| THE ECONOMIC QUESTION IN THE THIRD WORLD BY ESKOR TOYO Paper presented at a lecture organized by the Academic Staff Union of Universities (ASUU) held at Theatre I, Old Campus, Bayero University, Kano Tuesday, January 30, 2001 Politicians, administrators, trade unionists, traditional rulers, and other laymen have to confront various economic questions. The article below is meant to help everyone who can read English. Questions come up now and again, which are quite perplexing. The article is called 'the economic question' because I want to help the layman see the whole field as simply and clearly as possible. By the way, let me state my own definition of economics. It is a social science, which in the ultimate is concerned with the social organisational and behavioural realities which shape the levels of wealth or poverty, affluence or lack in means of want satisfaction which groups and collectivities of people attain or can attain. Some economists make the subject matter of this science more mysterious. Besides, in my view, they are misguided. The industrialised countries, called 'developed' belong to the so-called first and second worlds by order of historical appearance. The first is the industrial capitalist world and first appeared between 1970 and 1890. In this world exist, for instance, Great Britain, the United States of America, France, Germany, Italy and Japan. The second world is the industrial or 'developed' countries in transition to socialism. To this world belong, for instance, Russia, Czechoslovakia, Hungary, and Poland. Such a transmission began in the former Russian empire in 1920. The first and second worlds are really a few countries, although some of them, like the U.S.A. and Russia, are very large. The vast majority of the countries of the world are non-industrialised or semi-industrialised and are commonly called 'underdeveloped'. The bulk of them like Nigeria are trying to build capitalism. A few of them like China, North Korea, Vietnam and Cuba are trying to build socialism. I shall name a number of economic problems of The Third World. 1. Whereas many economists and policy makers in the first world see their economic problem as that of the best use in terms of profits of a modern production capacity already built, the economic problem of the Third world is that of creating modern capacity. It is important to see this. 2. Third world countries do not simply want to grow by raising the national income. They could languidly grow by trying to export more of agricultural and mineral goods. They want to develop, i.e. create a modern society producing modern goods, benefiting from modern houses, transport and communication, and served by modern economic institutions like modern banks.The crucial process in this industrialisation, and countries that are not clear about this will stay underdeveloped so long as they are not. 3. Concerning growth, economists measure national economic growth generally in terms of the growth of the national income per head. With developed capitalist economies, except for the competition for world domination among the imperialist ones, it is sufficient for the growth rate of the per capita national income to be barely positive. This means that the economy must grow faster than the population. for Third World countries this is not enough. They have the so-called catch-up problem. This means that economic growth should exceed population growth to an extent appreciably above that of already developed countries. This catch-up imperative is a crucial worry. Some economists say that national income per head is not a self-sufficient measure of the general welfare or wealth of the population. They are right, but we cannot go into this query. However, in so far as they are right, it becomes a problem in the Third world not only to make the economy grow but also to really raise mass welfare with this growth. The existing industrial capitalist countries solved this problem by neglecting the masses and riding rough-shod over them with a lot of, barbarism and hypocrisy. Those who still want to do so in a world as enlightened as our own have a harder problem. 4. Third world countries need economic autonomy. This means that the country needs self generated growth. Most Third World countries do not want a situation like that of South Korea where manufacturing in South Korea means importing raw materials and components from Japan and the USA which are assembled in South Korea, whether for internal consumption or for export. Many problems follow from that kind of dependence which we cannot go into. Brazil is another case. 5. There is the problem of economic independence in the sense of being one's own boss. Canada is industrialised but the major industries are owned largely by capitalists in the U.S.A.. Britain, the U.S.A., France, Germany, Sweden, Russia, Japan, etc, are not only developed; they are independent. All socialist-oriented countries are conscious of independence. In capitalist-oriented countries like Nigeria the capitalist-imperialists from Western Europe and the U.S.A. are seen simply as 'partners in progress'. Many people want to have a country that they really own. 6. Capitalist orientation is a very fundamental problem in the Third World. Capitalism implies: (a) ruthless exploitation of the mass of working people to enrich a few; (b) gross and growing inter-personal, interclass, inter-ethnic, interregional, urban-rural, inter-occupational, etc. inequalities which - to make matters worse - accentuate as capitalism grows or develops; (c) acute and ubiquitous discrimination; (d) the growth of monopolism; (e) the spread and accentuation of selfishness greed, opportunism, grabbing, money worship, and callousness arising from the preference of material wealth to men; (f) great and constant instabilities; (g) insecurity arising from inflation, the limitation of educational opportunities, and various forms of unemployment. These characteristics do not exist in all economies, need not exist in a modern economy, and are not accidents or errors in capitalism but are rooted in the very nature of this economy. 7. Third world economies have the problem that a capitalist economy is very unstable. The sources of instability are several: inflation, repeated depressions, balance of payments fluctuations, credit cycles, stock market swings, strikes, political changes, wars and even some kinds of rumour. Consequently those third world economies that are heavily dependent on supply or demand from capitalist countries must be very unstable. 8. Another problem of developing countries is that in many or most of them the indigenous capitalist class are predominantly not production-minded. They are not keen on adopting, let alone inventing, technologies and launching production enterprises that utilise such technologies. They can make quick money from domestic trade, from import-export trade or from various other non-production sources or those requiring no inventiveness. Money making is not the same thing as investment in production or innovation. In Nigeria, for instance, a large mineral oil export revenue makes it possible for businessmen to become millionaires from government contracts, supplies to the government and important trade while agriculture, manufacturing industry and non-petroleum mining remain neglected. 9. There is the problem of what one may call dependent consumption. Third World countries find themselves in a situation where the whole range of modern goods is already being produced in large quantities and with more and more effective technologies in the U.S.A., Europe and Japan. What is more easy than to important anything one needs: the Nigerian middle class, for instance, has its body in Nigeria but its mind in Europe or the USA. 10. One problem of capitalist development in the Third World is the use of the state apparatus itself for primitive capitalist accumulation. Primitive accumulation is the process by which large or fairly large capital is acquired for launching capitalist enterprises. These are on a larger scale than peasant, artisan or petty-trading enterprises because they involved employing and paying many people. Such capital is acquired from domestic and external profiteering trade; real estate speculation; bank assembling, creation and lending of money, etc. Prominent in the Third world are state contracts, state subsidies, high perquisites in governmental offices and various forms of cheating the government as modes of primitive capitalist accumulation. Consequently, government in the Third World is more a theatre for the acquisition of existing money and property than for the creative direction of the economy towards production through innovation. 11. Creative production research is very active in Europe, America and Japan. Underdeveloped countries find themselves continuously outpaced in a race ab initio a handicap one. In steel production, for instance, mini-mills are replacing traditional mills. Newer and newer types of synthetic fibre are shoving cotton aside. Typewriters and calculating machines are being ousted before Nigeria can manufacture them, and ever new vintages of the supplanting computer surface on the market every few years. Meanwhile, many underdeveloped countries pay no attention to research, because of the influences of cultures and so-called leaders whose thought processes are captives of a pre-scientific age. India, China, North Korea and Israel have long been outstanding exceptions. 12. Foreign direct capitalist investment creates special problems, namely, those of profit repatriation, loss of foreign exchange to raw material and equipment imports and profit repatriation, the crowding out of indigenous capital from the most reward areas as the economy grows, and recolonisation. 13. Dependence on foreign loans has its own problems. One is paying interest on the loan. The second is saddling the future of the economy which loan repayment. The third is the loss of foreign exchange to debt servicing. The fourth is that since the terms of trade (i.e. prices of imports as compared with prices of exports) tend to be unfavourable to Third World raw material exporters, any debt burden becomes heavier as time rolls by. This happens because foreign debts are serviced in foreign exchange and the unfavourable terms of trade whittle the capacity to earn foreign exchange. 14. Another problem is that Third world capacity to earn foreign exchange is undermined not only by unfavourable terms of trade but also by the restriction of the importation of the manufactured export goods of Third World countries into industrial capitalist countries. Socialist-inclined and patriotic governments in the Third World are confronted with even severer restrictions. If a third World country is revolutionary or independent-minded, however, this impels her to summon self-reliance and inventiveness rather than capitulate. If the Third World country is Nigeria, she prostates. 15. Apart from everything else, agriculture poses problems of its own. Access to land by real farmers, improving land quality and crop or animal variety, improving cultivation and tending of both crops and beasts, taming water and bringing transport means to farm and market, preserving and storing of products which are perishable and doing all this in widely scattered localities, and multifarious terrains and ecological climatic areas - these are problems which the industrial countries took one or two centuries partially to solve but which Third World countries have to solve virtually overnight. The United States, Canada and Australia had vast land and a long time. In so far as they can be said to have done so, all industrial capitalist countries solved the agricultural problem by industrialising, improving agricultural techniques with the products of industrialisation, moving the bulk of their working population out of agriculture and inflicting great suffering in the process, selling the industrial goods to buy farm goods largely from countries that remained agricultural, and-in the cases of Britain, France, Italy, Germany, Czarist Russia, Japan, the U.S.A. and Belgium - launching imperialism to control agricultural or mineral raw materials or markets for industrial goods from economically weaker countries. 16. One economic problem that Third World countries share with industrial countries is monopolism and a vast bureaucracy of giant firms and the state. The bureaucrats try to use their decision-making monopolies, many of them are transnationals, and the state is in actual fact primarily an instrument of the private owners and managers of these monopolies. In socialist orientation the firms and the state belong to the working people. The bureaucrats are employed in the first place to serve the working people. The relatively peaceful character of the market-orientation changes in China, Eastern Europe and the former republics of the USSR reflects the authority of the people as owners of the firms and the state. 17. There is a lot of hypocritical noise by capitalist exploiters in Western Europe and the USA about poverty. They sound like people waking up from death to see the World. Mass poverty was there all the time. The point is that far from being able to eradicate poverty, capitalism exploits the poor to create millionaires. Third World countries building capitalism can only join the hypocritical noise about 'ameliorating' poverty. As for this 'amelioration', capitalist governments have tried it since capitalism was born. Even predatory slave systems and feudalism tried amelioration. The injunctions about alms giving in some religions were efforts by social reformers to ameliorate mass poverty. Yet the beast remained. Predatory economic systems reproduce mass poverty by the very processes of predation which enormously enrich a few. Kings and aristocrats could not be fabulously rich unless slaves, serfs and subjects produced wealth but remained poor. Why do the predators not speak of eradicating poverty? Practically all economists now know that mass poverty is not caused by some deity, by birth, by laziness or by some particular misfortune. Although some economists play hide and seek with the matter, mass poverty is caused and perpetuated by various processes of predation which in their totality concentrate great wealth in the hands of a few or a state manipulated by a few just as they thrust multitudes of people into or keep them submerged in penury. 18. We are living in an age when the democratic cry, national liberation clarion sounds, human rights sirens, trade union battles and socialist storms have all become an indisposable part of the social scene. Modernity and humanism press to move forward together. The people are very much in history in our epoch. In such an age the more truly the Third World countries try to solve the economic problem confronting them, the more they find themselves having to adopt a revolutionary attitude to cope with these problems. Equally the more they avoid being revolutionary the more stupefying the crisis into which they walk. The formation of the Organisation of Petroleum Exporting Countries (OPEC) is a clear single example. It was a revolutionary act. It illustrates both the necessity of revolution and its efficacy as the last resort. Economic problems confound the lay man daily, dazing him with their ubiquity and deadly elusiveness. What I attempted was to take him on a walk down the whole corridor, showing him the main doors. The economist has the keys to open these doors and he can see the ramifications and intricaries of what lies within each room. How much he sees depends on whether or not he wears spectacles handed to him by imperialist do-gooders. These spectacles dazzle, but they carry a hardly visible mark, 419. Eskor Toyo |
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