When
I chose the sub-title “economic theory and political economy” for my essay
on Buharism, it was with a clear purpose in mind. “Political Economy or
Economics”, wrote Alfred Marshall a very long time ago in his Principles of
Economics, “is a study of mankind in the ordinary business of life.”
Although the definition has been considerably narrowed, it seems to me evident
that no one who delves into this area can pretend to be a neutral and impartial
observer, since every one has a position in the scheme of things and everyone
has an explicit or implicit interest in what happens to mankind. Indeed I have
never written on a matter about which I am indifferent, for to do so is an
exercise in futility. As I wrote in one of my earlier articles, language is a
moral medium and writing is a means of education and exhortation aimed at
inviting the reader to act for his freedom and liberate first his consciousness,
then his person, from the obscurantist cloak of myths, superstitions and
outright fallacies invoked by those responsible for his state of alienation.
This theme runs in the writings of several intellectuals, from Marx and Trotsky,
to Sartre, Chomsky and Eco. My
intervention was not the contribution of an impartial arbiter but, as stated
clearly in the piece, an attempt to unveil the “exact locus or nexus” of the
Buhari administration in “the ebb and flow of Nigerian history”. To this
extent, that is to the extent of stating that I am not a neutral party as far as
Buharism is concerned, my
friend Mohammed Haruna is dead right in his rebuttal titled “Sanusi Lamido
Sanusi and Buharism”. Beyond
that, however, he seems to have made a number of unsubstantiated logical leaps,
which need to be pointed out as part of the process of moving the discourse
forward.
The
principal error is to confuse my clear partiality in favour of Buharism with a
glorification of Buhari the man. The economic principles and the political
ideology underpinning the Buhari government transcend Muhammadu Buhari and they
formed the kernel of my paper. It is the sad element in Mohammed’s rebuttal
that precisely when he addressed himself to the substance of my paper, the
economic theory and political economy of Buharism, he ran into logical
conundrums that left one silently bemused at what is best described as a most
eloquent articulation of incoherence in economic matters. Take for instance the
following statements: “Nigeria, Sanusi would argue, quite rightly, has since
taken its bitter pill of devaluation, but seems to be getting worse, not better.
Devaluation, therefore could not possibly be the correct prescription. But then
the problem with social behaviour is that it is impossible to predict with
certainty for the simple reason that too many variables are involved….” My
initial reaction is to wonder if Mohammed read my paper. The point was clearly
made therein that this issue had nothing to do with the unpredictability of
social behaviour. The results of devaluation in an economy with the
characteristics of the Nigerian economy were a foregone conclusion. I have
discussed the theory at length and shown that we knew, ab initio, that
things would get worse. After Buhari was overthrown, for those who remember
well, economists like Dr Ibrahim Ayagi (who braved opposition given his post as
the Chief Executive of Chase Merchant Bank), Professor Eskor Toyo, Professor Sam
Aluko, Professor Ikenna Nzimiro and Dr Bade Onimode, as well as radical
intellectuals like Dr Bala Usman, Dr Yusuf Bangura, Dr Claude Ake etc. were
vocal in their opposition to the so-called “IMF conditionalities.” Founded
on this fallacy of unpredictability is also Mohammed’s assertion that “there
are… economists who are no less patriotic than Buhari who would support the
contrary position that although devaluation may be a bitter medicine, it is
inevitable for…Nigeria, which produces little of what it consumes.” Were
this statement not coming from a writer for whom I have the most profound
respect, I would have dismissed it as the unserious ranting of a demagogue.
What, pray, is patriotic in prescribing an economic policy that is bound to
condemn the majority of the populace to great poverty and hardship, with the
only “positive” effect of handing the economy over to foreigners and
creating a very small clique of the super rich? The only rational understanding
of this statement is to say that patriotism in this context has not been
defined. Perhaps Mohammed means that these economists are as patriotic in their
loyalty to the United States, the IMF, the World Bank and Multinational
Corporations as the Ayagis and Bala Usmans are to Nigeria. But even more
objectionable, given the implicit insult to their intelligence, is the
insinuation that those who say devaluation was bad for Nigeria did so simply
because it was “good for the IMF or the World Bank”. We rejected IMF
conditionalities because they were bad for Nigeria and for Nigerians. Those who
supported them did so because they favoured international capital and a small
clique whose interest they represented. Behind the sophisticated theorisation
was a naked, violent struggle for “market share” with consequences for the
creation of wealth and affluence, as well as their concentration or diffusion
among countries and among individuals, institutions and groups within each
country.
The
final direct response to Mohammed is on his argument that we have had good
dictatorships and bad ones and that we could therefore not divine the likely
direction Nigeria would take had Buharism been pursued to its logical
conclusion. This argument is dangerous and it suggests that the article on
Buharism had supported despotism for its own sake, rather than acknowledge it as
a negative, if sometimes necessary corollary to certain policies in specific
contexts. To bring in the likes of Mobutu (Haruna may well have added Abacha) as
examples is mischievous when dealing with an administration that spent its short
life punishing those involved in precisely the kind of looting that these
tyrants were guilty of. Contrary to Mohammed’s assertion, I do not have an
“apparent blind faith in Buharism with no questions asked.” In what remains
of this intervention, I will substantiate this proposition.
The
first point I will make is that even though Buharism rejected the “big bang”
approach of what was known as “the Washington consensus” (the IMF, the World
Bank and the US Treasury) it did not pursue a regime of fixed exchange rates
(another false item in Mohammed’s paper). It argued for a gradual process that
would maximise the benefits and minimise the costs of managing a severe economic
crisis. Indeed the exchange rate between
1984 and late 1985 depreciated in a
gradual, controlled manner. The question now is this: Which, between the
gradualist approach to deregulation, liberalisation and privatisation on the one
hand and the big-bang approach would have taken Nigeria down the same path as
the “Asian tigers”? I call to witness Joseph Stiglitz, winner of the Nobel
prize for economics in 2001 and until January 2000 Chief Economist at the World
Bank. I will quote at length, because of its lucidity, a passage from a book he
published this year, Globalization and its Discontents (p. 92):
“There
were problems in the way the Asian economies developed, but overall, the
governments had devised a strategy that worked….which had
but one item in common with Washington consensus policies- the importance
of macrostability. As in the Washington Consensus (hereafter WC- my
abbreviation, not Stiglitz’s) trade was important but the emphasis was on
promoting exports, not removing impediments to imports. Trade was eventually
liberalized but only gradually as new jobs were created in the export
industries. While the WC…emphasized rapid financial and capital market
liberalisation, the East Asian countries liberalised only gradually….While the
WC….emphasized privatisation, government at the national and local levels
helped create efficient enterprises that played a key role in the success of
several of the countries. In the WC view, industrial policies in which
governments try to shape the future direction of the economy are a mistake. But
the East Asian governments took that as one of their central
responsibilities….While the WC policies paid little attention to inequality,
the East Asian countries did, believing that
(this was) important for maintaining social cohesion, and that social
cohesion was necessary to provide a climate favourable to investment and
growth…Most broadly, while the WC emphasized a minimalist role for government,
in East Asia, governments helped shape and direct markets.”
Thus
while it is fair to compare Nigeria under Buhari to Singapore under Lee or
Indonesia under Sukarno, it is those governments that came after him that are
comparable to Zaire under Mobutu or Indonesia under Suharto. The issue is not
the fact of authoritarianism, but authoritarianism in pursuit of what? The
parallel drawn by Mohammed is a mischievous attempt at reducing all
dictatorships to one common denominator, thus creating a false moral equivalence
between one regime and the next.
There
is a second line of argument that will reveal to us the true nature of the
Harunaesque “patriotism”. Events since 1985, not just in Nigeria but
also in other nations, have shown that those who stood firm against the
Washington Consensus were the true patriots everywhere. When the British
financial markets were deregulated in 1986 under Thatcher this was presented as
their opportunity to “compete and win in the global market”. By the close of
the century the last of the UK’s major financial players was in foreign hands.
Mohammed Haruna should read a book, The Death of Gentlemanly Capitalism,
written by Philip Augar, one of the City’s top brokers, for an analysis of how
this happened. It is not for nothing that from Washington to Prague to Nice to
Quebec to Gothenberg and to Genoa the anti-globalization movement has staged
protests and engaged in violent riots. In her book, The Silent Takeover:
Global capitalism and the Death of Democracy, Cambridge don Noreena Hertz
makes the following frightening revelation: “ Propelled by government policies
of privatisation, deregulation and trade liberalisation… in the past twenty
years a power shift has taken place. The hundred largest multinational
corporations now control about 20% of global foreign assets; fifty-one of the
hundred biggest economies in the world are now corporations. Only fourty-nine
are nation-states. The sales of General Motors and Ford are greater than the GDP
of the whole of sub-Saharan Africa; the assets of IBM, BP and General Electric
outstrip the economic capabilities of most small nations; and Wal-Mart, the US
supermarket retailer, has higher revenues than most Central and Eastern European
states including Poland, the Czech Republic, Ukraine, Hungary and Slovakia.”
(p.8) In other words we have all become “banana republics”, courtesy of our
“patriotic” economists.
At
the heart of the problem is the emergence, in Africa, of a crop of
“intellectuals” who are the heirs to the old colonised minds. These are not
just persons with a bougeoisified intellect. They have lost all originality in
thinking and all critical ability because their minds have become standardised
and commodified by the ideology of the market. Everywhere you turn you see them
preaching the beauty of the market, of efficiency, liberalisation, private
sector and privatisation, deregulation etc. These are concepts which they do not
understand and whose roots and implications they have not studied. They do not
ask how we can stop public sector corruption or make government more efficient
and accountable. These anomalies are presented as necessary to all government
and used as a pretext to strip the people of owned assets. “Privatisation”
is not about the private sector creating new assets by investing in the economy
but about selling to private persons assets belonging to the state at a price
they deem “fair”. One of the world’s foremost fund managers, George Soros,
wrote this about markets in his latest book, Globalization: “Markets
are amoral: they allow people to act in accordance with their interests but they
pass no moral judgement on the interests themselves. Yet society cannot function
without some distinction between right and wrong”. This simple truth, now
resounding from the very heart of global capital, is still not present in our
discourse.
Let
me illustrate with a simple example I used often in my teaching days. The
economist tells us that the price of food, for example, should be determined by
the forces of demand and supply. The “equilibrium price” is that at which
demand and supply are equated and the market is cleared. This is the market’s
much touted “efficiency” and any other price comes with problems. This is
taught as part of “positive economics”, a mythical discipline that pretends
to be value-free social science. What the economist does not tell us is the
following: The segment of the demand curve below and to the right of its
intersection with the supply curve represents millions of poor consumers who are
priced out of the market because they cannot afford to pay the “equilibrium
price”. Also, the entire segment
of the supply curve above and to the right of the intersection represents
thousands of poor farmers who are priced out of the market because they cannot
afford to produce food and sell profitably at that price. For a consumer to be
in the market he must afford the market price. For a producer to sell his crops
profitably he must have economy of scale. A subsidy in this market, say on
fertilizers, will lower the production cost of farmers and allow some more into
the market. In technical terms the supply curve shifts to the right leading to a
reduction in price of food and bringing in poor consumers. But the economist
will tell you: “Subsidies are bad.” The Harunaesque economist, that
is. The implication of this of course is that the poor and hungry do not matter,
and that the state should not bear the cost of reducing hunger. It is an ethical
question in which value judgement comes into play, making exposing the fallacy
of the positivist claims of objectivity. In the US and Europe the governments
are spending billions of dollars in subsidy to agriculture, keeping farmers in
business and making food cheap. In Nigeria our patriots tell us subsidies are
bad. The US only recently introduced heavy import tariffs to protect the
inefficient domestic steel industry and save jobs, in flagrant disregard of all
the principles and agreements on trade liberalisation. In Nigeria, based on the
advice of “patriotic” economists we have in the 2002 budget proposed a
reduction in the excise duty on beer from the meagre 40k to 20k. It is
through analysis of who stands to benefit from particular economic policies that
the true ideological character of Mohammed Haruna and his group of
“patriotic” economists (and rulers) emerges.
In
conclusion, the economist J.K. Galbraith once wrote that there is no economic
theory that cannot be explained in intelligible English to the non-economist.
The greatest economists have always asked themselves: How does economics affect
my people? In the early 20th century, what became known as Keynesian
Economics was actually anticipated and implemented in Sweden even before the
publication of Keynes’ General Theory. A group of economists, starting
with Wicksell and continuing through the likes of Gunnar Myrdal, Bertil Ohlin,
Erik Lindahl, Erik Lundberg and Dag Hammarskjold challenged Say’s Law and
helped create the first welfare state in the capitalist world. These economists
of the Swedish school, according to Galbraith in his A History of Economics
had one thing in common: “With a knowledge of the relevant theory and a strong
resistance to its constraints, they all addressed themselves to the practical
problems of the Swedish economy, society and polity.” Ultimately, this is the
yardstick for defining a patriot. Buharism was, in its time, a patriotic
ideology. But as a world-view, it goes beyond Buhari the man and his political
ambitions, and I have stated my position on that. But perhaps Buhari’s (and
any leader’s) relevance, should be determined by reference to Buharism and his
commitment to it.
We should, finally, state that Mohammed Haruna has given us the best possible conclusion, He wrote:” Now that he has intervened with the right emphasis on the issues rather than on the personalities involved, hopefully the debate, not just about Buhari’s entry in politics but the debate about the coming elections will move away from who the key actors are to what they can do to eliminate the country’s poverty and its divisions.” I rest my case.