This file is a short single-author polemical essay. Its scope is narrow: Rothbard addresses the mid-1980s American campaign for university divestment, embargoes, and restrictions on Krugerrands as a response to South African apartheid. The essay’s central thesis is that anti-apartheid economic coercion, however morally motivated, would injure the very black South African workers it claims to help. Rothbard frames the piece as a warning against confusing righteous intention with beneficial consequence.
I yield to no one in my abhorrence of the apartheid system, but it must never be forgotten what the road to Hell is paved with. Good intentions are scarcely enough, and we must always be careful that in trying to do good, we don’t do harm instead.
The essay proceeds by a characteristic Rothbardian move: translating a moral crusade into an incidence question. Who actually bears the costs of sanctions and disinvestment? His answer is not the South African state, nor American activists, but black workers employed by foreign firms and export industries. By reducing investment and trade, the campaign would reduce the demand for labor.
The demand for black workers in South Africa would fall, and the result would be loss of jobs and lower wage rates for the oppressed people of that country.
Rothbard emphasizes that U.S. firms are likely to be among the better-paying employers, so their withdrawal would not be a symbolic blow alone but a direct deterioration in wages and working conditions. This is the essay’s main economic argument: divestment changes the bargaining position of labor by lowering demand.
In short: the group we are most trying to help by our well-meaning intervention will be precisely the one to lose the most.
A second conceptual move concerns political representation. Rothbard attacks the rhetoric of collective sacrifice, especially claims by American anti-apartheid advocates that “we” have nothing to lose. For him, this “we” conceals the fact that the costs will fall on people who are neither consulted nor protected by the activists speaking in their name.
The profound flaw is an equivocation on the word “we,” a collective term covering a multitude of sins.
The structure of the essay is therefore both economic and moral. Rothbard first concedes the evil of apartheid, then rejects coercive economic remedies, then turns the moral accusation back onto the crusaders: their confidence depends on making others bear the sacrifice. He reinforces the point by noting that some American black leaders also feared disinvestment would harm workers, while hard-line advocates treated immediate labor costs as secondary to the symbolic struggle for freedom.
Rothbard’s positive recommendation reverses the boycott logic. Drawing an analogy to arguments against the grape boycott, he claims that those who want to help laborers should increase demand for the goods and industries that employ them. In South Africa, that means encouraging investment and trade rather than withdrawal. Yet he is careful to define this as a limited prescription, not a promise that outsiders can engineer liberation.
There is no way that we can end the apartheid system.
The essay culminates in Rothbard’s broader libertarian theory of racism and markets. Apartheid, in his account, is not the natural expression of market exchange but the product of state power: the state allows discriminatory preferences to be enforced collectively rather than punished competitively. Employers who discriminate in a free market bear costs; governments can spread those costs across society and entrench racial hierarchy.
Free-market capitalism is a marvelous antidote for racism. In a free market, employers who refuse to hire productive black workers are hurting their own profits and the competitive position of their own company. It is only when the state steps in that the government can socialize the costs of racism and establish an apartheid system.
The essay’s relevance lies in its general critique of sanctions politics and ethical-consumption campaigns. Rothbard asks readers to judge such campaigns not by the virtue of their slogans but by their likely effects on vulnerable people. His conclusion is uncompromising: capitalism, not divestment, is the force he believes most likely to erode apartheid.
The growth of capitalism in South Africa will do far more to end apartheid than the futile and counterproductive grandstanding of American liberals.
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