***Cant we just Develop without involving Political Leaders for Favors??*** Why the poor will remain poor and the rich grow richer unless we turn to Free Market Capitalism and turn away from cronyism!! Quite often, those of us who favor the free market must confront a problem. The virtues of the market, and the vices of socialism and interventionism, have been made incontestably clear by Mises, Rothbard, Hazlitt and others. The case for the free market, as these great figures explain it, can readily be grasped and demands no mysterious knowledge. Yet many academics reject the market. They condemn capitalism for leaving many in poverty and for glaring inequalities. How can so many academics fail to grasp what seem to us obvious truths? One of the reasons for this is that as Don Watkins explains in his article ““JUST WHAT IS A “MORAL CASE” FOR CAPITALISM, ANYWAY?” is that we often talk about winning the war of ideas. But this isn’t a war of ideas: it’s a war of emotions.” On this view, a “moral case” is virtually synonymous with an emotional case. The right has failed because it has focused on facts rather than emotions, while the left has done the opposite and won debate after debate. The reason the left to win; is because they tell stories and give examples that are emotionally evocative, while making sure that they show; that their policies promote fairness and help the poor. Which in all sincerity, I think the right has to adopt as well. But for me, I am quite certain that socialism and interventionism are not the biggest problem when it comes to the case of Africa. If we go beyond the day-to-day news and dig deeper we are able to see things that really point to the threat of free market capitalism in our African societies. And this is nothing far from Cronyism. Cronyism is as old as recorded human history and has always been the dominant system. This is precisely why the human race has made so little progress in overcoming poverty. To put things into perspective, let’s begin by defining what cronyism is and then lay a case for why we need free market capitalism if we are to get out of poverty. Cronyism is described as the appointment of friends and associates to positions of authority, without proper regard to their qualifications , or basically, the diversion of resources away from the needs of the people for political purposes. In other words, Cronyism is the support of political leaders in return for favors. And as Dr. Tom Palmer, executive vice president for international programs at Atlas Economic Research Foundation, Senior fellow at the Cato Institute and director of Cato University; warns, cronyism and not socialism is the greatest challenge today to free market capitalism, particularly in the African context. Could this be a larger trend or simply a passing fad? To illustrate this, I have to use examples from first-hand experience and back these up with what other academics have to say. A few weeks back, I was talking to one of the Ambassadors. And our talk was revolving around development of youth and how we could get them out of poverty. He asked me about what solutions I had, and after giving him the solutions, especially those to do with entrepreneurship, he told me that I had a great plan, but it needed funding. In his own words “ If you want, I can talk to the person in charge of making things happen, and you could get all the funding, as long as you show that you are in support of so and so; by letting your entire group of youth mobilize for him. And you know what, he will never forget you” I looked at him and in my heart, I was like, how many people will fail to make it in life just because they do not have the opportunity to talk to the high profile officials, and if they do, they then have to sell their consciences and abilities, and become richer, while the people they had actually gone to help, remain in poverty. As though this was not enough, I heard over the radio, one of the MP’s make such annoying remarks that I wish I got her name, followed up with her and let her know how much damage she had caused. In her own words, she said “I came, you voted for me, now I am rich, whether you talk, shout or do anything you want to do, I am richer than you and there is nothing you can do about it” This got me thinking, so these people (not all by the way, but majority) get there and when they know the system well enough to manipulate things, and know that even if they lose their seats, they still will have a way around with those in power; they then they start to mock, abuse, and insult the very people who put their trust in them. If this is the system that we all want, we know that the rich will remain richer and the poor, poorer. With the above examples, we see that; it is not the socialism or interventionism which is the problem, it is first and foremost a case cronyism, which has led to massive and different forms of corruption. Robert Mangoliso Sobukwe (1924 – 1978) founder and leader of the Pan African Congress (PAC) and one of the visionaries whose words and actions fed into the struggle for liberty said this “True leadership demands complete sacrifice of self, absolute honesty, integrity and uprightness of character, courage and fearlessness and above all, consuming love for one’s people.” Corruption knows no ethnic, social or economic boundaries; neither does integrity. Therefore, if the government; which the people put their trust in; is the very one making decisions through the corrupt individuals, where do we see the economy heading? How are our people going to get out of poverty? We all know that government dominance is of course bad for the economy, but it works to the benefit of a small group of the powerful. In his book Crony Capitalism in America, Lewis names names: he tells us who the predators are. “Clinton’s choice for Fannie CEO, Franklin Raines, took away $90 million in pay and stock option gains, in part because of misleading accounting practices. Obama advisor James Johnson took only $21 million. For 2009-2010, the chief executives of Fannie and Freddie got a combined $17 million, even as these organizations were being bailed out. The top six executives got $35 million over the same period.” (p. 45) An especially glaring example of a predatory partnership between government and business followed the financial collapse of 2008. It was widely alleged that massive government subsidies to prop up failing banks and investment houses were required lest the entire economy be destroyed. “So in the fall of 2008, the US supposedly stood on the edge of an abyss, with a likely shutdown of the entire financial system, and a Depression from which we might never emerge.” (pp. 110-11) (Crony Capitalism in America, 2008-2012. Hunter Lewis et al) These and many more are just a few examples of what cronyism can lead to. So what’s the solution? A Free-Market Economy. And here is why, in quoting from Economic Freedom of the World 1996 Annual Report (Fraser Institute of Canada, James Gwartney and Robert Lawson et al). Real economic freedom comes from free market capitalism through relying on the freedom of the participants in markets - which if looked at critically, has been the only difference between wealth and poverty in many countries. Individuals have economic freedom when property they acquire without the use of force, fraud, or theft is protected from physical invasions by others and they are free to use, exchange, or give their property as long as their actions do not violate the identical rights of others. An index of economic freedom should measure the extent to which rightly acquired property is protected and individuals are engaged in voluntary transactions. To further understand what free market capitalism is, we have to know that it rests entirely on the respect for property: which property has to be defined in its original classical sense and which has been so diluted in our day for us to properly understand. But even then, we need not look further as, Dr. Palmer defines it in the most simplistic way. He says, Property as in what is proper to an individual: property in ones person; in ones freedom and in ones estate Property is characterized by the three Ds: definable; defendable; and divestible (transferable). And as corollaries, capitalism requires: equality before the law; the presumption of liberty (including freedom of association and contract) and the rule of law as he goes on to highlight. Therefore, in my opinion, it is this that we need to fight against (cronyism), and this can only be done by the introduction and promotion of this seemingly strange, yet very crucial concept of a free market capitalism, without which, cronyism will still rule high and the result, an even poorer populace, and people will still keep saying, The rich are growing richer as the poor are growing poorer, yet we are the very ones promoting this vice.
Posted on: Sat, 11 Oct 2014 06:37:11 +0000
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