Capitalism is not possible without Money. So, why Africans who don’t have money want capitalism?
Opening Africans countries to capitalism would be comparable to mindless Chickens calling upon a band of Hyenas for a competition in a free market where no one will intervene between both parties.
When Tanzania got its independence from the British on December 9, 1961; Julius Nyerere, the first President of the country, envisioned an independent Tanzania which is not depend on foreign capital, but would rather leverage socialism and industrialization for what he called Ujamaa, a Swahili term meaning family hood.
In February 1965, Julius Nyerere visited China and was amazed by Chinese socialism, and the leadership of Mao Zedong. Just afterward Nyerere introduced a policy of collectivisation in the country’s agricultural system, and in 1967, folowing massive nationalizations he transformed the government into the largest employer in the country. The state expanded rapidly into virtually every sector, and was involved in everything from retailing to import-export trade and even baking.
Soon after, like in USSR and China, Corruption became rampant, productivity dropped, revolts erupted, and slowly like in China and USRR the State became more and more violent, regardless of the progress made in the sectors of education and health.
If history has to retain anything as broad conclusion, it would say Tanzania failed, while China in the end succeeded. But Why?
After Mao’s death in 1976, his successor Deng Xiaoping led China towards a market economy, but with a unique and profound understanding of capitalism never again matched by any modern leader of our time.
It’s that powerful understanding which is the purpose of my post of today.
1. Capitalism is not an economical system, it’s a political one
For Deng Xiaoping and his Eight Elders capitalism is first all a social class tool to exploit and dominate other social classes in any society, and by extension it’s the perfect tools for Western imperialist countries to exploit less developed countries and erect themselves as a class of noble and privileged countries.
The main conclusion the Chinese made by the years 1980s is this: Our priority if first to free our country from foreign domination, therefore we have to understand capitalism and like in the perfect Chinese philosophy “use the force of the enemy to beat him“.
2. Capitalism is not possible without money, therefore we have first to accumulate money
The most important insight the Chinese leaders got at this early stage is that in “undeveloped” countries only the state has the means and power to accumulate rapidly enough money to kick start a capitalist society.
Therefore the government became the first provider of capital for world class state companies. The main purpose of the State in that direction was to accumulate enough money to incentive factories building, infrastructure constructions, etc. trough free market enterprise and special zones initiatives.
Side note to the naive africans: Regardless of what you think about capitalism, in Israel, the Jews’ state, the government controls directly and indirectly about 75% of the whole country economy assets through state investment. Startups get 85% of their seed fund from the government and the remainder 25% comes from private funds. Israel situation is very similar to Finland where the state is heavily involved in startups funding, and surprisingly Finnish Tech sector exports now represents 21% of Finland export.
3. Capitalism is not possible without stealing, so we have to learn how to steal
China didn’t have all the technology needed to jump start its industrialization. So stealing western technology through a sophisticated network of state sponsored technology theft was put into place. And it worked successfully.
According Gen. Keith B. Alexander, the director of the National Security Agency, the Chinese theft of proprietary data from United States companies in sectors including defense, technology, aerospace, oil and gas, represents the “greatest transfer of wealth in history.”
There is a lesson for African countries here: Don’t expect other nations to transfer their technology and knowledge to you though humanitarian programs. It won’t happen. Before Chinese, Russian and Japanese paved their way to high technology through organized economical and industrial espionage. The myth of friendly transfer of technology is still holding Africans in the starting block.
4. Capitalism is not a private system, it’s an extension of the State power, disguised as private
Capitalism is a state instrument. It’s by default a national(ist) tool for capturing and redistributing limited resource. Without a state, there is no capitalism. So the state has to take a first role in its emergence, or it’ll never emerge.
Like in the USA, in Israel, in Finland, the Chinese government plays a hand holding role for it’s national champions providing education, network, access to technology, diplomacy, money, but furthermore in defining the overall National economic policy.
5. Capitalism prosper with wars, so let’s spare ourselves by lending to the most dominant world power
World powers need money mainly for wars. And when they need money they go to war. Chinese has learned it the hard way from the Mongols and the Europeans.
They know that the only thing that could stop them from becoming a strong nation is another western war against them, so following Genghis Khan words “Europeans love more Money than their God”, Chinese in the most pragmatic way go put their money in the United states treasure buying up to 1.1 trillions of American debt.
This very tactical move gave enough time to Chinese to build themselves up, and now they stand tall. Foreign Aggression and predation is enemy number one of the development of any Nation.
6. Frugality and “Head down” philosophy
When Julius Nyerere was back from China in 1965, he wrote this:
“I learned one very important thing. China is a huge country, with a population of more than six hundred million people. And the Chinese Government is one of those which is making money and technicians available to Tanzania to help us with our addressed the nation in the Development Plan. But they are able to do this only because they are a frugal people; they husband their resources very carefully indeed, and only spend money on things which are absolutely essential. This is true both of individuals and of the Government. There are hardly any private cars in China; people go to work by bus or on bicycles. The Government officials too, use cars only when it is really necessary for their job-and then the cars are small and cheap ones.”
The government used national pride, played on Chinese ancestral culture to propagate the frugality philosophy of the protestants described by Max Weber and Benjamin Franklin that created the condition for the necessary capital accumulation for financing the Anglo-saxon capitalism.
The Chinese did one more thing, they put their heads down, avoiding any unnecessary confrontation with West, swallowed temporary their pride, recognized the leadership of the West and leaning in that leadership for access to more resources and knowledge.
They seek no vain pride in winning a football match or Olympic medals, for Chinese priorities should be priorities.
In less than 30 years that disciplined and pragmatic approach lifted more than half a billion people out of poverty.
The only country in Africa I know that is following a similar path is Ethiopia. The Ethiopian president Mulatu Teshome was educated in China, receiving his bachelor’s degree in philosophy of political economy and doctorate in international law at Peking University. Ethiopia is the only African country with a double digit growth for the last 10 years.
All other African countries follow the IMF and World Bank colonial agenda which goes against the role of the state in the accumulation of wealth and sponsoring local industries, therefore opening those countries to the predatory role of western multinationals. As, I’ve written in a previous post “Africans now live on a continent owned by Europeans“