although the Bingham report acknowledges that British eco­ nomic interests in South Africa served as a constraint on British policy, it makes no mention of South Africa’s explicit threat to retaliate against those interests should its oil trade be interrupted. 6. Of Rhodesia’s energy, 63 percent was from coal, which was also an impor­ tant Rhodesian export. The remaining 10 percent of energy requirements came from hydroelectricity (W. J. Levy, Inc., The Economics and Logistics of an Embargo on Oil and Petroleum Products for Rhodesia, A Report Prepared for the United Nations Office of the Attorney General [New York: United Nations, 1966],

Notes to Pages 135-38

213

2). In fact, Rhodesia’s limited dependence on oil-based energy sources led the report to conclude (29) that “on a siege basis, Rhodesia could probably make do to mid-year and even beyond . . . but if the decision were one of survival, the avail­ ability of oil, in itself, would apparently not be the decisive consideration.” 7. W. J. Levy, Inc., Economics and Logistics, 3. 8. “Southern Rhodesia: Action in the Event of a U.D.I.: Oil,” MISC.84/15, October 22,1965,2, PRO CAB 130/245. 9. Martin Bailey, Oilgate: The Sanctions Scandal (London: Hodder Stoughton, 1979), 55. 10. Bingham report, 2. 11. “Southern Rhodesia: Action in the Event of a U.D.I.: Oil,” 2. See also Bai­ ley, Oilgate, 132. 12. “Southern Rhodesia: Action in the Event of a U.D.I: Oil,” 2. 13. British Petroleum, “Investigation,” 34-35. 14. See, for example, U.S. National Security Council, “Study in Response to National Security Study Memorandum 39: Southern Africa,” December 9, 1969, 45-46. 15. “Rhodesia: Oil Sanctions,” Note by the Secretaries, MISC.100/D/11, November 25,1965, PRO CAB 130/256. 16. “Rhodesia: Oil Sanctions,” Note by the Chairman, MISC. 100/D, Novem­ ber 26,1965, PRO CAB 130/254. 17. “Minutes on Economic Sanctions,” by the Minister of State (Roger Allen), December 31, 1965 and Addendum dated November 16, 1965, PRO FO 371/182045. Also, “Oil Sanctions against Rhodesia,” Note by the Foreign Office, December 7,1965, PRO CAB 130/257. 18. “Rhodesia: Oil Sanctions,” Note by the Secretaries, MISC.100/D/2, November 22,1965, PRO CAB 130/256. 19. See, for example, “Rhodesia: Oil Sanctions,” A Note by the Chairman of MISC. 100/D, November 26,1965. 20. Cable from Mr. P. M. Jameison, General Manager Shell Rhodesia, to Mr. de Bruyne, Shell Regional Coordinator for Southern Africa, September 29,1965, quoted in Bingham report, 36. See also “Rhodesia: Oil Sanctions,” A Note by the Chairman of MISC.100/D, November 26, 1965. CAPREF stands for the Central African Petroleum Refinery company, the company that owned the Feruka refinery. CAPREF was itself a joint venture between the five international oil com­ panies serving the Rhodesian market, American Independent Oil company, and the Kuwait national petroleum company (Commonwealth Secretariat, Oil Sanc­ tions against Rhodesia [London: Commonwealth Secretariat, 1979], 8). 21. A secret study of oil supplies to Rhodesia and Zambia by Louis Walker, managing director of Shell, South Africa lists six possible routes by which Zambia could be supplied with oil products. All were circuitous and extremely expensive (L. C. V. Walker, “Oil for Rhodesia and Zambia,” internal Shell company docu­ ment, December 29, 1965, reprinted in Bingham report, Annex II, 227-32). Once sanctions were imposed, Britain, the United States, and Canada supplied Zambia’s oil requirements by airlifting and trucking drummed supplies in from Tanzania. This operation lasted until August 1968 when a pipeline linking Zambia to Tanza-

214

Notes to Pages 138-39

nia was completed (Arthur J. Klinghoffer, Oiling the Wheels of Apartheid: Expos­ ing South Africa's Secret Oil Trade [Boulder: Lynne Rienner, 1989], 82). 22. See U.S. Department of State, “Outline of Rhodesian Problem,” Decem­ ber 1, 1965, 3; also “Note by the Commonwealth Relations Office,” Defence and Oversea Policy (Official) Committee, Subcommittee on Southern Rhodesia, O.P.D. (O) (S.R.) (65) 18, June 2,1965,4-5, PRO CAB 148/67. 23. “Submission to Ministers on Possible Action by the United Kingdom Gov­ ernment in the Event of a Unilateral Declaration of Independence by Rhodesia,” Defence and Oversea Policy (Official) Committee, Subcommittee on Southern Rhodesia, Annex 4, PRO CAB 148/67. 24. “Note by the Commonwealth Relations Office,” Defence and Oversea Pol­ icy (Official) Committee, Subcommittee on Southern Rhodesia, June 2,1965,4-5. 25. A cable from the State Department to the American Embassy London states “We are frankly dubious that the present UK program will produce a quick kill. ... We therefore think it would be wrong and dangerous in planning to assume efforts which would trigger the suspension of copper exports, since that suspension might prove to be long lasting. ... the UK should not take measures which would induce Rhodesia to act against Zambia” (Department of State, “Out­ going Telegram to American Embassy London,” December 4,1965,4). The fear of Rhodesian retaliation against Zambia was not unfounded. One high-level busi­ nessman interviewed in January 1992 in Harare told me that the Smith government approached the Anglo-American company early in the crisis and asked it to “destroy” the Zambian economy. Anglo-American, which provided the bulk of Zambia’s coal requirements, politely declined. 26. Brief for Ministers of State, For MISC.100/B Meeting, November 29, 1965, PRO FO 371/182043. See also “Rhodesia: American Attitude,” file JR 113134/2, West and Central African Department, December 1, 1965, PRO FO 371/182046. 27. See, for example, Minutes of the Rhodesia Sub-Committee for Further Economic Measures, MISC 100/G/lst Meeting, November 23, 1965, PRO CAB 130/258. 28. “Oil Sanctions against Rhodesia,” Note by the Foreign Office, December 7,1965. The danger inherent in establishing the precedent that oil-producing coun­ tries could determine the direction of exports was so high that Britain consistently rejected using these countries as the first line of the embargo. Of course, British fears about the dangers of interfering with the oil trade were borne out in the oil shocks of the 1970s. 29. Letter from George Brown to the Prime Minister, November 12, 1965, PRO PREM 13/564. See also “Action in the Event of a U.D.I.: Oil.” 30. See “Oil and Rhodesia” in file IOD 2241/1 and the minutes by D. M. March in file IOD 2241/1A, both in PRO FO 371/181592. Likewise, on November 12, George Brown wrote Prime Minister Wilson asking whether it would “not be wise to have another look at this [the decision not to impose an embargo] so that we can give some further guidance to the Foreign Secretary before we are finally committed” (Letter from George Brown to the Prime Minister, November 12, 1965).

Notes to Pages 139-41

215

31. In fact, Britain’s most damaging sanction, the boycott of Rhodesian tobacco, which accounted for nearly one-third of Rhodesia’s foreign exchange earnings, would not even begin to take effect until March 1966 when the current tobacco crop came to market. See chapter 4. 32. Letter from Jomo Kenyatta, President of Kenya to Harold Wilson, Prime Minister of the United Kingdom, November 19,1965, PRO PREM 13/546. 33. Klinghoffer, Oiling the Wheels, 80. 34. Bailey, Oilgate, 122-23. 35. See, for example, Foreign Office, Brief for talks with Mr. Mann of the United States Government, November 29, 1965, PRO FO 371/182039. 36. U.S. Department of State, “Memorandum For the President on the Rhodesian Crisis,” December 22, 1965. 37. Foreign Office, Brief for talks with Mr. Mann of the United States Gov­ ernment. 38. Foreign Office, Brief for talks with Mr. Mann of the United States Gov­ ernment. This document also states that Britain wanted to impose an oil embargo in order to achieve a “quick kill” and thus end the rebellion by creating a “revul­ sion of feeling in Rhodesia against the Smith regime which would enable the liberal White elements to take over.” This statement, which suggests that the primary goal of the embargo was to quickly end the rebellion, must be carefully interpreted. The purpose of this document was to lay out the arguments that Britain would use to persuade the United States to cooperate in imposing an embargo; it is the only doc­ ument I have located that suggests an embargo would actually produce Rhodesian capitulation. In fact, an accompanying document makes clear that there was no evidence that an embargo would do so (“Note to Minister of State,” by Roger Allen, November 29,1965, file JR 1071/6, PRO FO 371/182039). As I argue below, both Britain and the United States were highly skeptical that an embargo would end the rebellion and implemented the embargo largely for other reasons. 39. “Assessment of the Present Positions and Proposals for Further Action,” Note by the Chairman of MISC.100/G, MISC.100/B/15, December 11,1965, PRO CAB 130/254. 40. “Anglo-American Consultations on Oil Sanctions,” Note by the Chairman of MISC.100/D, MISC.100/B/9, November 27,1965, PRO CAB 130/254. 41. “Note to Minister of State,” by Roger Allen, November 29,1965. 42. See From Washington to Foreign Office, Tel. no. 3249, December 9,1965, PRO PREM 13/564. It reports a meeting with George Ball in which the United States signals that it has decided to support a voluntary oil embargo as well as an emergency airlift of oil to Zambia. 43. Securing U.S. agreement in supporting an emergency (and very costly) air­ lift of oil to Zambia was a major achievement, as the United States was escalating the Vietnam conflict. Apparently, a major factor in the U.S. decision was the need to maintain access to Zambian copper, which the British fully exploited. Accord­ ing to one document regarding negotiating tactics, “the ultimate threat to copper production seems our best weapon and if we can satisfy the Americans that despite every effort on our part alone, there will still be a dangerous shortfall in P.O.L. supplies until surface routes are fully operative, we might get the right answer from

216

Notes to Pages 141-43

them” (From Washington to Foreign Office, Tel. No. 3289, December 15, 1965, PRO PREM 13/564). U.S. policy toward Rhodesia was guided by three principles: (1) that UDI was a British problem and the United States should play a follower’s role only; (2) that U.S. assistance to Britain should avoid committing U.S. troops to Africa or underwriting the pound; and (3) that given these limitations—and always in cooperation with Britain—the United States should take measures designed to pressure the Smith regime and to abate black African demands for more extreme action (U.S. Department of State, “Outline of Rhodesian Problem,” 1). 44. “Memorandum for the President: Export Licensing for Southern Rhode­ sia,” November 18,1965, Attachment, 2. 45. U.S. Department of State, “Outline of Rhodesian Problem,” December 1, 1965,2. 46. “Assessment of the Present Position and Proposals for Further Action,” Note by the Chairman of MISC.100/G, MISC.100/B/15, December 11,1965, PRO CAB 130/254. 47. “Oil Sanctions against Rhodesia,” Note by the Foreign Office, December 7,1965, PRO CAB 130/257. 48. “Note to Minister of State,” by Roger Allen, November 29,1965. 49. U.S. Department of State, “Outline of Rhodesian Problem,” December 1, 1965. 50. Rhodesia: Steering Committee, Note of a Meeting Held in the Minister of State’s Room, Commonwealth Relations Office, MISC./100/C/15th Meeting, December 10,1965,1, PRO CAB 130/255. 51. In fact, Britain appears to have used the specter of uncontrollable pressure for mandatory UN military sanctions as a threat to dissuade Rhodesia from undertaking retaliatory measures against Zambia. In a message to be delivered to Ian Smith by the Rhodesian governor, Prime Minister Harold Wilson warned that:

While our decision to announce an oil embargo and a Zambian airlift might sta­ bilise the United Nations position we shall be lucky to avoid a mandatory Res­ olution under Chapter 7 of the United Nations Charter binding all states to apply full economic and oil sanctions. There is a serious danger that this will extend to a mandatory Resolution involving international military intervention. ... this cannot be averted by any veto action. Even if that were possible it would immediately be transferred to the General Assembly where there would be an overwhelming majority. ... it is most unlikely that international military action including inevitably certain big Powers can be delayed for more than a very short period and the like­ lihood of Russian or East European participation is very grave. . . . Indepen­ dently of any possible United Nations action [Rhodesia] will have seen that Zambia is sending a mission to Moscow and Washington because of the British refusal to use force. . . . any attempt by [Rhodesia] to retaliate against Zambia because of an oil sanction would speed this process and lead to almost inevitable large scale mili­ tary intervention.

Notes to Pages 143-44

217

This is a working draft. Harold Wilson was in Washington at the time, working out the final details of the oil embargo with the United States (From Washington, DC to Foreign Office, Tel. No. 3365, December 17, 1965, PRO PREM 13/564). I have not located the final text of the message, although in the minutes of a meeting held later that day in the British embassy, Harold Wilson referred to this “mes­ sage” to Smith and remarked that he hoped (but doubted) that it would make Smith see the light (Meeting Held at the British Embassy, Washington, Friday, December 17,1965, PRO PREM 13/564). 52. The market shares were: Shell Rhodesia (Pvt) Ltd. (39.1 percent); BP Rhodesia (Pvt) Ltd. (12.9 percent); Mobil Oil Southern Rhodesia (Pvt) Ltd. (20 percent); Caltex Oil Rhodesia (Pvt) Ltd. (20 percent); and Total Rhodesia (Pvt) Ltd. (8 percent). Shell and BP operated jointly in Southern Africa and were often referred to as the Consolidated Companies. Shell was the dominant partner in the relationship as it had operated longer in this region. The two companies, however, split equally their subsidiaries’ earnings. See Bingham report, 2-11. 53. See “Oil Embargo against Rhodesia,” Note by P. H. Gore Booth, Foreign Office file IOD 2241/2, November 15, 1965, PRO FO 371/181592. In the note, Gore Booth writes that “when I had lunch with A.E.I. on 11 November, the Chair­ man, Mr. C.R. Wheeler, said that the oil companies were perfectly prepared to put into operation with great speed a rationing system which would cover not only Rhodesia itself but also South Africa and the Portuguese territories, the effect of which would be to impose a very considerable strain on South Africa if the latter were to give a priority to keep Rhodesia going.” 54. See Note for the Record: Oil for Rhodesia, November 26, 1965, PRO PREM 13/564. According to the note, “It is clear that B.P. have already moved a long way under our pressure. . . . The ship [British Security] will not be loading until Sunday, and has thus already been delayed two days. This delay has enabled us to clear our possible lines of action with B.P., and the ship is now firmly under our control.” This ship ultimately sailed and was the last tanker to offload its cargo at Beira. 55. Bailey, Oilgate, 126; Bingham report, 45. 56. Bingham report, 46. 57. “Rhodesia: Steering Committee: The Oil Embargo: Conflicts of Jurisdic­ tion and Authority,” Note by the Ministry of Power, MISC.100/C/11 (revised), December 22,1965, PRO CAB 130/255. 58. Bailey, Oilgate, 126. 59. U.S. Department of State, “Rhodesia/Zambia Situation Report no. 17,” Wednesday-Thursday January 26-27,1966, 3. 60. From Cape Town to Foreign Office, Tel. No. 119, February 16,1966, PRO PREM 13/1137. 61. Bingham report, 48. This was also the interpretation given by the United States. See U.S. Department of State, “Outgoing Telegram to American Embassy London, American Consulate Capetown, and American Consulate Pretoria,” December 28,1965. 62. Cable from L. Walker, Shell South Africa to Shell London, December 24, 1965, reprinted in Bingham report, 47.

218

Notes to Pages 144-48

63. Rand Daily Mail, January 3, 1966. See also Bailey, Oilgate, 126-7 and Jorge Jardim, Sanctions Doublecross: Oil to Rhodesia (Lisbon: Intervençao, 1977), 32-34. 64. Rand Daily Mail, January 6, 1966. 65. Rhodesia Herald, December 28,1965. 66. Rand Daily Mail, January 7, 1966. 67. Rhodesia Herald, January 21, 1966; Rand Daily Mail, January 21, 1966; and Rhodesia Times, January 21,1966. 68. Department of State, “Outgoing Telegram,” December 28, 1965. See also Bingham report, 61-62; Jardim, Doublecross, 35-36; and Rhodesia: Steering Com­ mittee, Minutes of a Meeting of the Committee held in the Minister of State’s Room, Commonwealth Relations Office, MISC.100/C/24th meeting, December 29,1965, 3, PRO CAB 130/255. 69. Cable from L. Walker to Shell London, December 24, 1965, reprinted in Bingham report, 47. See also From Cape Town to Foreign Office, Tel. No. 49, Jan­ uary 31 1966, PRO PREM 13/1137. 70. Rand Daily Mail, January 22,1966. 71. Rand Daily Mail, January 27,1966. 72. Bingham report, 54-55; also Note of a Meeting with Representatives of Shell and BP about the Oil Position in South Africa and Southern Rhodesia, April 19,1965, PRO POWE 63/206; Cape Town to Foreign Office, Tel. No. 49, January 31,1966. 73. Cape Town to Foreign Office, Tel. No. 49, January 31,1966. 74. Cable from L. Walker, Shell South Africa to Shell London, January 28, 1966, reprinted in Bingham report, 54-55. Also see Cape Town to Foreign Office, Tel. No. 49, January 31,1966. 75. See, for example, “Brief for Lord Walston,” n.d. (May?) 1966, file JR 1531/33, PRO FO 371/188037. 76. F. S. Fielding, Record of a Conversation with Louis Walker, General Manager of Shell South Africa, Johannesburg, June 13, 1966, file JR1531/129, PRO FO 371/188039. 77. Note of a Meeting with Representatives of Shell and BP about the Oil Posi­ tion in South Africa and Southern Rhodesia, April 19,1966, PRO POWE 63/206. 78. Note: Shell/B.P. in Southern Africa, November 17, 1967, PRO FCO 25/541. 79. Letter from the South African Minister of Economics to the Managing Directors of Shell South Africa and BP Southern Africa, October 1968, reprinted in Bingham report, 28-29. 80. Rand Daily Mail, February 15, 1966. 81. Bingham report, 118. 82. Rand Daily Mail, February 16, February 25. The oil companies believed that early press reports exaggerated the flow of oil. See Cape Town to Foreign Office, Tel. No. 119, February 16,1966, PRO PREM 13/1137. 83. Rhodesia: Oil Leakages and Stocks in March, n.d. (April?) 1966, POWE 63/226. The transshipment of oil to South Africa and then back to Rhodesia proved extremely expensive for Rhodesia. As busting the embargo became more

Notes to Pages 148-51

219

routinized, this subterfuge was dropped, and oil was shipped directly to Rhodesia from Lourenco Marques. See Bingham report, 112-35. 84. J. Q. Wright to O. Forester, Commonwealth Relations Office, February 16,1966, PRO PREM 13/1137. 85. Rand Daily Mail, March 1, 1966. 86. Robert C. Good, U. D. I. The International Politics of the Rhodesian Rebel­ lion (Princeton: Princeton University Press, 1973), 139-40. 87. Good, U. D. L, 141. Under the Resolution, Britain diverted a second tanker, the Manuela, which had also been chartered to deliver oil to Beira for pumping to Rhodesia. 88. Good, U. D. I., 141. 89. From Foreign Office to Cape Town, Tel. No. 777, April 13, 1966, PRO PREM 13/1118. Stephenson, the British ambassador to South Africa, objected strenuously to any explicit threat to impose sanctions against South Africa. South Africa would be unlikely to comply with any threat, he argued, leading “to the worst of all possible worlds—with the rebel regime in Rhodesia strengthened by the accession of a powerful ally, white supremacy in southern Africa strengthened for many years to come and our own interests jeopardized” (From Cape Town to Foreign Office, Tel. No. 358, April 14, 1966, PRO PREM 13/1118). This debate within the British government about how best to pressure South Africa was made moot the very next day by South Africa’s threat to impose countersanctions. See below. 90. Text of a letter dated Pretoria, 15th April, 1966, from Dr. the Hon. H. F. Verwoerd, M.P., Prime Minister of the Republic of South Africa to the Rt. Hon. H. Wilson, M.P., Prime Minister of Great Britain, PRO PREM 13/1140. 91. From Foreign Office to Cape Town, Tel. No. 644, April 4, 1966, PRO PREM 13/1139. 92. Text of a letter dated Pretoria, 15th April, 1966, from Dr. the Hon. H. F. Verwoerd, M.P., Prime Minister of the Republic of South Africa to the Rt. Hon. H. Wilson, M.P., Prime Minister of Great Britain. 93. Foreign Office to Cape Town, Prime Minister’s Personal Telegram, Tel. No. 829, April 18,1966. 94. Note for the Prime Minister by J. Oliver Wright, July 28, 1966, in PRO PREM 13/1124. See also, for example, Cabinet, Rhodesia Talks, Minutes of a Meeting of the Committee held in the Prime Minister’s Room, House of Com­ mons, S.W.I., on Friday, July 22, 1966 at 2.30 pm; “Cabinet: Future Policy on Rhodesia,” Memorandum by the Secretary of State for Commonwealth Relations, July 30,1966; and Cabinet, Rhodesia Talks, Minutes of a Meeting of the Commit­ tee held at 10, Downing Street, S.W. 1., on Wednesday, August 31,1966 at 3.00 pm. PRO CAB 134/3167. 95. In May 1966, the Ministry of Power told Shell that the British government wished “not to ‘rock the boat’” in any dealings with South Africa, information that Shell then passed to BP (Bingham report, 78-83). 96. Cabinet, Rhodesia, Memorandum by the Secretary of State for Common­ wealth Affairs. C(66) 179, September 9,1966, PRO CAB 129/127. 97. Cabinet, Rhodesia Talks, Minutes of a Meeting of the Committee held at

220

Notes to Pages 151-54

10, Downing Street, S.W.I., on Thursday, September 8, 1966 at 9.30 am, PRO CAB 134/3167. 98. Foreign Office to Commonwealth Relations Office and Certain Missions, May 24,1966, file JR 1531/95 in PRO FO 371/188039. 99. F.S. Fielding, Record of a Conversation with Louis Walker, General Man­ ager of Shell South Africa, Johannesburg, June 13, 1966, file JR1531/129 in PRO FO 371/188039. Walker also suspected Esso and Total of supplying Rhodesia. See Pretoria to Foreign Office, Tel. No. 454, May 14,1966, in file JR1531/66, PRO FO 371/188038. Suspicions about SASOL’s role were also raised by the General Man­ ager of BP South Africa. See John Wilson to R. A. Farquharson, August 19,1966, PRO FO 371/188039. 100. Mr. Dickenson, the general manager of the Consolidated Companies (Shell and BP) in Rhodesia, would later complain that during the first nine months of 1966 he did not receive “the support from Shell South Africa that other compa­ nies here were receiving from their Associates in South Africa” (letter from Dick­ enson to de Bruyne, August 1967, quoted in Bingham report, 76). Likewise, one Shell South Africa manager responded to initial internal reports that the company was supplying Rhodesia by saying that it was “high time that we caught up with the others ... we can’t see our share of the market going down the drain” (Bing­ ham report, 119). 101. Letter from Walker to DeBruyne, June 2,1966, Bingham report. 102. “Cabinet, Rhodesia: Mandatory Sanctions,” Memorandum by the Secre­ tary of State for Commonwealth C(66)173, November 25, 1966, PRO CAB 129/127. 103. Record of a Conversation Between the Prime Minister and the South African Ambassador at 10 Downing Street at 12.15pm on Tuesday, December 13, 1966, PROPREM 13/1142. 104. Powell, Ministry of Power to Clinton-Thomas, Commonwealth Office, February 15,1968; also Background Note, February, 1968, PRO FCO 35/205. 105. Bingham report, 71. 106. Testimony of Lord Thomson to Bingham Inquiry, Bingham report, 105. 107. Bingham report, 118-19. 108. Report by Jorge Jardim to Dr. Salazar of a Meeting with Mr. D. H. Cummings (Secretary for the Minister of Commerce, Industry and Develop­ ment), October 18, 1965, quoted in Bingham report, 34. See also Jardim’s per­ sonal account of Rhodesia’s early attitude towards oil sanctions in Doublecross, 17-23. Britain was clearly skeptical about the French company’s willingness to participate in any embargo. One British planning document states that “it is extremely dubious whether sufficient co-operation or effective co-operation could be secured from other governments to stop all supplies of oil, crude or products. The attitude of the French may prove equivocal, in spite of general U.N. support for an oil embargo” (“Southern Rhodesia: Action in the Event of a U.D.L: Oil,” MISC 84/15, October 22,1965,2). Likewise, a later report reads, “It cannot be reliably predicted how far the French would be willing or able to direct their oil companies to cooperate.... French companies have plenty of oil,

Notes to Pages 154-57

221

including the company [Total] which is a partner in the Rhodesian refinery” (“Rhodesia: Oil Sanctions,” Note by the Secretaries, MISC.100/D/2, November 22,1965, 2). 109. Bingham report, 38; Jardim, Doublecross, 17; Bailey Oilgate, 110-11. 110. Bailey Oilgate, 114; Jardim, Doublecross, 17-23. See also Commonwealth Secretariat, Oil Sanctions, 9-10. 111. A report by the Commonwealth Secretariat estimates total stocks at the time of the embargo at ninety days (Commonwealth Secretariat, Oil Sanctions, 9-10). The Bingham report notes that on December 9, 1965, Rhodesia had about two months’ supply if stocks held at Beira are not taken into account (Bingham report, 39). 112. Bingham report, 49. See also British Petroleum, “Investigation,” 28-29, and Commonwealth Secretariat, Oil Sanctions, 6. 113. The Bingham report has direct evidence of this directive for Shell only, but presumes that similar directives were issued to the other companies (Bingham report, 49). 114. Bingham report, 61. Even before informing the Rhodesian government of its intention to quit pumping, Shell had already directed its employees not to pump (“Rhodesia: Steering Committee: The Oil Embargo: Conflicts of Jurisdiction or Authority,” Note by the Ministry of Power, MISC.100/C/11 [revised], December 22,1965,2, PRO CAB 130/255). 115. See note 68 above. 116. Bingham report, 62. 117. Emphasis in original (Bingham report, 58-59). See also Jardim, Double­ cross, 41. 118. The Rhodesians often seemed to approach sanctions with tongue in cheek. One source told me that one of the government’s sanctions-busting agencies wanted to use “-007” as its telephone number suffix and was disappointed to find this number already taken. 119. Bingham report, 62-63. GENTA was a privately registered corporation, incorporated on February 16,1966, although it was already active in mid-January. GENTA had no official status, but it was an open secret that GENTA was an arm of the Rhodesian government. In fact, GENTA’s head, George Atmore, was a senior civil servant. See also British Petroleum, “Investigation,” 28-29. 120. Government of Rhodesia, Secret Supplement of Monthly Statistics (Salis­ bury: Government Printer, July 1979), 32-34. Rhodesia recovered quickly from the shock. By 1967, imports in this category actually exceeded 1965 levels by 25 percent. Unit prices also returned to normal levels. In 1967, prices were only 10 percent higher than in 1965 and remained steady until 1974 when they were dou­ bled by the oil crisis. Unlike the sanctions, the oil crisis had a severe and lasting impact on the Rhodesian economy as by 1978 oil prices had nearly doubled again. 121. Financial Times, May 9,1966. 122. Bingham report, 188. 123. Rand Daily Mail, February 19, 1966. 124. Rhodesia Herald, April 30, 1966. See also the remarks by Bruce Mussett,

222

Notes to Pages 157-60

Rhodesia’s minister of commerce and industry, Rand Daily Mail, May 10, 1966; and Rhodesia Herald, May 10,1966. 125. Bingham report, 68. 126. A small amount of product was also procured from a refinery in Mozam­ bique. 127. This pattern would vary only slightly over the ensuing years as new routes of supply were found. In 1968, Shell arranged for its sales to Rhodesia to be sup­ plied through a product swap with Total. Shell had discovered its Mozambican subsidiary was knowingly supplying Rhodesia with product. This act directly con­ travened Britain’s sanctions orders, as Shell Mozambique was a London-regis­ tered company. Under the swap, Total supplied Shell’s orders for Rhodesia, while Shell provided an offsetting amount of product to Total depots in the Transvaal. This arrangement was okayed by the British government, lasting until 1972. In 1975, the Beit Bridge route came back into play as newly independent Mozam­ bique closed its border with Rhodesia. However, its capacity was increased by a rail link that had been completed between the two countries. Finally, from 1977 onward, the British and American oil companies came under increasing pressure from a series of disclosures about their sanctions-busting activities. Again, their response was to institute a series of market swaps—this time with the South African company SASOL. These changes in the pattern of supply to Rhodesia were minor and did not impede its ability to procure sufficient supplies of petro­ leum products. 128. Rand Daily Mail, May 10, 1966. 129. Rounce Memorandum, BP Southern Oil Ltd., February 1974, reprinted in Bingham Report, 147-50. 130. Bingham report, 187. 131. Klinghoffer, Oiling the Wheels, 82. 132. Aide Mémoire, Meeting Between the Hon. B.H. Musset, MP., Minister of Commerce and Industry & R.F. Barrie: 10:00AM, Thursday 27 March 1969. Reprinted in Bingham report, 273-74. 133. The British dismissed the offer as special pleading (Carter, British High Commission, Salisbury to Clinton-Thomas, Commonwealth Office, August 23, 1968; and Clinton-Thomas, Commonwealth Office, to Carter, British High Com­ mission, Salisbury, September 16,1968, PRO FCO 35/208). 134. Clinton-Thomas, Commonwealth Office, to Carter, British High Commis­ sion, Salisbury, September 16,1968, PRO FCO 35/208. 135. Jardim, Doublecross, 105; Bailey, Oilgate, 223. 136. British Petroleum, “Investigation,” 29. 137. Bingham report, 189. 138. Letter from R. F. Barrie of Shell Rhodesia to Mr. Francis at Shell Centre London, May 6,1969, quoted in Bingham report, 162. 139. Jardim, Doublecross, 94. Jardim also notes (99) that GENTA put constant pressure on him to lower the prices of product supplied by Sonarep, the Portuguese refinery operating in Mozambique, which supplied only minor amounts of petro­ leum fuels to Rhodesia. 140. Rounce Memorandum, reprinted in Bingham report, 147-50.

Notes to Pages 163-70

223

Chapter 7

1. This was the last of five principles governing the award of independence set down by Harold Wilson in 1965 (Robert Blake, A History of Rhodesia [London: Eyre Methuen, 1977], 376-77). 2. Great Britain, “Rhodesia: Report of the Commission on Rhodesian Opin­ ion under the Chairmanship of the Right Honourable Lord Pearce,” Presented to Parliament by the Secretary of State for Foreign and Commonwealth Affairs (London: Her Majesty’s Stationery Office, 1972). 3. Stephen John Stedman, Peacemaking in Civil War: International Mediation in Zimbabwe, 1974-1980 (Boulder: Lynne Rienner, 1991), 36-37. 4. William Minter and Elizabeth Schmidt, “When Sanctions Worked: The Case of Rhodesia Re-examined,” African Affairs 87 (April 1988), 220-25; Mar­ garet Doxey, “The Making of Zimbabwe: From Illegal to Legal Independence,” Year Book of World Affairs 36 (1982), 157. 5. A compelling account of Rhodesia’s decline is David Caute’s Under the Skin: The Death of White Rhodesia (London: Allen Lane, 1983). Caute emphasizes the impact of the war on Rhodesia. 6. See especially Ian Smith’s account in Michael Charlton’s The Last Colony in Africa: Diplomacy and the Independence of Rhodesia (London: Basil Blackwell, 1990), 2-5. For an analysis of the various attempts to resolve the conflict, see espe­ cially Stedman, Peacemaking in Civil War. 7. Johan Galtung, “On the Effects of International Economic Sanctions, with Examples from the Case of Rhodesia,” World Politics 19 (April 1967): 378-416. 8. Galtung, “On the Effects,” 378. 9. Alan Cousins, “State, Ideology and Power in Rhodesia, 1958-1972,” Inter­ national Journal of African Historical Studies 24 (1991): 35-64; Victor De Waal, The Politics of Reconciliation: Zimbabwe s First Decade (London: Hurst and Com­ pany, 1990), chaps. 2 and 3. 10. Stedman, Peacemaking in Civil War, 39; Ken Flower, Serving Secretly: An Intelligence Chief on Record, Rhodesia into Zimbabwe 1964 to 1981 (London: John Murray, 1981). 11. Remarks by Sir Roy Welensky, quoted in chapter 4 above. 12. “Rhodesia: Peace Aims,” Note by the Secretary of State for Common­ wealth Relations, MISC.100/A/13, December 14,1965, PRO CAB 130/254. 13. This also assuaged the worries of those whites who most feared the nation­ alist threat. In November 1965, Sir Edgar Whitehead judged that the Rhodesian Front had succeeded, as the “Africans would never trust any alternative European Government; white/black confidence had been completely destroyed in the course of the last three years” (Record of a Meeting Between the Commonwealth Secre­ tary and Sir Edgar Whitehead, Former Prime Minister of Rhodesia, in the House of Commons, November 16, 1965, PRO PREM 13/546). On the Rhodesian Front’s racial policies, see, for example, Reg Austin, Racism and Apartheid in Southern Africa—Rhodesia: A Book of Data (Paris: UNESCO Press, 1975). 14. From a letter by R. F. Barrie of Shell Rhodesia to Mr. Francis at Shell Cen­ tre London, May 6,1969, quoted in Bingham report, 162, and chapter 6, n. 138.

224

Notes to Pages 171-78

15. Ronald Rogowski, “The Role of Theory and Anomaly in Social-Scientific Inference,” American Political Science Review 89 (June 1995): 467-70. 16. George W. Baer, “Sanctions and Security: The League of Nations and the Italian-Ethiopian War, 1935-1936,” International Organization 27 (spring 1973): 179. 17. See, for example, Anna P. Schreiber, “Economic Coercion as an Instru­ ment of Policy: U.S. Measures against Cuba and the Dominican Republic,” World Politics 25 (April 1973), 405; Margaret Doxey, International Sanctions in Contem­ porary Perspective (London: MacMillan, 1987), 115-17; Donald L. Losman, Inter­ national Economic Sanctions: The Cases of Cuba, Israel, and Rhodesia (Albu­ querque: University of New Mexico Press, 1979), 129. 18. Susan Woodward, “Yugoslavia: Divide and Fail,” Bulletin of Atomic Sci­ entists 49 (1993): 27. 19. Although economic sanctions were not applied directly against Iraqi imports of food, the boycott of Iraqi oil reduced its ability to finance imports, caus­ ing imports of food to fall by more than half (Alan Dowty, “Sanctioning Iraq: The Limits of the New World Order,” Washington Quarterly 17 [1994], 184). 20. On the critical need to shift the focus of sanctions studies away from the traditional focus on success or failure, see especially Jonathan Kirshner, “The Microfoundations of Economic Sanctions,” Security Studies 6 (spring 1997): 32-64. 21. See, for example, Thomas O. Bayard, Joseph Pelzman, and Jorge Perez Lopez, “Stakes and Risks in Economic Sanctions,” World Economy 6 (March 1983): 73-88. The problem of multilateral enforcement is a central theme of Lisa L. Martin’s Coercive Cooperation: Explaining Multilateral Economic Sanctions (Princeton: Princeton University Press, 1992). 22. On the importance of this point, see also Kirshner, “The Microfounda­ tions of Economic Sanctions.” A recent example of poorly designed research is Robert A. Pape’s “Why Economic Sanctions Do Not Work,” International Secu­ rity 22 (fall 1997): 90-136. Pape’s analysis suffers all of the flaws of the sanctions literature outlined in chapter 1. Moreover, even though Pape claims to explain “why” economic sanctions do not work, which requires a causal theory of how sanctions influence, all but two pages of the forty-six page article are devoted instead to producing the highly dubious empirical claim that economic sanctions “worked” only 5 out of 115 times. Even then, Pape neglects to develop any type of coherent causal framework but simply asserts that “modem states are not fragile” because nationalism, administrative capacity, and the ability of ruling elites to shift costs onto their opponents make them impervious to almost all forms of economic coercion. 23. This also suggests a “tipping” character to political protest. So long as gen­ eralized retaliation by the government is seen as likely, individuals will not rally to political entrepreneurs who seek to mobilize their grievances, and politics will be marked by strong norms of political conformity. Once the probability of general­ ized government retaliation falls below a threshold, norms of political conformity will collapse and opposition will rapidly swell. 24. The autonomy of the state from capitalist economic interests was a central

Note to Page 179

225

subject of debate among Marxists theorists in the 1970s. See, for example, Fred Block, “The Ruling Class Does Not Rule: Notes on the Marxist Theory of the State,” Socialist Revolution 33 (1977): 6-28, reprinted in The Political Economy: Readings in the Politics and Economics of American Public Policy, ed. Thomas Fer­ guson and Joel Rogers (Armonk: M. E. Sharpe, 1984): 32-46. 25. Peter Gourevitch, “The Second Image Reversed: The International Sources of Domestic Politics,” International Organization 32 (autumn 1978): 881-911; Ronald Rogowski, Commerce and Coalitions: How Trade Affects Domes­ tic Political Alignments (Princeton: Princeton University Press, 1989); Jeffry A. Frieden, Debt, Development, and Democracy: Modern Political Economy and Latin America, 1969-1985 (Princeton: Princeton University Press, 1991); Helen Milner, Resisting Protectionism (Princeton: Princeton University Press, 1988); Robert Keohane and Helen Milner, eds., Internationalization and Domestic Politics (New York: Cambridge University Press, 1996).

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Note on British and U.S. Government Documents

British government documents cited in the notes but not listed in the bibliography are available at the Public Record Office, London. U.S. government documents cited in the notes but not listed in the bibliography are available at the Lyndon Baines Johnson Presidential Library or from Research Publications, Inc., The Declassified Documents Reference System, unless otherwise noted.

Index

Africa Bureau, 130n, 134n African National Congress (ANC), 44, 46, 50, 59 African nationalism, 105 African nationalists, 9, 37,44,47, 59n, 167; and civil war, 38; and demon­ strations in Northern Rhodesia and Nyasaland, 46. See also black nationalists; Rhodesia agricultural production, share of gov­ ernment control under sanctions, 79 Allen, Roger, 141n, 142n analytic narratives, 19 Aristide, Jean-Bertrand, 5 Armstrong, Peter, 73n, 74n, 93n Arnold, Guy, 63n, 79n, 130n Arrighi, Giovanni, lOn, 99n, lOOn Associated Chamber of Industry, 100 Associated Chambers of Commerce of Rhodesia (ACCOR), 104,109, 178; and economic sanctions, position on, 107; and foreign exchange, 116-19, 129-30. See also business community Association of Rhodesian Industries (ARnI), 39,107,110, 120, 127, 178; and economic sanctions, position on, 107; and foreign exchange, 116, 119-20, 129-30. See also business community Austin, Reg, 168n

Baer, George, 171, 172n Bailey, Martin, 136n, 143, 144n, 154n, 159 Baldwin, Alan, 63n, 79n, 130n

Baldwin, David, In, 2, 3n, 6n Barber, James, 2n, 39n, 60n, 7In, 107n Barbour, H. M., 117 Barrie, R. F., 160 Bashford, Pat, 64, 87n Bates, Robert H., 19n, 20n, 23n, 26n, 35, 35n, 42n, 86 Bayard, Thomas O., 174n BBC, 8 Becker, Charles, 5n Beira blockade, 148-49; and South Africa, 149-51 Bell, Don, 73 Bergerijk, Peter A. G. van, 3n Bertram, Neville, 11 In, 114-15 Bingham, T. H. See Bingham Report. Bingham Report, 134n, 135n, 136n, 137n,138n, 143n, 144n, 145n, 146n, 147n, 151n, 152n, 153n,154n,155n, 156n, 157n, 158n, 159, 159n, 160n, 170n. See also Britain; oil embargo Black, P. A.,21n black Africa, 2, 106,175; demands for oil embargo, 139-41 black farmers, 65, 68, 70 black labor, 102,103,105 black nationalists, 10, 18, 59, 163; early political strategy of, 49-51; and racial polarization, 59; and violence, 50-52, 57-58. See also African nationalists; Rhodesia blacks, effects of sanctions on, 19; wages, 41,70, 103, 104 Blake, Robert, 52, 52n, 57n, 60n, 105n, 110, 163n Blanchard, Jean-Marc, 2n 235

236

Index

Block, Fred, 178n Blocked Funds Trust, 113 Bonetti, Shane, 3n Bowman, Larry, 36n, 39n, 46n, 47n, 50n, 52n, 54n, 56n,58n,63n,71n, 97n,107n boycotts. See export sanctions Britain, 2, 3, 7,9, 38,105,110; and black Africa, 140-41; and Common­ wealth, 139-40; and constitutional talks with Rhodesia, 46; and decolo­ nization, 36; and economic sanc­ tions, against Rhodesia, 6, 60, 106-7; and formal powers, over Rhodesia, 36-37; and Forum, 122-23; and imports, of Rhodesian tobacco, 67; and oil embargo, 134-35, 139-43, 151-53, 161; and Rhodesian countersanctions, 136-38; and Rhodesian indepen­ dence, 36, 37, 54, 56, 57,79,106; sanctions, objectives of, 10,11,19, 61,175; and South Africa, 146, 149-52,175; and South African countersanctions, 135n, 149-52; and tobacco boycott, 63; and United Nations’ mandatory sanctions, 151-52; and United States, 141-43. See also oil embargo; Rhodesia; South Africa; tobacco boycott; United Nations; United States British Petroleum company (BP), 133, 134n, 135, 136n, 138,143,143n, 151n, 155n,158-59, 159n, 160. See also oil embargo British South Africa Company (BSAC), 36-37, 65n, 98,99; and development of Rhodesia’s tobacco industry, 65-66 Britten, M. J., 129 Brown, George, 139 Bull, Theodore, 46n, 50n, 52, 52n Burl, John, 83n business community, 10-11, 37-38,96, 101-5; and Britain, 37-38; composi­

tion of, 100; conflicts within, 100-101,128-30; and economic sanctions, position on, 106-7; and independence, 96,105-7; and major­ ity rule, 96; and nationalists, 131; and political settlement, attitudes toward, 127-28; and race relations, 101-5; and Rhodesian Front, politi­ cal opposition to, 96-97,108-30; and Rhodesia’s economic and politi­ cal development, 96,98-101; and sanctions, behavior under, 96-97, 107-9,130-32; and sanctions, effects on, 108-10,124-30,164. See also commercial sector; domestic manu­ facturing; mining industry Butler, Mike, 79,92 Caltex oil company, 133, 133n, 135, 143n, 159. See also oil embargo Cambitzis, Nicholas, 120 Campbell, Evan, 80-81,108,108n, 11 In, 114—15,121-22,122n; and set­ tlement, efforts to promote, 110—11, 131 Campbell-Newson protest, 131 CAPREF, 137, 137n, 145. See also Feruka refinery Carbaugh, Robert, 21 n case studies, 7,17 Castro, Fidel, 5,172 Caute, David, 11, lln, 164n Cayser, Sir Nicholas, 80 Central African Federation, 36, 37,41, 68,100-101,104; breakup of, 106; and Rhodesian development, impact on,101 Centre Party, 87n, 123 Chamber of Mines, 39,98; and eco­ nomic sanctions, position on, 107 Charlton, Michael, 8n, 12n, 37n, 164n Chimurenga war, 7,10,18,112. See also Rhodesia, and guerilla war Chitepo, Herbert, 46; assassination of, 10

Index

Christiansen, Drew, 6n Christiansen, Robert E., 12n City Youth League, 44 Clements, Frank, 9n, 37n, 38n, 39n, 43n, 44,44n, 45n, 46n, 47n, 48n, 50n, 5In, 55n, 57, 57n, 65,65n, 66n, 67n, 69-70, 69n, 70n, 85n, 87, 87n, 122, 169; and Reconstruction Party, 84-85, 114-15 Cole, R. L., 63n, 66n, 67n collective action, 86,176-77 collective action dilemma, 20,94-95 commercial sector, 17,41,96,98; and economic sanctions, 125-26; devel­ opment of, 99; power of, 99. See also business community Commission of Inquiry into Import Control, 116-20 Commonwealth, 2,106,175 Commonwealth Secretariat, 154n Congo, Belgian pullout from, 9 Control of Goods and Services Regu­ lations, 113 Cooper, H., 21n Corina, Maurice, 67n Cortwright, David, 2n Cousins, Alan, 39n, 165n Cuba, economic sanctions against, 5, 6,172

Dajani, M. S., In, 2n Daoudi, M. S., In, 2n Dashti-Gibson, Jaleh, 2n, 3n Davis, Patricia, 2n, 3n de Bruyne, Dirk, 137n, 151,151n de Metz, M., 155 De Wal, Victor, 1 In, 58n, 165n de Wet, Jack, 82, 88 Dillon, Ian Birt, 114n dollar shortage, 40,99 domestic manufacturing, 17,41,96, 98,99-100; and economic sanctions, 126-28; and infant industry tariffs, 99-100; political strength of, 100. See also business community

237

Dominion Party, 43,45,47,48, 51 Dowty, Alan, 172, 172n, 173 Doxey, Margaret, In, 2n, 6In, 163n, 172n Drury, A. Cooper, 2n Dunlop Tyre, 114 DuPont, Clifford, 126n Eckstein, Harry, 7n economic interdependence, 177-79 economic sanctions: impact of, on target’s domestic politics, 4, 5, 23-27, 29-33, 35,171-74; and insti­ tutional change, 35; lack of success of, 3-4,173-76; purposes of, 1,3, 5; and state of current knowledge, 2-4; and tendency to unify target coun­ tries, 5, 6,171-74; theories about, 4-6,16; types of, 20-21; usefulness of, to policymakers, 15-16,174-76; usefulness of, to scholars, 16. See also export sanctions; import sanctions economic security, 14,15 Edridge, Tom, 78, 88n, 92 Elliott, Kimberly Ann, 2n, 3, 3n, 5n, 6n,23n embargoes. See import sanctions. emergency powers, 113-14; Emergency Powers (Control of Corporations) Regulation, 113; Emergency Powers (Control of Manpower in Petroleum Products Industry) Regulations, 155; Emergency Powers (Investment of Blocked Funds) Regulation, 113; Emergency Powers (Price Control Order), 114 Esso, 151n export sanctions, 21-27; and institu­ tional change, 23-27; large country case, 33-35; and political dissent, suppression of, 26-27; and target country, effects on, 21-27. See also economic sanctions; import sanc­ tions

238

Index

Fearless talks, 11, 12, 61, 76,110. See also Britain; Rhodesia

Federation of Rhodesian Industry, 100 Feruka refinery, 144. See also CAPREF Field, Jeremy, 80,92 Field, Winston, 55,64, 79, 83 Flower, Ken, 166n foreign exchange rationing under sanc­ tions, 115-20 Forum, The, 110,114—15; and British government, 122-23; and nonpoliti­ cal protest, 121-22; and political opposition, 123-24; and talks with Ian Smith, 122 Freeman, Ginger, 67n, 73 Frieden, Jeffry A., 13n, 14n, 179n Frye, Timothy, 24n, 86n

Galtung, Johan, 2n, 4,4n, 5, 5n, 6, 6n, 64n, 97n,164,165,165n Garrett, Geoffrey, 14n, 20n GENTA, 134,156-62,156n, 160n, 168-69,170,179 George, Alexander, 4n Gibbs, Sir Geoffrey, 108 Goldwasser, Jurick, 117 Good, Robert C., 148n, 149n Gore Booth, P. H., 143n Gourevitch, Peter, 14n, 179n Gray, S. M. See Bingham Report Graylin, John, 129 Great Britain. See Britain Great Depression, 39 Greif, Avner, 19n Haas, Richard, 2n Hadden, Eileen, 8In, 86n Haiti, economic sanctions against, 5,6 Hall, Peter, 20n, 26n Hancock, Ian, 45n, 55n, 97n, 98n, 104n, 105n, 11 In, 112n, 131n Handford, John, 129n Harben, Edward, 65n, 66n, 67n, 69, 69n, 70n

Hardin, Russell, 23n Haresnape, Robert E., 67n Harper, William, 43, 85,169 Hatendi, David Tapuwa, 97n, 98n, 114n, 119n,131n Hawkins, Harold, 12 Hennings, John, 7In, 77n, 78, 78n, 79n, 80n, 85,85n, 87, 87n, 89n, HOn, 11 In, 115,115n, 117,118n, 122n, 123, 123n Herbst, Jeffrey, 98n, 99n, 101, lOln, 107n,121n Heurtley, Carol, 73, 78 Hirsch, Morris I., 48n, 54n, 55n, 64n, 83n Hoffman, Frederick, 2n Holdemess, Harkness, 58n Home, Sir Alec Douglas, 163 Howman, Jack, 61,6In, 11 On Hudson, Miles, 38n, 44n, 45n Hufbauer, Gary Clyde, 2n, 3, 3n, 5n, 6n, 23n Huggins, Godfrey, 39,100,104 Hughes, John, 109

import sanctions, 27-32; and institu­ tional change, 29-32; and political dissent, suppression of, 30-32; and target country, effects on, 27-29. See also economic sanctions; export sanctions Industrial Colour Bar, 70,102 Industrial Conciliation Act, 103,105; of 1934,102; of 1959,49 Industrial Development Commission, 39 industrial sector. See domestic manu­ facturing Institute of Directors, 107 institutional change, 13,14,18,20, 73-74,115-24,179-80; political con­ sequences of, 86-92,94-95,115-24, 131-32,158-61,168-70,179-80 institutions, 13,20 interdependence, 14

Index

international economie shocks, politi­ cal impact of, 12,13 Iraq, sanctions against, In, 33,172, 172n,173 Italy, sanctions against, 171-72 Jameison, P. M., 137n James, Robin, 85 Jardim, Jorge, 144n, 145n, 154,154n, 155, 155n, 159n, 160,160n

Kaempfer, William H., 5n Kenyatta, Jomo, 139-40,140n, 148 Keohane, Robert, 179n Kirkpatrick, Colin, 105 Kirshner, Jonathan, 2n, 3, 3n, 4n, 2In, 174n,176n Klinghoffer, Arthur J., 138n, 140n, 158n Kuanda, Kenneth, 135n Lancaster House talks, 7,9,163 Land Apportionment Act, 9, 38,42, 46,48, 52, 68, 70,103, 105 Lange, Peter, 14n, 20n Law and Order Maintenance Act (1960), 46 Lazell, D., 80 Levi, Margaret, 19n Leys, Colin, 38n, 39n, 41 n, 45n, 65n, 69n, 98n, 99n,100, lOOn, 102n, 104n,105n Libya, sanctions against, 33 Lichbach, Mark Irving, 23n, 26, 27n Lindsay, James N., 2n, 5n Lipton, Merle, 4n London Agreement, 70 Lopez, George A., 2n Lopez, Jorge Perez, 174n Lord Thomson, 153, 153n Losman, Donald, 2n, 172n Lowenberg, Anton D., 5n

Macdonald, J. G., 98n MacMillan, Harold, 36

239

Malawi, 60,100. See also Nyasaland March, D. M., 139n Marshall, Sir Douglas, 108,108n, 11 In Martin, Lisa L., 3n, 174n Mau Mau rebellion, 9 Mbanga, Trish, 65n, 66n, 67n, 68n, 7In, 72n, 73n, 74n, 79n, 92n, 93n McKeown, Timothy, 7n, 16n McQuillen, W. R., 135n Mezerik, A. G., 113n, 114n Milner, Helen, 13n, 179n Mining Board, 39 mining industry, 17,96,98; develop­ ment of, 98-99; and economic sanc­ tions, 124-25; political strength of, 98-99; and transfer pricing, 120-21. See also business community Minter, William, 2n, 6In, 64n, 97n, 163n Mitchell, Tim, 84, 85, 85n Mobil, 133, 135, 143n, 145,155. See also oil embargo Morgan, T. Clifton, 2n Morton, J. M., 81-82 Mosley, Paul, 68n, 70n, 98n, 99n, lOln, 104n Mozambique: and guerilla war, 163; and oil embargo, 134,136,148, 152, 156 Mtshali, B. Vulindlela, 68n Mugabe, Robert, 11, 59n, 163 Murray, David J., 36n, 37n, 39, 39n, 40,40n, 41 n, 43n, 44n, 45n, 47n, 48n, 54n, 55n, 98,98n, 99n, lOOn, 106n Mussett, Bruce, 157n Mussett, Jack, 127 Muzorewa, Abel, 12n, 163 National Democratic Party (NDP), 38, 46, 50 Native (Urban Areas) Accommoda­ tion and Registration Act (1946), 41 Native Labour Boards Act (1947), 41 Ndlela, Daniel Boda, 70n

240

Index

Newson, E. S. “Bob,” 110-11, Hin Nkomo, Joshua, 38,44,46, 50, 52 Northern Rhodesia, 36,41, 60, 100, 101; copperbelt, 101. See also Zam­ bia Nossal, Kim Richard, In, 4n, 5n Nyasaland, 36,41,60,100,101. See also Malawi O’Connell, B. W. S., 123 oil embargo, 2, 3,17, 60,175; and Britain, 139-43; British Order in Council, 141; and British-U.S. coop­ eration, 143-44; and British-U.S. expectations, 135-39,141-42; initial successes of, 143-45; and oil prices, 158, 160,162; and Portugal, 136-37, 140; reasons for, 142-43,161; and Rhodesia, responses of, 145,153-61; and Rhodesia, supply of, 133-34, 147-48,154-56,157-58,158n; and Rhodesian import prices, 156-57; and Rhodesian oil market, 133, 135-36; and South Africa, 133, 135-37,140,161; and transfer pric­ ing, 159; and United Nations, 140; and United States, 141; and Zambia, potential retaliation against, 137-38. See also Britain; Mozambique; Por­ tugal; Rhodesia; South Africa; United Nations; United States Olson, Mancur, 23n Olson, Richard Stuart, 4n, 5n O’Meara, Patrick, 37n open polity school, 13,20,179

Palley, Ahm, 43, 52n, 80 Palley, Claire, 45n Palliser, Sir Michael, 37 Pape, Robert, In, 2n, 3, 3n, 176n Pearce Commission, 12n, 79n, 163, 163n; and assessment of business support for settlement, 130 Pearson, D. S., 63n, 66n, 67n Pelzman, Joseph, 174n

Perry, William, 110,129 Phimister, Ian, 98n, 99n, lOOn, 102, 102n Picard, Noel, 89 Pittman, John, 45n Plewman Commission, 38,105 Porter, Richard C., 4n Portugal, and oil embargo, 136-37, 140 Powers, Gerard R., 6n

Quinton Commission, 38 Radcliff, Benjamin, 2n, 3n Renwick, Robin, 2n, 6n Report on the Supply of Petroleum and Petroleum Products to Rhode­ sia. See Bingham report Republican Alliance, 83,83n Rhodesia: and 1958 general election, 45; and 1962 general election, 51-52; and 1965 general election, 58; and 1970 general election, 83; and Britain, failure to settle with, 79; and Britain, negotiations with, 8; and economic and racial unrest, 42-43; economic development of, 40-41; and foreign exchange reserves, 109; and guerilla war, 9,163; indepen­ dence, 18, 36, 53; and land owner­ ship, patterns of, 10,11; and oil companies, government relations with, 155,159-61; and partnership era, 42,104-5; population of, 9; and race relations, 9—11, 38-39,46, 50-53, 58-59,64, 70,101-5,163-66, 167; and sanctions, domestic responses to, 7, 9; and sanctions, effects of, 8,9,75,93; and sanctions, initial, 60; and sanctions, institu­ tional responses to, 168-71; and sanctions, unifying effects of, 9, 64-65,93-95,97-98, 130-31, 164-71; and sanctions literature, 8; and settlement, potential for, 12;

Index

and white community, 18, 37; and white immigration, 43; and white politics, 6,10,19; and white unity, 7, 9-11,12,164-71. See also Britain; business community; Chimurenga war; oil embargo; Rhodesian Front; South Africa; tobacco boycott; Uni­ lateral Declaration of Independence Rhodesian Constitutional Association, 123 Rhodesian Farmer, 84 Rhodesian Front (RF), 7,9-10, 12, 38, 43,47-48, 51,52-53, 56-58, 61, 63, 80, 83-84,88,105,109-10, 168n; and 1962 general election, 53-54, 106; and 1965 general election, 60; and business community, 96-97, 111-13,127,128; and independence, attitude toward, 106; and internal conflict, 111-12; party structure, 53-54; and political opposition, 123-24,169-71; and political oppo­ sition, retaliation against, 84-85, 113-15; and political power, consoli­ dation of, 53-58; and racial polar­ ization, 59; and sanctions, goals under, 61-62; and sanctions, responses to, 167-71. See also Rhodesia Rhodesian National Farmers’ Union (RFNU), 39, 55, 66, 69, 78, 84, 85, 92,99, 166; and nationalists, 64-65. See also Rhodesia Tobacco Associa­ tion Rhodesia Party (RP), 56, 57,106; and 1965 general election, 58 Rhodesia Tobacco Association (RTA), 55,78,88-91,93-94,166,170; and government, conflict with, 78-79, 81—83, 88; and internal conflict, 89-91; and open marketing system, 67-68; and production quotas, 67; and sanctions, attitude toward, 71. See also Rhodesian National Farm­ ers’ Union

241

Ripsman, Norrin M., 2n Robinson, Sir Albert, 84 Rogowski, Ronald, 13n, 14n, 16n, 171n,179n Rosenthal, Jean-Laurent, 19n Rous, Peter, 88 Rowe, David M., 2n, 4n Rowlands, “Tiny,” 84 Salisbury Chamber of Commerce, 99 SASOL, 151,151n, 158n Schmidt, Elizabeth, 2n, 61n, 64n, 97n, 125n,163n Schott, Jeffrey J., 2n, 3, 3n, 5n, 6n, 23n, Schreiber, Anna P., 6n, 172n Schwebach, Valerie, 2n Scott, James C., 27n Seegers, Annette, 41 n, 42n, 44n, 45n, 46n,54n Serbia, sanctions against, 6,172 Shamuyarira, Nathan, 5In, 70n Shell, 133,134n, 135, 136n, 138n, 143n, 15In, 152,155,155n, 158n, 159,160; and Britain, cooperation with, 152. See also oil embargo Sithole, Ndabaningi, 38,46,50,58n, 163 Skalnes, Tor, 64n, 79n Smith, David, 82, 87,88, 89n, 90 Smith, Ian, 8,11,12,48,48n, 55, 56, 60, 80, 85, 87,111-12,127-28,143n, 163,164n; and Campbell and New­ son, 112; and Forum, 122 Smith-Home agreement (1972), 12n, 18,19, 61,79n, 112,122,130,163 South Africa, 3,98; and Britain, coun­ tersanctions against, 3,135n, 149-51,175; and Britain, relations with, 146; and oil companies, 144-48; and oil embargo, 134-37, 140,144-49; and Rhodesia, 163-64. See also Britain; oil embargo; Rhodesia; United Nations Standard Bank, 115

242

Index

Standard Oil, 133n. See also oil embargo Stedman, Stephen John, lOn, 58n, 163n, 164n,166n Strack, Harry R., 116n, 124n, 125n, 126n,127n Strong, John, 65n, 93n Sylvester, Christine, 99n, lOOn, 10In, 103n Taylor, Rosemary C. R., 20n, 26n Texaco, 133n. See also oil embargo Thomson, A. R., 102 Tiger proposals, 64, 80, 83, 84,87,112 Tiger talks, 11, 61,76,110,114; and Rhodesia, 11-12. See also Britain; Rhodesia tobacco boycott, 63, 71-73,174; and domestic political dissent, suppres­ sion of, 65,84-92,94-95; and insti­ tutional change, 65,86; responses to, 71-74 Tobacco Corporation, 73-75, 78, 84, 86-87,91,93,94,126,166,168-69; terms of reference, 73n Tobacco Corporation Act of 1966, 73-74; amended (1968), 86 tobacco exports, 33, 35, 63, 67, 69, 74, 92; and British market, concentra­ tion in, 70-71; and sanctions, effects of, 76 tobacco growers, 7, 35,174; and diversification, 79; and government, conflict with, 81-82,92; and govern­ ment retaliation, vulnerability to, 87-88; and independence, attitudes toward, 70-71; and political dissent, 64, 75, 79-81, 83, 87; political loy­ alty of, 83-95; political power of, 63, 68-70, 93; and sanctions, effects of, 63; and sanctions, profitability under, 80-84; and sanctions, responses to, 64; and settlement, support for, 80-81. See also Rhode­ sia; Rhodesian Front; tobacco boy­

cott; Tobacco Corporation; tobacco industry; white farmers tobacco industry, 17, 65-72; collapse of (1928), 66; and GDP, contribu­ tion to, 63; government intervention in, 68,86-87; and government pol­ icy, dissatisfaction with, 111; and grower prices, 74,75, 78-79, 81-82, 89,92; and input prices, 79-80; and London Agreement of 1947,67; and Rhodesia, 76-78; and sales, 109; and sanctions, institutional structure under, 75, 86-87,93-95; and sanc­ tions, marketing under, 73-74; and sanctions, production under, 75-76, 78,81-82, 86-87,89; and stockpile, 74,76,82, 88,91; and tobacco pro­ duction, government control of, 93-94, See also Rhodesia; Rhode­ sian Front; tobacco boycott; Tobacco Corporation; tobacco growers; white farmers Tobacco Levy Act, 66 Tobacco Marketing Act of 1936,66 Tobacco Marketing Board, 66, 73, 75, 86,93 tobacco merchants, 41,93; and sanc­ tions, profitability under, 91-92 Tobacco Trade Association, 66,110 Todd, Garfield, 9,10,38,45,45n, 48n, 105 Total, 14n, 133, 133n, 134n, 135,151n, 154n, 155, 158n. See also oil embargo transfer pricing, and mining industry, 120-21; oil, 159 Tregold, Sir Robert, 48n Tsebelis, George, 3n

Unilateral Declaration of Indepen­ dence (UDI), 6,8,17, 38, 56, 60, 64, 66,67,71,72,76, 77,96, 107,108, 164,169 Union Carbide, 121 United Federal Party (UFP), 39,40,

Index

243

43, 54, 55, 57, 59,64,106,178; and “Build a Nation Campaign,” 50; electoral strategy of, 44-53; multi­ racial strategy of, 49-51; and voter support, dwindling, 40 United Group, 48 United Kingdom. See Britain United Nations, 3,106; and oil embargo, 140; and Rhodesia, mandatory sanctions against, 5,6, 7, 60-61; and South Africa, sanctions against, 5. See also Britain; oil embargo; Rhodesia; South Africa United Party, 100. See also United Federal Party United States, 5; and Britain, 141-43; and Byrd Amendment, 125n, 133n; and oil embargo, 138-39,141-42; and Rhodesian mining exports, 121; and sanctions, use of, 6. See also Britain; oil embargo; Rhodesia; South Africa Univex, 121,121n Unlawful Organizations and Preven­ tive Detentions Act (1959), 46

Wells, Harry, 73 Whaley, Sam, 73 Wheeler, D. R., 143n white agriculture, 98 white business community. See busi­ ness community white farmers, 10, 53,68,103; and gov­ ernment policy, dissatisfaction with, 11; and independence, attitudes toward, 71; political strength of, 64. See also tobacco growers; tobacco industry Whitehead, Sir Edgar, 9,45, 54, 55, 69n,112,168n white labor, 10,103; and racial laws, 102; and wages, 103 Williams, Bob, 123 Wilson, Harold, 60,139-40,140n, 143n, 148, 149n, 150n, 163n Woodward, Susan, 6n, 172,172n World War II, 39,40,66,99,101 Wright, Cecil, 129 Wright, J. Oliver, 150n

Verwoerd, H. F., 148,149n, 150n; and Harold Wilson, letter to, 149,150

Zambia, 60,100; and copper exports, 138; and petroleum airlift, 138n. See also Northern Rhodesia; oil embargo Zimbabwe, 7,12; and independence, 8, 92,163; and Mugabe government, 12; and tobacco boycott, effects of, 93 Zimbabwe African National Union (ZANU), 163 Zimbabwe African People’s Union (ZAPU), 50,163

Walker, Cyril, 80 Walker, L., 146n Walker, Louis, 138n, 143,144n, 147, 147n, 151, 151n Wassnik, Darwin, 2In Weingast, Barry, 19n Weld, David, 114n Welensky, Sir Roy, 37, 55, 56, 78, 89, 166n

Yugoslavia, sanctions against, 5