The Challenge of Backward Capitalism for Development Planning

For sure, camels, cars and airplanes can all travel from point A to B. But controlling for everything possible, there is a vast difference in the rates of speed between these three modes of travel with a clear advantage going for the airplane. What this scenario illustrates is that the potential traveler with an urgent need to arrive quickly at a destination would, in all probability, choose to do so by an airplane as opposed to a car or a camel.

For a post-colonial African society like Ghana, choosing to make the so-called ?private sector? the conveyor belt for development is like opting for a camel as a mode of travel as opposed to an airplane, relative to the urgent need for transformation of its political-economy. In common parlance, ?a decorated donkey is still an ass.?

Since taking office almost two years ago, the New Patriotic Party, NPP, government of Ghana has not demonstrated any ambiguity about its preference ?to make the private sector the engine for development.? In the well of Ghana Embassy in Washington, DC, senior officials of NPP, including President John Agyekum Kufuor, Senior Minister J. H. Mensah, Minister of Finance Yaw Osafo-Maafo and the Minister of Economic Planning and Regional Integration, have all declared the so-called private sector as the engine for development of the country.

Given the general poverty of productive capacity characterizing Ghana?s political-economy, the interest of this article is to discuss why making the so-called private sector the engine for development a weak and inefficacious approach.

?Government does not create wealth,? Paa Kwesi Nduom, executive member of the Convention Peoples Party, CPP, told his audience August 10, at the Ghana embassy in Washington, DC. Acting in his capacity as chairman of Ghana?s National Development Planning Commission, NDPC, Kwesi Nduom demonstrated his preference for NPP?s economic thinking by declaring that the formulation of a vision for the country is to make the private sector the engine for development.

When asked in open forum to explain what he meant by the ?private sector?, Nduom sidestepped the question and ignored this reporter in an arrogant manner. When H.E. Alan Kyerematen attempted to answer the question about the ?private sector?, his deputy, Francis Tsegah prompted him to cease talking to this reporter. I have not given up on my inquiry into the identification and definition of the so-called private sector that qualifies to be the capable engine for Ghana?s development.

Ghana?s development in the period following independence was on target. Under the able leadership of Kwame Nkrumah, the approach towards development was based on total mobilization of national resources for equal distribution through utilization of the political power of the state, as a state. With that approach, all of society was seen to be the engine for development; that approach ended after 1966 when Nkrumah?s government was deposed militarily.

As Ghanaians and the world know today, the course of development in Ghana and the rest of Africa has been on a downward slope since the 1970s, within the context of global political-economy.

In the light of post-1970s decline of development in Africa generally, I asked Mr. Nick Stern, World Bank Chief Economist and Vice President for Development Economics to explain, at a recent press encounter, why he thinks a region of the world where ?most people are poor? would have the capacity to develop the private sector. His response on Wednesday, Dec. 11, at the Bank?s premises in Washington, DC, was conditional. He explained thus, ?If the climate for investment gets better, that affects most importantly and quickly small and medium-size firms ? people who are fixing cars or fixing bicycles, people organizing basic transport, the ordinary kind of retail activities, the kind of activities that support agriculture and so on. People start to make investments in those areas, small farmers and small entrepreneurs, and those can be very significant in driving growth.?

Chief Economist Stern?s prescription for Africa brought to mind immediately a recent characterization of NPP government?s development approach by a fellow Ghanaian, as ?puerile offering? with respect to cassava starch production and other non-starters.

Even ?if the climate of investment gets better?, Stern does not contemplate manufacturing, as opposed to ?fixing? cars and bicycles; not making things, but rather buying and selling as in ?retail?; and not about development, instead of ?growth?. These are the types of offerings the ?talented? NPP government plans to present to Ghanaians, with the support of CPPist Kwesi Nduom. What a disastrous perfidy, to say the least.

Given conditions of the 21st Century global political-economy, what the NPP government is planning for Ghana?s development is like riding a camel in a race in which other competitors are piloting jet planes.

For the truth be told, ?private sector?, typically, is a wimpish terminology used by conventional thinkers to describe the socially exploitative and unproductive ?business? segment of the petty bourgeois ruling coalition. The very survival of this ?business? fraction of the ruling coalition is dependent, characteristically, on a network based on knowing a politician who calls a banker to facilitate personal, as opposed to business loans.

Elements within the ?business community? happen also to be the conduit through which members of the political segment of the ruling coalition siphon stolen public resources by virtue of their access to the power of the state, as a state. In this instance, when the ruling coalition loses its hold on the political power of the state, the reigning favorites of the ?business community? collapse, making way for a new crop of politically connected crop of unproductive exploiting group. The reason for the cyclical collapse of the post-colonial Ghanaian ?business community? (a.k.a ?private sector?) has been that generally, the ?wealth? created by elements of this class fraction is identified by such indicators as the number of spouses, concubines and children possessed, the types and number of cars and houses owned and so forth.

Thus far, it is important to point out that the ?private sector? described above, does not include the poverty stricken, rural dwelling peasants who produce the bulk of national revenue from their patches of cocoa farms. It does not include also the exploited laborers who travel underground, at the risk of their lives, to dig for gold, another major source of national revenue.

In deed, when conventional thinkers and planners of national development of Ghana talk of the private sector, the rest of us know they don?t have our poor farmers and laborers in mind; what they mean, in reality, is the urban dwelling economic segment of the ruling class coalition.

In spite of inherent contradictions, late capitalism has been the most materially productive system of social organization. Unfortunately, the post-colonial African segment of world capitalism, so far, has been the least productive, often hitching its fortune on corruption with the connivance of elements of the political ruling class. It is in this sense that the mode of production in post-colonial African societies, Ghana included, tends to fit the description, ?backward capitalism?, characterized by the dominance of state-sponsored ?business community?.

Productive capitalists in business count their fortunes in such empirical indicators as the number of workers employed, capacity to expand, credit rating, value of traded stocks and so on. Productive capitalists tend not to be in business for profit, but for more and more profit, requiring a capacity to invest and re-invest for the business unit to have longevity of existence for the benefit of succeeding inheritors. State-sponsored backward capitalists tend to be buried with their businesses when they die.

Anybody who thinks the ?private sector? in a society characterized by ?backward capitalism? has the capacity to be the engine for development, needs to do some serious rethinking. After all, if ?government does not create wealth,? it must stand to reason that it must not be in the business of creating the ?private sector? which is supposed to create wealth. The men who facilitated enhanced capacity for industrial mass production with the introduction of the conveyor belt, were not the products of any government?s creation. Certainly, governments in successful capitalist societies did not start by doling public funds, like sinecure, to the idle rich.

What remain in favor of Ghana are the sound principles for nation building and development laid down by our founding father, Kwame Nkrumah. What sincere, people-loving leaders of Ghana can do to redeem the country from the doldrums of a backward political-economy, is to fall back on the development principles initiated by Nkrumah, based on total mobilization of national resources through the absolute power of the state, for equal distribution to the citizenry ? ?fee-free compulsory education? in deed, not empty words.