Kaffirs

What Is Kaffirs?

"Kaffirs" is a historical and now highly offensive slang term used in financial markets, primarily during the 19th and 20th centuries, to refer specifically to South African gold mining shares that traded predominantly on the London Stock Exchange. While historically a descriptor within the domain of financial markets, the word "Kaffir" itself is a deeply derogatory racial slur in South Africa and its use is considered hate speech under South African law. Due to its profoundly offensive nature, the term "Kaffirs" is no longer used in reputable financial discourse.

History and Origin

The financial term "Kaffirs" emerged during the South African gold rush in the late 19th century, coinciding with the establishment of the Johannesburg Stock Exchange (JSE) in 1887.²²,²¹,²⁰ As gold mining companies proliferated and sought capital, their shares became a significant investment, particularly for European investors. The term "Kaffirs" became a shorthand to refer to these specific South African gold mining equities trading on exchanges like the London Stock Exchange.¹⁹

However, the word "Kaffir" has a much older and far more sinister origin. It derives from the Arabic word "kāfir," meaning "disbeliever" or "non-believer," and was initially used by Muslims to describe non-Muslims. ¹⁷, ¹⁸Over centuries, particularly from the 17th century onwards, European colonialists adopted variants of this term to refer to Black African people, especially in Southern Africa. ¹⁵, ¹⁶By the mid-20th century, and explicitly during the Apartheid era in South Africa (1948-1994), "Kaffir" became an extremely offensive and demeaning racial slur, comparable to the "N-word" in North America. ¹³, ¹⁴Its usage was, and remains, associated with efforts to dehumanize Black Africans. The South African Human Rights Commission has reconfirmed that the use of "the 'k-word' is unlawful" and constitutes hate speech, often leading to legal action and penalties.,^{12 11}This offensive resonance is why the financial usage of "Kaffirs" has been entirely abandoned.

Key Takeaways

• "Kaffirs" was a historical, informal, and now highly offensive slang term for South African gold mining shares.
• The term is rooted in a deeply derogatory racial slur used against Black Africans, particularly during and after the Apartheid era.
• Its use is considered hate speech under current South African law.
• Reputable financial institutions and publications no longer use the term due to its offensive connotations.
• These shares were historically a way for investors to gain exposure to gold mining and the South African economy.

Interpreting the Term

Historically, when the term "Kaffirs" was used in financial contexts, it denoted an investment in the burgeoning South African gold industry. These shares were often viewed as a proxy for the price of gold itself, given South Africa's prominence as a gold producer. Investors would interpret the performance of "Kaffirs" as an indicator of the profitability of gold extraction and the broader economic conditions in South Africa. An increase in the value of "Kaffirs" would suggest positive sentiment toward gold prices or the South African equity market at the time, while a decline would indicate the opposite. However, this interpretation is purely historical, as the term itself is no longer in use.

Hypothetical Example

Imagine it is the early 1970s, and an investor in London is looking to gain exposure to the gold market. Instead of directly buying physical gold, they might have considered investing in "Kaffirs." For instance, if Company XYZ was a major gold producer listed on the Johannesburg Stock Exchange and its shares were traded in London, an investor might purchase 1,000 "Kaffirs" (meaning 1,000 shares of Company XYZ). If the price of gold increased, and Company XYZ's mining operations were profitable, the value of these "Kaffirs" might rise, leading to capital gains for the investor, in addition to potential dividends. This historical scenario highlights how the term was used to refer to specific South African mining financial instruments.

Practical Applications

The practical application of the term "Kaffirs" is now purely historical. In the past, these shares would have been a significant component for investors seeking exposure to emerging markets or commodities, particularly gold, through the Johannesburg Stock Exchange (JSE). These shares were traded on various stock exchanges and were often included in broader investment portfolio strategies that sought to leverage South Africa's rich natural resources.

Today, investors seeking exposure to South African markets or gold mining companies would invest in "South African equities" or "gold mining stocks" and would explicitly avoid the term "Kaffirs." South Africa continues to have a developed financial sector with deep and well-regulated capital markets, attracting foreign direct investment in various sectors beyond just mining.
¹⁰

Limitations and Criticisms

The primary and most significant limitation and criticism of the term "Kaffirs" is its intrinsic connection to a deeply offensive and racist slur. Its usage normalizes a word historically employed to dehumanize Black Africans, especially during the oppressive Apartheid regime. The financial slang for South African gold mining shares appropriated a term that became synonymous with systemic discrimination and racial hatred.
⁹
The economic system under Apartheid enforced strict racial segregation and control over resources and labor, which had long-term negative effects on South Africa's economic structure, perpetuating inequality and limiting opportunities for Black communities.,⁸,⁷ While South Africa experienced economic growth during this period, it came at the cost of profound social and economic stratification.,^{6 5}The term "Kaffirs" in finance is a relic of an era marked by this institutionalized racism. The Governmental Accounting Standards Board (GASB) in the U.S., for instance, even considered renaming the Comprehensive Annual Financial Report (CAFR) because its acronym, pronounced "KAFF-ur," sounded like the offensive term, highlighting its widespread recognition as a slur. ⁴Its continued use, even if historically for financial instruments, contributes to the perpetuation of racial insensitivity and undermines efforts towards equality and reconciliation. For these reasons, the term is strictly avoided in modern, ethical financial discourse.

Kaffirs vs. Equities

The distinction between "Kaffirs" and "equities" lies in specificity, historical context, and offensiveness.

While "Kaffirs" were a type of equity, the term itself carried a loaded and derogatory meaning that is entirely absent from the neutral, universal concept of equities. Equities represent proportional ownership in a company, granting shareholders claims on assets and earnings, and often voting rights.,^{3 2}The term "equities" is fundamental to portfolio theory and risk management, whereas "Kaffirs" solely refers to a defunct, problematic category.

FAQs

Why is the term "Kaffirs" offensive?

The term "Kaffirs" is deeply offensive because it is a historical racial slur used in South Africa to demean and dehumanize Black African people, particularly during the Apartheid era. Its use is legally prohibited in South Africa as hate speech.
¹

Is "Kaffirs" still used in financial markets today?

No, the term "Kaffirs" is no longer used in reputable financial markets or publications due to its highly offensive and derogatory nature. Its use is considered unacceptable and is actively avoided.

What are modern investors called who invest in South African gold mining companies?

Modern investors investing in South African gold mining companies simply refer to them as "South African gold mining shares" or "South African mining stocks." They are a segment of the broader South African stock market.

Can I invest in South African gold mining companies today?

Yes, you can still invest in South African gold mining companies. These companies are listed on the Johannesburg Stock Exchange (JSE) and may also have listings on other international exchanges. Investors can access these through standard brokerage accounts, just like any other listed company or market capitalization.

What is the broader financial category to which "Kaffirs" belonged?

"Kaffirs" belonged to the broader financial category of investment instruments, specifically equities or shares, traded within the context of financial markets.