Colonial extractivism and development: The state and private diamond extraction at the British Cape Colony, 1870–1910

In this paper we investigate the specific mechanisms of British financial influence in the Cape Colony during the diamond mining boom of the late nineteenth century. We do so by offering a detailed exposition of the uneasy marriage between the colonial state and private business sector in the context of the economics and dynamics of extractivism in the periphery. This allows us to encapsulate the dilemmas of attracting foreign investment whilst maintaining local autonomy, and so transcend colonial periodisation. Our study is a case study that relies on quantitative and qualitative archival evidence. The analysis reveals how the state's expenditure outlay on business enabling infrastructure was not reciprocated by proportionate fiscal contributions by the mining sector. This occurred as local elite alliances were able to direct the machinery of the state towards narrow profit maximisation and in doing so curtail any economy-wide developmental benefits which might have been associated with mineral extraction. We conceptualise this elite alliance as a “Minerals Railways Complex” as a means of encapsulating the interaction of the global financial system with colonial elite alliances and local developmental imperatives.