Africa: What we stand to gain in Democratic Capitalism

In a recent workshop with a group of social scientists, I pose this question to them. ‘It seems that most social scientists don’t like capitalism’. I was right they couldn’t say No categorically to my observation. Apart from economists; it may be accurate to conclude that social scientists will favour another economic model preferably socialism. I don’t understand why this is the case when Margaret Thatcher had observed back in 1976, that “Socialist governments traditionally do make a financial mess. They always run out of other people’s money. It’s quite a characteristic of them.”

I have come to believe that democratic capitalism though not perfect, is the best economic model that could lead to economic emancipation of poor and disadvantaged people in Africa.

Before we go ahead let us examine what is democratic capitalism [DC]? DC is a political, economic, social system and ideology based on a tripartite arrangement of a market-based economy that is majorly focused on a democratic policy, economic incentives achieved through free markets, fiscal responsibility and a liberal moral-cultural system. DC is founded on the principles of liberalism i.e liberty and equality. An example of a nation that has this type of ideology at heart is United States of America, with a deeply ingrained belief in economic liberty and individual freedom.

So, why should Africa consider DC? To me, it is the best way to give our people economic, political, religious and even cultural freedom. It allows the creativity of the people and their capacities for invention and creation of new goods and service to thrive

Michael Novak, Author of The Spirit of Democratic Capitalism, wrote “The best route to liberate the poor is grassroots capitalist development. The greatest of all acts of charity is to teach the poor a system for escaping from the prison of poverty.” However, before the poor or the unemployed could obtain the benefit of DC – Economic prosperity- , they must change their mindset. They must be committed to a new way of life. Which include looking around, seeing what needs to be done and taking initiatives to do them without anyone telling them what to do. They must also work, invest, take risks, solve day –to-day difficulties, and bring new realities into being –that is, they must practice economic creativity.  They must also learn to work well with others e.g workmates, customers, suppliers and all those on whom their success depends. Mastering of other soft skills such as communication and leadership skills are also vital.

Government, multinationals, non government organizations, religious bodies and individuals all have a role to play in ensuring that people experience the benefit of democratic capitalism. Government must provide a conducive environment for small businesses to develop, grow and thrive. In addition, according to Michael Novak “it is imperative that a large supply of microloans be made available for poor persons who have promising business plan. New institutions that specialize in making such loans, as well as in providing technical support to help borrowers succeed, will need to be founded, since most existing banks in Third World nations lend little or nothing to the poor. Borrowing is the mother’s milk of infant business.

Since poor people have no preexisting capital with which to launch or expand their businesses. All they have are their ideas, their sweat, and their good habits; since these are the main cause of their wealth of nations, which is quite enough to justify establishing such institutions.”

Prof Muhammad Yunus’s initiative in Bangladesh in the early late 70s comes to mind. This type of model could be reciprocated across the poor communities all over the world. For those that don’t have information about Prof Muhammad the next paragraph will help.

In the aftermath of the Bangladesh famine in 1974, after Professor Muhammad Yunus returned to his country, he met a group of very poor village women who made a living from bamboo furniture making and sales. They complained that they found it hard to buy bamboo because they had no spare cash, and no banks or reputable money lenders were willing to lend to people with no property and no expectations. Immediately, Muhammad pulled some money out of his trouser pocket – $27 – and distributed it to forty-two families so they could buy bamboo. Surprisingly to him, the women later repaid it.

His experience made him to turn it into a university research project. To cut a long story short, the project developed into Grameen (meaning ‘village bank’ in Bengali) Bank which has lent $10.89 billion in tiny sums to borrowers with the repayment rate of 96.89 percent. In October 2006, Muhammad Yunus and Grameen Bank jointly received the Nobel Peace Prize.

While the role of government has been explained however, other stakeholders have work to do. Multinationals and big businesses must say No to business as usual. The focus should not only be about making profit, its high time they also began to focus on the people and the planet. Churches and other non government organizations should also be committed to empowering the poor. Individuals should also support small businesses by patronizing them.

Let us conclude this write up with a quote from a book entitled The Universal Hunger for Liberty. Why the Clash of Civilization Is Not Inevitable written by Michael Novak “The hundreds of millions of poor persons in the world who today are unemployed or underemployed can rise out of poverty only through private-sectors jobs. Most of these jobs, necessarily, will have to come from small businesses. Most of these small businesses will, of necessity, be indigenous. Every nation’s most important resource is its own people. Every effort must be bent to match this precious resource with institutions that allow the multiple talents of people to come to flower. It is a great crime when a nation represses the creativity of its own people.”

Written by Tosin Badeniyi PhD

Tosin Badeniyi PhD

Tosin Badeniyi,PhD, is a Food Scientist and Senior Lecturer at Durban University Of Technology, South Africa. He is passionate about Innovation and Youth Enterprise, He has authored two books: You Can Have 360 Degree Excellence & 2.Innovation and Investment: Step by step Guide To Create Wealth

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About Tosin Badeniyi PhD

Tosin Badeniyi,PhD, is a Food Scientist and Senior Lecturer at Durban University Of Technology, South Africa. He is passionate about Innovation and Youth Enterprise, He has authored two books: You Can Have 360 Degree Excellence & 2.Innovation and Investment: Step by step Guide To Create Wealth

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