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One of the responses I got from the earlier article, on the same subject,
was in a form of a phone call from a friend, who labelled me a socialist.
‘Anybody that does not agree with the free-marketer is a socialist, in their
books,’ I insisted. Free-market ideology does not consider socialism as the
real threat, because that it can counter with strong arguments. However, the
Third Way, which is Keynesianism, is a well grounded ideology and can only be
defeated with brutalism. Unfortunately, anytime Friedman-ism runs into
problems, which it often does, the state always reverts to what Keynes proposed
– Keynesianism. The current mortgage crises in the developed economies, for
instance, without government intervention, would have developed into economic
earthquakes – with massive layoffs, lost of properties and a run on the banks
by depositors. We all saw what happened to Northern Rock in the UK and all the
mortgage lenders in the U.S. and some industrialised economies.
For the avoidance of doubt, Keynes had argued that since business investment
necessarily fluctuated, it could not be depended upon to maintain a high level
of employment and a steady flow of income through the economy. Keynes then
proposed that government spending must compensate for insufficient business
investment in times of recession. That was what President Bush, the hardcore
follower of Friedman ideology, did by momentarily dumping Friedman’s ideology
for Keynesianism in order to avert economic catastrophe in the U.S. He also
begged other industrialised nations to intervene and pump public money into
their distressed housing market that was allowed for a long time to regulate
itself. They still may not be convinced, but it proves that Friedmanism as an
economic ideology is flawed after all. The problem is that the ideologues of
free-market are either myopic or cannot see the bigger picture. The ideology is
hollow, if you ask me.
History is not even on their side and must have come a full circle. Western
civilisation started about 50 centuries ago in a small plain in south-east Asia
known then as Mesopotamia and later renamed Babylonian plain, but shockingly it
is the troubled land of Iraq today. Thus western civilisation, as we know it,
owes its origin to that land. At that time, cities rose and government
developed and these developments later spread to Palestine, Greece and Rome.
Mesopotamia which is Greek for “land between the rivers,” was what the plain
was. The twin rivers, Tigris and Euphrates flow down from the mountains
south-eastwards through hilly grasslands they created, and before exiting into
the Persian Gulf, deposited fertile soil of mud that formed the marshlands
along their banks. The same land, just as today, had very little rainfall and
with the blazing sun – irrigation became vital for farming.
In early times before recorded history, the Sumerians, who were the first
settlers in Mesopotamia, built embankments to control the floodwaters of the
Euphrates River. Gradually, the marshes were drained, dug and irrigated. A
large-scale co-operation was needed for the construction and the repairs of the
canals and ditches that formed the irrigation works. That co-operation was what
gave rise to government and laws; as we know them today. Civilisation, in one
of its terms, has been described as an advanced level of development in society
that is marked by complex social and political organisation, and material,
scientific, and artistic progress. Keynes recognised this, but Friedman seemed
to have discountenanced it. Cynically, at the beginning of the rise of
free-market global wave, sometimes back before the invasion of Iraq, one of
Friedman’s protégé defined it as the “end of history,” and not the beginning of
it. Consequently, they chose Iraq, the birth place of civilisation – in an attempt
to end history.
The conversation I had with my concerned friend became lengthier, but not
over the phone. We both agreed that it would be better to spend the money,
about 50 naira per minute that would otherwise had gone to the phone operators,
on ourselves - the advantage of free-market economics, he argued. He won. We
met over a beer and guess what we discussed. Economics is a Greek word meaning
“household management.” It is the performance of tasks and services that allow
a family to survive and prosper: it is about the provision, primarily, of food,
clothing and shelter. It is also about our desires, such as luxuries of
automobiles; television sets; mobile phones; access to the Internet and even a
visit to the dentist. A chosen economic system by a government that best
delivers these in a society has been the bone of contention over the ages. The
word “capital,” for instance, refers to the factor of production, which is the
money, land, buildings, and machinery it takes to operate the enterprise and those
who supply the money are known as the capitalists.
In the last 70 years, the world has experienced the two extremes, which are
socialism and capitalism, and of course the middle of the way – the Third Way.
Whereas communism, socialism, etc. are top-down command-and-control political
systems, they are not as efficient in terms of production as capitalism. This
implies that in capitalism, people have individual liberty and the right to own
a property – which in the other systems is ceded to the state. They also have
the right to do what they wish with their property, as long as nobody is
hurt – mm! People may not be hurt directly, but the environment could be
damaged. Profit has always been anti-environment. This could be one more
difference between Keynesianism and Friedmanism, because, to start with, they
are both capitalism, but with different degree of how they affect the society.
Free-market ideologues oppose the third way, Keynesianism, which could, as a
bare minimum, provide the basic necessities to the underprivileged. Besides, it
is a safety net that allows the rich to have a decent sleep instead of going to
bed with one eye open.
Friedman and his followers, however, have their own solution. It is, to make
enough profits, to be able to buy the security necessary that will prevent them
from going to bed with one eye open. So, we have all decided to live like caged
animals, boarded by burglary proofing and privacy violated by surveillance
cameras, inside walled zones like the “Green Zone” of Baghdad. There, over 50%
of the U.S. forces in Iraq guard the Green Zone of Baghdad alone 24/7 in order
to isolate themselves from the horrors of the red zones, they created, outside
of it. The creature of self-interest has pushed self-interest to another level
and has murdered sleep. In softer term, the difference between the two forms of
capitalism is regulation. By not allowing the market to regulate itself, the
common denominator, the government, could bring down the “wall” between the red
zones and the green zones, and everybody goes home happy. No wonder the
free-market economy is against strong government. Besides, it has been proven
that Keynesianism is more efficient in terms of development in the society, but
maybe a little short on delivery of profits to the capitalists.
The greatest enemy that free-market economy ideology has is democracy,
unfortunately. The one-man-one-vote mechanism is not in its favour unless
rigged. Politicians have recognised it. For instance, the referendum on the
future of the European Union, which is basically the introduction of
free-market economy, was defeated across the length and breadth of Europe. The
ideology is lopsided and can only be balanced by brutality or deceit, which is
why only dictators have attempted its implementation. From Pinochet to
Babangida and now their grand patron in the person of Bush, they have left
large-scale poverty in their wakes. They are antidevelopment because it eats
deep into otherwise corporate profits. Come on people! Your salvation could be
to carry the battle to the capitalists using the other great work of Friedman,
monetarism, as a weapon. By starting to monetise all issues also, as the
capitalist has always done, it would stop being their exclusive preserve. Maybe
with that, tribalism and nepotism that the capitalists had always used to
deceive would not deflect the people’s focus any longer.
Iunderstand that the new mega city being planned for Lagos is coming
complete with its own airport, social amenities and biased electricity supply.
It would leave the rest of the city in the Stone Age. It may not be a duty-free
zone as claimed because it is being funded by businesses; but exclusively
preserved for the rich. The rich and the capitalist, at last, would have their
own haven – their own Green Zone, while the rest of Lagos could descend into
red zones. If that happens, it could be one green zone that could require the
whole strength of the Nigerian Army to defend, if the rest of Lagos is somewhat
damned and abandoned. I wish everybody, on both sides of the argument, a Happy
New Year and a stream of good prospects in the years ahead.
Samuel Akinyele Caulcrick, the author of The Devil Must Be Laughing.
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Posted by Robot| 31.12.2007 09:19