William Harold Hutt was a renowned economist from Britain who came to work in South Africa at the University of Cape Town in 1928. He became dean of the Faculty of Commerce in 1931. His best-known contribution to South African liberal economics was his book The Economics of the Colour Bar in 1964, which addressed the economics of Apartheid (see also Hutt 1975).
Hutt had always been an opponent of racial discrimination by the state in South Africa, even before the National Party won the 1948 election and implemented its Apartheid policy. In 1937, Hutt warned of the coming threat to the entrenched clauses of the 1910 Constitution, a threat that was realized in the 1950s during the constitutional crisis. The entrenched clauses had protected the equality of the English and Afrikaans languages, as well as the non-racial but qualified franchise in the Cape Province. In 1961, when South Africa was to become an independent republic outside the British Commonwealth, Hutt argued that all South Africans should be offered British citizenship (Hutt 1964, 6–7).
Hutt described Apartheid as an economic injustice, that is, “any policy or action which is intended to perpetuate the inferiority of material standards or status of any racial group” (Hutt 1964, 9). According to Hutt, Apartheid South Africa was characterized by two opposing forces. The first force—the free market—tended to liberate non-whites from coercion and subservience, and the second force—interventionism—tended to subjugate them (ibid., 173). Unchecked state power, wrote Hutt, “deliberately or unintendedly, patently or deviously” represses politically vulnerable groups (174). In South Africa, Apartheid was not a “truly free enterprise” system, but instead a state-directed economy, where the spontaneous order of the market was “replaced by planning with political objectives” (177).
Hutt argued that the elimination of racial discrimination in state policy was not going to solve South Africa’s problem with authoritarianism. In the context of South Africa having had parliamentary sovereignty as opposed to constitutional supremacy, Hutt wrote: “Universal suffrage would merely mean the transfer of power to a new political majority, with no constitutional limitations to prevent retaliatory abuse” (1964, 178). Instead, South Africa needed to adopt the political philosophy of liberalism. “The rule of law,” wrote Hutt, “must be a rule of non-discrimination and a rule, therefore, of limited state intervention in the sphere of markets and free contract” (ibid., 179).