A choice between the radical left or capitalist right

A choice between the radical left or capitalist right

Now that the elections are over and the country is about to enter into a coalition government for the first time; South Africa will in 14 days find out on what type of government will rule the country. Will the ANC go left to socialism and communism, or go right to capitalism? Let’s survey both.

Capitalism in Africa                                                                                 

The ANC has reached a cross-road and all eyes are on the liberation party to see which direction it will take. Business has come out arguing that should the ANC go left, to work with the likes of EFF and MK Party, it will only result into disaster and that going right towards the DA is a better and safer option for the economy of the country and markets also favor an ANC/DA coalition.

However, one may ask, has capitalism ever been good for Africa? According to Dr Njeri Mwagiru, a senior futurist at the Institute for Futures Research (IFR), based at the University of Stellenbosch Business School (USB); capitalism in Africa has been corrosive and led to the exploitation of its natural resources and people.

Mwagiru argues that capitalism has brought about a disproportionate distribution of wealth and income; it benefits the few elite and disregards the rest bringing about two economic classes, the poor and the rich, those who serve and those who are served.

Africa has taken a subservient posture in capitalism; the global economy, mostly from the west comes into Africa and extracts its natural resources and ship them off to Europe where they will be developed, processed into finished goods and sold back to Africa, a continent that has a population of over 1.2 billion making it one of the largest markets in the world.

This approach cuts out Africa from benefiting from the value chain of processing raw material into finished products. It takes away the multiplier effect that grows the economy and turns Africa into a consumer.

Capitalist imperialism thrives in an economy whereby its fiscal policies are lax and in countries that lack ambition of self-actualisation.

Melton Friedman from the University of Chicago who held a monetarist view; argued in favor of capitalism saying it is best for government to keep its hands off policies because they do more harm than good. He argues that the sole function of business is to make profit even at the expense of employment; business must run as it please without restraint or interference from government.

Friedman argues that government must keep its hands off the economy, even in areas such as income tax policies, agricultural subsidies, public housing and many other government regulations which do more harm to macro-economics.

In a recent television interview, Helen Zille said the DA is for a free market economy and the party would allow businesses to determine what they will pay their employees and remove the minimum wage bill. She said the laws in South Africa are an impediment to businesses to employ and to fire people at will and that has to go. In typical naïve relativism; she said the government cannot decide for business nor for employees, the business makes an offer, if the person likes it, they take the salary on offer or walk away if they don’t. Government cannot decide for either parties.

Socialism and communism

In his book, The General Theory of Employment, Interest and Money (1936) the English Economist John Maynard Keynes argues in discord to Friedman’s argument, instead, he says the intervention of government in policies and regulations provides more stability and is beneficial to an economy of a country. He says where government is involved, the economy grows in a meaningful manner and unemployment is reduced drastically.

The focus is on the people of the state and their well-being rather than profit. In a country where the government is involved, investing into the economy, having good fiscal policies, the business cycle is smooth. Government spending in infrastructure can boost the economy.

Mwagiru says the current capitalism in Africa needs to take a different shape; she alluded to Afri-capitalism, a word coined by Nigerian banker Tony Elumelu; she says this kind of capitalism is concerned about its people; it puts them at the center and as beneficiaries of their resources.

It takes the form socialism, putting Africans first rather than profit. She argues that Afri-capitalism requires effective coordination between business, government, and civil society, meeting market demands and collective human needs, rather than driving only self-interest.

With government involved in Afri-capitalism Mwagiru says it encourages entrepreneurs and corporations. This form involves everyone in building the economy, the private sector; donor countries and humanitarian organizations also are part of the economy.

A socialist communist government is concerned with the better good of all and a growing economy that benefits its citizens. It is concerned about an equal society rather creating disparity of economic classes within a country.

Though there is much scare of an ANC, EFF and MK coalition government because they are hard left political parties and talk about the expropriation of land without compensation and nationalisation, the leader of the EFF explained it by saying; it does not mean that people will be removed from their land, rather, the unused land will be taken and be given to those who will use it; thus creating a balance on land ownership and economic development.

He explained that nationalization, simply means the state will start its own companies and compete with the private sector; no business will be shut down under their rule.

At the end of the day, the ANC will have to decide which way to go; you can decide for yourself which option is better, the left or the right.


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