Ship traffic and the economy of the Cape Colony: 1652-1793

20 September 2012
Publication Type: Working Paper
JEL Code: N37

Most historians regard the Cape Colony of the seventeenth and eighteenth centuries as an impoverished and destitute settlement, primarily because of the many restrictions and prohibitions enforced by the Dutch East India Company, who founded the Cape settlement as a refreshment station for its ships. The mercantilist thinking of the time ensured that the free burghers in the Cape were to comply with the demands of the Company, dependent on the number of passing ships, for a market, and with little economic incentive to expand production. This assumption of poor economic performance only came to be challenged in the late 1980s. Using new data collected from the so-called opgaaf rolls (tax return records) in The Hague, Van Duin and Ross (1987) argue that, in fact, the Cape economy grew significantly throughout the eighteenth century. However, these authors emphasise that local demand played the dominant role in the development of the economy and dismiss the traditional argument that passing ships were essential to the welfare of the Cape Colony. Using new empirical evidence on the number of ships in Table Bay combined with techniques from business cycle theory, this paper tests whether ship traffic had any significant relationship with agricultural production in the Cape Colony and, if so, the direction and size of association. The results suggest a strong systematic co-movement between wheat and ship traffic in Table Bay, with less evidence for wine production and stock herding activities.

Series title: Working Paper 089
1 August 2008
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