Are we a socialist economy?

 At the peak of the cold war, there were two Germanys— East and West. One had a market based economy, the other a communist/socialist economy. Berlin was a city shared by both Germanys. It was portioned, by a brick war, into East Berlin and West Berlin.

Having been trained and/ or practised in the USA and the UK for about 40 years, Kamuzu did not want to hear anything about communism. He, therefore, forged diplomatic relations with capitalist West Germany, but not socialist East Germany. I still remember the name of the woman who served as the West German Ambassador to Malawi for a long time – Theodora van Rossum.

In the same vein, Malawi was diplomatically linked to a small Chinese island called Taiwan while the communist Mainland China was not. It was taboo, under Kamuzu, to be associated w i t h c o m m u n i s m / socialism.

A number of African leaders found the socialist philosophy attractive, not because it considered every human being equal to another. In a truly communist state, there are no differences among people based on class, race or ethnicity. That is the kind of society most African freedom fighters aspired to; hence, their affinity to socialism. Zimbabwe, Mozambique and Angola had their beginnings, as independent nations, in socialism. Under Kenneth Kaunda, Zambia experimented with a local version of socialism called humanism.

Market-based economic systems spread even to those countries that were once staunchly communist. Such an economy means individuals are at liberty to own businesses and prices of goods or services are determined by the interplay between supply and demand. In communist/socialist economies, by contrast, businesses are owned by the State and prices are set by State agents. It becomes the government’s responsibility to ensure there are enough goods and services in the economy to go round to everyone. Scarcity of any commodity is strictly the fault of government.

Communism was introduced to China by Mao Zedong. Brilliant though he was, China was far from Utopia under his reign (1949 – 1976). Many people experienced shortages of food, housing and other basic necessities, which resulted in widespread famine and millions of deaths. The China of today permits private ownership of businesses. One of China’s richest individual’s is Jack Ma, the owner of a Chinese multinational conglomerate, Alibaba.

Malawi is a market based economy, albeit amid intense pressure on government to pursue socialist policies. Many programmes run by the government, among them affordable inputs programme, mtukula pakhomo, free medical service and others, are a manifestation of socialist tendencies. They are, in fact, what people, in their own subtle ways, demand; the government simply yields.

A significant portion of our populace is incapable of a v a i l ing ce r t a in services independently, thus, necessitating the inter vention of the government. The crux of the matter lies not in the necessity of aid, but rather, the most efficacious manner form of assistance. The government is compelled to allocate funds for public needs. Upon reflection, the government, in fact, lacks a sustainable revenue stream, relying chiefly upon the taxation of its citizens. Affluent members of society bear the burden of financing the requirements of the less privileged. Hence, the primary function of the government manifests in the facilitation of capital flow from one economic stratum, the affluent, to another, the impoverished.

This arrangement lacks intrinsic attributes to cultivate collective economic advancement. Given their entrepreneurial nature, the affluent will continue to amass wealth, albeit potentially feeling encumbered by the prevailing taxation system. Owing to the absence of an enterprising ethos, the impoverished populace, reliant solely on handouts, inevitably faces a trajectory of deepening destitution.

What is imperative is the empowerment of individuals rather than reliance on paternalistic governance. Those in need should receive support to transcend perpetual deprivation. They ought to be guided towards self-sufficiency through assistance that fosters long-term independence.

I find the Dzombe philosophy useful in this respect. He has set up businesses involving primary and secondary production around his home area in Dowa. These businesses employ local people, who will be given the chance to own them in due course. The employees will buy off the business stakes from Dzombe, who will use the proceeds to set up a similar facility elsewhere. This is a brilliant vision for Malawi