Eulogizing Professor Hernando De Soto’s book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, Baroness Thatcher says:

The Mystery of Capital has the potential to create a new, enormously beneficial revolution, for it addresses the single greatest source of failure in the Third World and ex-communist countries – the lack of a rule of law that upholds private property and provides a framework for enterprise. It should be compulsory reading for all in charge of the wealth of nations.

Margaret Thatcher, the former Prime Minister of Britain and Ronald Reagan, the former President of the United States, were the political pioneers of neoliberalism in the post-Cold War world. Francis Fukuyama, the author of The End of History asserts that with the triumph of capitalism and liberal democracy in the whole world, history has come to an end. He supplied the intellectual and ideological weapons for neoliberalism. Hernando De Soto, we are told the most-sought after consultant by ‘poor’ countries, supplied the mechanism for turning trillions of dollar worth of assets of the poor, what he calls ‘dead capital’, into ‘living’ capital. Unless the poor of the Third World are brought into the capitalist mainstream, the West’s capitalist civilisation is at risk, he warned. ‘In the business community of the West,’ he says, ‘there is a growing concern that the failure of most of the rest of the world to implement capitalism will eventually drive the rich economies into recession.’

The mechanism to breath life into dead capital is to construct a legal system which will enable the assets of the poor to get titles and thereby make them negotiable and salable on the market. In his ‘neoliberal revolution’, De Sotto, says, lawyers have the role of a vanguard. Let me quote him:

In this oration, I will try to give some glimpses of the role of law in Tanzania’s jump from the frying pan of state nationalism into the fire of corporate neoliberalism. First, I will give sketches of the process of accumulation of capital underlying colonial, neocolonial and neoliberal phases in the context of land and labour regimes; then I will refer to some leading labour cases paving the way towards neoliberalism and finally raise the question whether Tanzanian lawyers have been “terrorists” sabotaging neoliberalism or technicians oiling it.

Accumulation by Dispossession

Once [neoliberal] reformers have the poor and at least some of the elite on their side, it will be time to take on the public and private bureaucracy who administer and maintain the status quo – principally, the lawyers and technicians. …No group – aside from terrorists – is better positioned to sabotage capitalist expansion. And, unlike terrorists, the lawyers know how to do it legally. (Interpolation mine)

Nature did not posit people with money, property and capital on one side and people with nothing but their capacity to labour on the other. Nor did Nature ordain that there shall be the rich, powerful and privileged North and the poor, disadvantaged and servile South. The propertied and the propertyless, capitalists and proletarians, the rich and the poor, the landlord and the landless, the gargantuan plantation owner and the Lilliputian peasant-producer, the powerful and the powerless were created through human agency in a historical process.

Friday was not born a Friday. He was created by Robinson Crusoe. And a Crusoe could not have captured and tamed a Friday without a gun. The ‘savage cannibal’, as Crusoe characterized the original state of his Friday, could not have been rescued without the use of the gun. And a god-fearing Friday, as Crusoe named him, could not have been disciplined into an obedient slave without the threat of it. Friday stood in awe, astonishment and bewilderment at the gun. ‘…he would not so much as touch it for several days …; but would speak to it, and talk to it, as if it had answered him, when he was by himself; which, as I afterwards learned of him, was to desire it not to kill him.’ Eventually, Crusoe taught Friday how to handle the gun and even gave him one, but only after he had taught him the rules from the Bible not to kill and be obedient, loyal and stand by the master. In Malcom X’s memorable phrase, the field nigger had become a house nigger.

So, what is the genesis of colonial labour and capital?

Land and labour were central to the colonial project. Land and labour were central to the neo-colonial project and now they are very central to the neo-liberal project. In 1923 the colonial state passed the Master and Native Servants Ordinance. In the same year the Land Ordinance was enacted. A year earlier the Governor had enacted the Hut and Poll Tax Ordinance. The years of the enactment may be co-incidental. The logic was not. The tax law was not to raise revenue, although it also did that. It was meant to flush out labour of producers to go and work in mines and plantations; to use their muscle power by compulsion or habit, more by compulsion than habit during the early colonial times.

Every owner or occupier of a hut was liable to pay a tax prescribed by the governor. A hut was defined as ‘any hut, building, or structure of a description commonly used by natives as a dwelling.’ A native was neither a citizen nor a person. In the colonial parlance, the ‘native’ was the indigenous inhabitant of the land invaded by the colonialist, the ‘primitive Negro’ in the phraseology of Governor Byatt, the first military ruler of Tanganyika. If the native housed more than one wife in his hut, which was not uncommon, then he was liable to pay tax for each one of them. This was the tax on ‘plural wives’, as it was called.

Wanyakyusa revolted against it in 1928, and migrated to Nyasaland. During the German period, one of the main grievances of the rebels was tax; the other was land. In 1894, Macemba, the Yao chief, led a protest against tax. The protest was crushed in 1899, the chief fled to Mozambique while his followers were imprisoned. In 1902 Mpoto from Kitangari was hanged for leading a tax protest.

Where a person did not own a hut (or perhaps did not have a wife!), he was liable to pay a poll or head tax, a tax on one’s existence. ‘Every able-bodied male native of the apparent age of sixteen years or over,’ section 4 decreed, ‘… shall pay annually a poll tax of such amount as the Governor … may prescribe’. The tax had to be paid in cash. The option was to grow a cash crop for the metropolitan market or go out to labour for capital in sisal plantations of the Eastern Province, or coffee farms of the Northern Province or tobacco farms of Southern Province and Southern Highlands. These were the labour-importing areas. Western, Lake and Central Provinces were labour-exporting areas.

Every year thousands of Wanyakyusa, Wangoni, Wayao, Wamakua, Wamakonde, Wapangwa, Wabena and Wafipa from the south and south-east; Wanyamwezi and Wasukuma from the Western and Lake Provinces; and Wanyaturu, Wairamba and Wasandwe from the Central province trekked hundreds of kilometers to employment centres. These were the so-called manamba or migrant labour. Migrant because they could not afford to take their families and settle on the plantations. Manamba were given bachelor wages, bachelor rations and bachelor camps. The families were left behind to fend for themselves. So, while the man became a semi-proletarian, the woman became a semi-peasant, both subsidizing colonial capital which reaped super-profits by imposing sub-human conditions of labour.

The law permitted a ‘native’ liable to pay tax to discharge his obligation by providing equivalent amount of labour on any government undertaking or on any ‘essential public works and services authorized by the Government.’ The labour of tax-defaulters built the infrastructure of the colonial economy. ‘Hundreds of miles pf roads were cut, tens of buildings were built and maintained, dams were constructed and agriculture works carried out by the sweat and blood of … tax-defaulters’.

Under the Master and Native Servants Ordinance breach of contract was a criminal offence. The offence was called desertion. There were other offences relating to discipline, absenteeism, insulting or assaulting the employer etc. Criminal law applied to civil relations. Force dominated the economic process. State both created and maintained the labour market not through economic instruments but by instruments of violence.