Lies- Response To Post Newspaper’s Editorial Comment

By Muhabi Lungu

Dear Mr Fred M’membe,

RE:   LIES-A Response To Post Newspaper’s Editorial Comment-“WHY IS MMD OPPOSING SATA’S INDECO IDEA? PART III

Preamble

It has been exactly one month, on 14th February 2014, since I personally delivered to your offices, the first part of my third letter to you in answer to your editorial question of 8th January 2014.  In your intentionally sinister and propagandist editorial, you inquired as to the reasons why the MMD stands opposed to “Sata’s Indeco Idea?” I believe that in the last two letters, I have furnished you with sufficient arguments as to the reasons the MMD stand opposed to this anachronistic, out of time and out of context idea. Since you have not responded to my three letters so far, I have concluded that either you are waiting for me to finish all the four letters, as promised by myself or that you have seen it beneath you to respond to my arguments. Either way, you could at least have attempted to redeem yourself by having the decency to print my side of the story in your newspaper. You, as a person, do not have to take me seriously, especially if you think you are all high and mighty. However, you need not fear to allow your readers to take me seriously, if truth is on your side. I suppose that this would be asking for too much. Anyway, I guess we all now know what that makes you!

Re-Cap

Your basic premise in that editorial was that “the MMD government blindly pursued neoliberal policies which have not brought any meaningful development to the country for the two decades that they were in power.” You further went on to denigrate the ‘imposed’ neoliberal concept, literally equating it to an evil system. You then conclude by stating the following; “we reject capitalism, in its economic expression as well as in its ideological basis, which favours individualism, profit, and exploitation of humanity by humanity.” You then proceeded to religiously extol the virtues of socialism and used it as the firm foundation by which you believe that all of us ‘ignorant economist’ should support the wonderful INDECO idea as proposed by President Michael Sata. According to you, only then, can Poverty be a thing of the past.

It has been my view that your editorial of Wednesday January 8th 2014, is one of the most uninformed, shallow and pedestrian comments on an economic subject that I have come across in decades. It was verbose vituperations, born out of ignorance of general economic principles. However and in accordance with your prioritization, I noted the three thematic arguments you put forward in support of the Indeco idea. These were as follows; the theoretical underpinnings of Capitalism vs. Socialism; the efficacy and goodness of the INDECO idea in itself; and the value systems or the characteristics of the people entrusted to execute these ideas.

In the first two parts of my third letter, I believe that the efficacy and goodness of the Indeco Idea was sufficiently tackled and totally discredited. Thereby successfully providing the rationale as to why the MMD leadership was opposed to the re-introduction of the Industrial Development Corporation. I went further to dispute your untruthful assertion, a blue lie, that MMD achieved nothing in its twenty years of governance; in fact proving to you that enormous achievement towards economic growth and improvements in the conditions of the vast majority of our people was actually made. Of greater significant, plenty of empirical evidence was adduced in regard to the failures of INDECO and the subsequent collapse of the socialist economic base it was supposed to support. In part three, I will primarally deal with the theoretical underpinnings of Capitalism vs. Socialism. Finally, I will conclude with a brief discussion on the value systems, and the characteristics of the people entrusted to execute your revisionist socialist INDECO Idea.

Underpinnings of Capitalism vs. Socialism/The Zambian Experience

Before I delve into the arguments, pro and against, for either of the two stages theories of development, let me just briefly divert and deal with your malicious lie that the MMD blindly pursued or ‘imposed’ neoliberal policies on helpless Zambians. Firstly, you must acknowledge that the economic policies introduced in 1991 were generally as a result of the world wide trend towards a movement to the free market economic mechanism and away from commandist economic systems. This was brought about by the economic and political collapse of the Soviet Union; the leader and flag bearer of the Leninist Socialist Republic. The most significant iconic event of the era was the collapse of the Berlin Wall in 1989. The symbolic  incident, drallwing of the iron curtain, occurred one year after the last presidential and general elections of the one party state, held in 1988, by the socialist inclined UNIP.

This is significant and it shall be explored at another time. Suffice to say, that UNIP itself, had began to move towards neoliberal economic policies and the capitalist agenda after the elections of 1988. A Technical Committee on privatization of the parastatal sector was appointed by the Kaunda Administration. I do recall having a discussion with my Development Economics Lecturer, at the time, Professor Venkatesh Seshamani, and other lectureors at the University of Zambia, who were being consulted by the Committee looking at ways of possibly “privatising with a human face.” Therefore, the initiation of the denationalization of ZIMCO and INEDCO was started by the socialist UNIP and not the MMD. Even the Agriculture’s centrepiece institution of the National Agriculture Marketing Board (NAMBOARD) was abolished around this same time by the United National Independence Party; of course, with a little urging from the International Monetary Fund (IMF).

This directional change towards capitalism was happening in almost all the former states in the socialist crusading Soviet block, Latin America, Middle East, Asia and in almost all the African countries. This trend was the exact opposite of a trend of equal magnitude, occurring 30 years earlier in the 1960’s. Then, it was a movement away from capitalism going towards socialism and decolonization. The main driving force at that time was economic nationalism. I understand it and respect it because the nationalist were reacting to the choking influence and limitations placed upon them by the capitalist of the imperial colonial era. The Buchizya Kaundas’ and the Kambaragi Nyereres’ were not blindly pursuing this socialist agenda. It was the fashion of the time, born out of their immediate personal struggles and experiences. Equally, it is incorrect to suggest that the MMD blindly pursued neoliberal polices in the early 90’s. It was the en’vogue (the in thing); the fashion of the decade of economic liberalization and open market Glasnost and Perestroika. In any case, your beloved President Michael Sata did not seem to object and was firmly at President Chiluba’s right hand. Just for your information, China, had already began to move towards this direction with its reforms of 1978; a decade earlier.

MMD’s peculiar version of the Neoliberal Agenda in the 1990’s/2000  

Indeed, it is a statement of fact that the MMD’s economic agenda has always been driven by the belief that the private sector is the most efficient allocator of resources. However, the veracity of their belief and the level of divergence between extreme right wing Monetarism of Milton Freidman and the slightly right of centre Keynesians defined the two decades governed by the MMD.

This dichotomy was represented by two separate administrations pursuing differing versions of the free market model. While the Chiluba Administration was Freidman in nature the Mwanawasa and Banda Administrations where Keynesian in approach. The defining difference is that the Chiluba Administration fully believed that Government had “No Business in Business,” while the Mwanawasa and Banda Administrations adopted Franklin Delano Roosevelt’s (FDR) approach of the “New Deal”. A purely Keynesian concept which states that government has a role in jump starting private sector aggregate demand when there is a recession or a great depression. Such was the case after the great depression of the 1930’s when Roosevelt’s new deal first came to light, supported by a Keynesian book entitled ‘The Means to Prosperity’ first published in 1933; the worst year of the Great Depression. This theory gained and influenced minds both in Germany and Sweden during this time. However, the foundation of economic policies pursued during the decade after the Great Depression, by FDR were primarily guided by the ‘General Theory of Employment, Interest and Money’ published in 1936 by the British economist John Maynard Keynes.  This was the book that rose to challenge the neoclassic economic theories of that day. The same progression happened here in Zambia as we transitioned from the Chiluba to the Mwanawasa Administration.

Under the Mwanawasa Administration, development planning was reintroduced and hence the Transitional National Development Plan (TNDP), the Fifth National Development Plan (FNDP) and the Vision 2030; all planning instruments of a socially conscience MMD administration. I myself was the ‘Focal Point Person’ for some of these instruments while I was at the Ministry of Finance and National Planning. Equally I was also there, as a committee member of the Manifesto Committee, when UNIP was drafting its 1996 Manifesto, under the chairmanship of Francis Nkhoma; another Keynesian economist. In 1996 UNIP made a fundamental change from being a socialist inclined party to a social market democratic organization with it fundamental roots based on the free market. The New Deal Administration of Mwanawasa stated clearly that through stimulating aggregate demand the government can embank on massive infrastructure projects and if need be, introduce socialist type support structures such as subsidies in a targeted manner. Hence, the reintroduction of the Farmer Input Support Programme (FISP) in 2003. The Banda Administration continued with these policies and came up with the Sixth National Development Plan (SNDP).

Both of these approaches, pursued by two different administrations, are perfectly fine and are often considered within the context of the particular structure of the economy. For example, the main economic drivers of the first MMD administration, Ronald Penza, BY Mwila, Emanuel Kasonde, Vernon Johnston Mwaanga, Arthur Wina, Sikota Wina, Humphrey Mulemba, Akashambatwa Mbekusita Lewanika, Baldwin Nkumbula, Dean Mung’omba, Simon Zukas, Dipak Patel etc were all private sector businessmen who either abrogated the leadership code during the time of UNIP or were direct beneficiaries or victims of the industrialization process emanating out of the ZIMCO/INDECO idea. These men had seen the short comings of the socialist agenda first hand and had seen its follies and its destructive impact on the economy of Zambia. They felt choked as businessmen and desperately wanted to reintroduce the free market so that their businesses could expand. So, it made sense for the MMD, at that time, to pursue extreme right wing monetarist economic polices with a passion. So much so that the agenda of the trade union movement, led by Fredrick Chiluba and others, who may have had socialist linings, was completely overrun. I remember, personally debating with Honourable Ronald Penza about his extreme right wing views, and I can confirm to you that he genuinely believed that it was the right thing to do at the time. Nobody needed to convince Ronald Penza, BY Mwila and Emanuel Kasonde about neoliberal policies. They thrived on them. I disagreed with them, but I respected that it came from a real place of belief in their ideological frame of mind and in their practical personal experience.

You Mr Fred M’membe have absolutely no locus standi to make accusations that these men connived with imperialist forces and blindly pursued these injurious policies. You have no locus standi to make such accusations because you were not involved and you were of no consequence at the time. In fact, the newspaper you now own, was birthed during this great revival of the free market when Mike Hall and Melinda Ham established the paper with the help of other capitalist entrepreneurs such as Baldwin Nkumbula, Simon Zukas, Enoch Kavindele, Morris Attalla, Katongo Maine and Theo Bull etc. Your role in the establishment of this capitalist crusading newspaper, then called the Weekly Post, was insignificant. I certainly do not begrudge the tremendous contributions you have made to the paper, including the numerous awards you have won. But, 20 years after the event and you at the pinnacle of the paper, I am surprised that you can have the audacity to suggest that “you reject capitalism and the neoliberal agenda.”

Well then, Mr. M’membe, if your wish should come to pass, then your Newspaper should be the first to be nationalized and turned into PRAVDA. Or, maybe the new owners will call it ‘Mein Kampf.’ Lord knows it is already performing the propaganda function for the Patriotic Front as we now speak. What hypocrisy! Unbelievable. It reminds me of the saying that people who live in glass houses should not throw stones.

“Economic systems as unjust or immoral”

In your editorial, you state the following; “There is thus a moral equality about an economy, a quality that has its roots in the morally correct or incorrect choices by the people; and it is the moral quality of the economy that enables us to make judgements about whether or not it is a just economy.” You precede this bold statement with a discussion about poverty and how you believe that economists argue that the existence of poverty and unemployment, and the inequitable distribution of wealth, are the result of inescapable economic laws, and must therefore be accepted as such. Mr. M’membe, with all due respect, this is utter nonsense and clearly shows that you are way out of depth in as far as your understanding of the differences between Economics and Political Science. You must learn to untangle the two disciplines first and treat them as separate parts of the same equation.  First, differentiate them and then relate them to each other. Do not begin by mashing them together and then coming up with a bogus philosophy of moral justification. Doing this always leads to the type of confusion that you seem to have entangled yourself in. Let me explain.

Economics as a discipline is primarily concerned with solving the problem of ‘Scarcity.’ Scarcity is simply defined as limited resources for unlimited demands. This is a fact that no one has disputed. That, national resources are insufficient to produce the quantities of goods and services that would be required to satisfy all of its citizens’ wants. In its first instance, the discipline makes a clear differentiation between ‘Positive’ and ‘Normative’ statements in order to avoid being quickly entangled in to moral issues. “Positive statements are about what is, was or will be; they assert alleged facts about the universe in which we live. Normative statements are about what ought to be. They depend on our judgment about what is good or bad, and they are thus inextricably bound up with our philosophical, cultural and religious positions. (An introduction to positive Economics-Richard G Lipsey)

The vast bulk of economics is Positive economics. It is amoral and does not concern itself with right and wrong, just or unjust, but merely is a study of people’s behaviour and an attempt at determining the most mechanical and efficient allocation of resources in order to produce the greatest amount of goods or wealth. But, after wealth has been created, then political systems, cultural and religious dispensations determine distribution or how that wealth is to be shared. In order to share there has to be something to share. Economic systems endeavour to find the best mechanism of creating wealth, and it is political systems that endeavour to find the best ways in which to share that wealth. This distinction must be understood by people who endeavour to discuss these subjects and educate others. Granted, that there has been in the recent years a discipline called Development Studies. This discipline attempts to combine the two and builds upon the foundation of political economist from the classical era such as Ricardo, Thomas Malthus and Adam Smith.

 

 

-End of Part III-

 

 

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