Resources report/Book reviews

been caught in a squeeze because of measures which, although intended primarily for the energy sector, affected the mining sector as well. In future, therefore, it will be important for

governments to be mindful of the very real differences in the sectors and the varying policy requirements of each, especially in such important areas as foreign investment and taxation. The

appointment by the federal govem- ment of a Minister of State (Mines) within the Department of Energy, Mines and Resources should do much

to ensure that these and other require-

ments specific to the mining sector are fully recognized.

The economic health of the mineral industry is heavily dependent on forces beyond Canadian borders, especially international mineral markets. Taxa- tion is one of the key variables that governments control. They must be sensitive to the effects of overly zealous taxation policies on industry profit- ability and the psychological environ- ment for investors.

Debate about tax levels, federal and provincial revenue-sharing and the philosophical difference between taxes

Book reviews African mining -economic underdevelopment? AFRICA UNDERMINED A History of the Mining Companies and the Underdevelopment of Africa

dy G. Lanning and M. Mueller

Penguin, Harmon&worth, UK, 1979, 59 lpp, f-3.50.

AFRICANISATION, NATIONALISATION AND INEQUALITY Mining Labour and the Copperbelt in Zambian Development

by Philip Daniel

Cambridge University Press, Cam- bridge, UK, l979,202pp, f5.95

The most obvious features of Africa

Undermined are its encyclopaedic scale and its ambitious scope. The general index lists around 30 countries of sub- Saharan Africa from Angola to Zim- babwe, and a similar number of min- erals from alumina to zinc. The ‘Company and Mine Index’ lists indi- vidual mines from Akjoujt to Zandpan and nearly 400 companies. The histo- rical coverage runs from 43000 BC almost up to the present and the whole volume consists of nearly 600 pages.

The reader is left with the impression of the authors struggling earnestly, but often unsuccessfully, under the sheer weight of their source material.

This failure to achieve a coherent and readable synthesis of their material shows itself in several ways. We find. for instance, that the same points

reappear in almost the same words in different chapters. In at least three different chapters (1,3, and 8) we are told that the British South Africa Com- pany encouraged the settlement of Rhodesia by white immigrants in order to raise the value of the Company’s investments in land and railways.

The lack of synthesis is also revealed by the use of statistics in the book. It seems that every available statistic has been thrown in-either in one of the 38 tables included or, less attractively, in one of the many passages of text which exist purely as vehicles for reciting figures,

The nature of the book is therefore such that it should be regarded as one to be used and consulted rather than to be read. That being so, its value must be judged by its content rather than by its presentation and in particular by the accuracy of its facts and the objectivity of its judgments. We do not think it is possible to give any overall judgment about veracity which would accord with

and royalties will inevitably continue. but all these are secondary to the esse~r- tial point: to remain internationally competitive the Canadian mining industry has to be taxed reasonably and fairly, otherwise exploration and

development will falter. The requisite new investment will not be made, and mining capital will go elsewhere.

John L. Bonus

The Mining Association of Canada Suite 750,350 Sparks St

Ottawa, Ontario KlR 7% Canada

every reader’s experience; each reader will judge the accuracy of the facts by reference to those areas which he knows

best. In this context even trivial errors can be disturbing if they are ‘close to home’. The present reviewers, for in- stance, were unsettled to find that the group of economists (in the Common- wealth Secretariat) to which they belong is wrongly attributed on page 560 to the Commonwealth Institute.

Lack of development

Of greater importance are the ques- tions of judgment. Single-minded enthusiasm for a theme - that mining companies have consistently acted so as to prevent development of African economies - is acceptable only up to a point in a work of this sort. The book certainly provides ample indication that, by modem liberal standards. a great deal of corporate behaviour during this period must be judged to be repellent. But only a more analytical inquiry could establish satisfactorily that the observable lack of develop- ment in African economies results mainly from the activities of mining companies. Many of the ‘correlations which are established anecdotally and claimed to show causality can. in fact, sustain quite different interpretations.

It is right to be concerned with such issues as the rate of production for export of exhaustible resources and the dangers in dealing with subsidiaries of vertically integrated corporations: and

60 RESOURCES POLICY March 1981

no doubt it is true that ‘the develop- mental needs of Africa are likely to be a long way down any company’s list of priorities’. But the authors do not con- sider explicitly whether specialized mineral development may not be better than no development at all. If they had, their assessment of the recent exper- ience of Botswana (curiously hidden away in a chapter entitled ‘Relations between the Mining Groups’) might not have been so extraordinarily negative.

Indeed, this latter section, both in its overall balance and in its specific state- ments raises serious doubts about the judgment of the authors. Few informed observers would support the statement that ‘The level of tax payments will be determined by the company’s mining and accounting policies over which the government has little or no control’. Similarly, if the authors really believe that ‘Henceforth, control of Botswana’s economy lies . in the boardrooms of

Anglo American . . . and of Amax’, it must be supposed that their passion has, in this section at least, distorted their perception of the realities.

Dependence on copper Chapter 9 of Africa Undermined entitled ‘Copper, Labour and Under- development’ may serve as a back- ground to Philip Daniel’s book, which despite its title, is a study strictly on industrial relations in the Zambian Copperbelt. The book takes over from where Elena Berger left off in her study, Labour, Race and Colonial Rule _ The Copperbelt from 1924 to Inde- pendence (Clarendon Press, Oxford, 1974), and covers the period from the approach of Zambian independence in 1964 to 1975. Like Berger’s book, it deals with the impact of unionization, Zambianization and nationalization on working conditions in the Copperbelt.

The first two chapters introduce the reader to the Zambian economy, em- phasizing its heavy dependence on copper despite post-independence measures to diversity. The copper industry, which developed as a foreign controlled enclave, has been a Robert- sonian ‘engine of growth’, but along- side has produced an economy char- acterized by a slow-growing subsistence sector coexisting with an unstable but

fast-growing copper export sector. This

dualism, Daniel says, has produced the principal income inequalities in the

country - between black and white workers, between urban and rural dwellers, and between varying degrees of skill levels. The subsequent chapters attempt to provide evidence for this inequality, highlighting the familiar conflict between growth and distribu- tional objectives.

Like all researchers of the Zambian economy, Daniel faces the problem of the paucity of statistical data, and often he has to use different data points for tables, making comparisons difficult. Nevertheless he is able to bring out some of the inequalities in terms of productivity, income distribution and wages. In matters of income distribu- tion, however, Daniel’s analysis is less thorough than the recent one by James Fry, Employment and Income Distribu- tion in the African Economy (Croom

Helm, London, 1979), which has several chapters relating to Zambia.

In Chapters 3 and 5, Daniel looks into the dilemma of the ‘ladder or escalator’, where companies preferred a policy of providing a ladder on which Africans can climb as more become qualified, while the African Mine- workers’ Union were going for a strategy that would give higher incomes to all its members, and not a selected few. The workings of this conflict is shown in the context of nationalization and Zambianization. These two chap- ters are the best in the book. Chapter 4

Book reviews

is patchy, and spreads itself thinly on

too many issues without doing justice to any. These issues include prices,

labour intensity, costs, payroll struc- ture and several others.

Chapter 6 and 7 deal with the supply and demand of labour, but Daniel lacks rigour in defining basic economic terms, such as supply and demand for labour, internal labour markets and elasticity, which are often used very loosely. Even the regression analysis to explain changes in earnings on non- mining industries in terms of those in mining industries is, theoretically

speaking, ad hoc, and neglects other important variables such as output, capital and technology and the general price level.

The conclusions centre on proposals to mitigate the inequalities, including exchange rate stability, a stabilization fund for minerals and public expendi- ture directed at lower income groups. None of these proposals is unfamiliar. All in all, Daniel’s study may not satisfy the meticulous scholar (it even lacks a bibliography), but, there is enough of substance and interest in it to make it a welcome addition to the literature on Zambian development.

Peter Freeman Raj Kumar

Technical Assistance Group Commonwealth Secretariat

London, UK

US materials investments - government-company relations DEFENDING THE NATIONAL INTEREST Raw Materials Investments and US Foreign Policy

by Stephen D. Krasner

Princeton University Press, Princeton, NJ, USA, and Guildford, UK, 1978,

475PP

This is an important and stimulating study of the relationships between the US government and US multinational

firms in the raw materials field in the 20th Century. Mr Krasner analyses 15 case studies which explore the attitudes of the US government to multination- als investing abroad and to a variety of attacks on these investments from host states. He then uses his case study find- ings to demonstrate that the behaviour of the US government is more easily understood from a statist standpoint (ie the public interest prevails over the private), than from a liberal or marxist one which would suggest that private groups and firms could use govem-

RESOURCES POLICY March 1981 61