I spent last week in Calabar discussing principles of “Africapitalism” with a group of economists, entrepreneurs and social scientists convened by a capitalist called Tony Elumelu. Initially I wanted to decline the invitation because of the damage associating with capitalists could do to my street credibility. I have spent a good deal of my life castigating the evils of capitalism and have no intention of stopping so associating with Tony Elumelu’s staff, friends and ideologues was not something I could jump on without caution. When I heard that some of my own type of people such as Professors Patrick Wilmot, Olu Ajakaiye, Moses Ochonu and Christiana Okojie would also be there, I decided it was worthwhile attending to give them a fight for their money.
Tony Olumelu and I did not read the same type of literature on the definition of capitalism. The literature I read taught me that capitalism is a mode of production in which the means of production such as factories and other facilities, machines, and raw materials are owned by a small group of people known as the capitalists or bourgeoisie who get the majority – the workers or the proletariat to work for them. According to Karl Marx, the economic interest of the capitalist is to pay the worker as little as possible, in fact just enough to keep him alive and productive. The workers, in turn, come to understand that their economic interest lies in preventing the capitalist from exploiting them in this way hence the permanent antagonism that would lead eventually to the victory of … okay, lets not get into that. The key issue however is that capitalism is all about exploitation of the worker and stupendous wealth of the small capitalist class. I still believe that the huge income inequality in today’s capitalist society is as bad, in fact worse than in the times of Marx. As I have no current alternative to capitalism, I felt, why not, I could still go to Calabar, the cleanest Nigerian city and listen to Elumelu’s ideas.
For Tony Elumelu, Africapitalism is an economic philosophy he personally developed predicated on the belief that Africa’s private sector can and must play a leading role in the continent’s development. His staffers explained to us that its key principles are the development of entrepreneurship to unlock the power of individuals to create and grow their business ideas into successful companies. Engaging in long-term investments targeted to deploy forms of “patient” capital that creates greater and broader economic value as opposed to merely the extraction of resources. The targeting of strategic sectors for investment such as agriculture, power, healthcare, and finance so as to create broader economic and social value. In other words, he supports a form of capitalism that is less rapacious and more focused on promoting broad based capitalist development that would provide inclusive opportunities for the greatest number. I do not really have a quarrel with that.
His notion of Africapitalism is strongly anchored on the development of entrepreneurship targeted at young Africans. He is putting his money where his mouth is by offering to spend $100 million over the next ten years providing seed capital to 10,000 young Africans so that they are empowered to be rich capitalists and provide jobs for others. As he puts it; “it will enable our young people to create their own jobs, become employers, and take charge of their futures, instead of letting the future happen to them.”
The arena of struggle at the retreat was on the role of the State in today’s Africa. The market fundamentalists argued that the role of the State should be limited to creating enabling environment for business to flourish. They were hard-core believers in the dictum that the State has no business in business. Our side of the divide contested this perspective. The State, we argued is an expression of the popular sovereignty of the people, all the people. It therefore has a broad role in directing society and its resources towards promoting the welfare and security of all. The government as an agent of the State must therefore mould institutions to serve the common good, which business as a community never thinks about until external pressure forces them to. The market is driven by the profit motive alone and although it could drive development through adding value to the production system, it also produces misery and huge distortions in terms of ownership of resources. The State has a role therefore of constraining capitalists and their profit motive to improve equity in the system, including ensuring that workers are paid a decent wage.
We also questioned the limited understanding of the history of capitalism by the market fundamentalists. It is not true, we argued, that capitalist entrepreneurs simply use their capacity for innovation to devise novel means of value production. Innovation needs fundamental research in science and technology as a source of what is possible, and while capitalists fund applied research, it is the State that provides the resources and institutional mechanism for fundamental research. The State also through its basic function of taxation captures huge flows of financial resources, which it uses for the production of public goods but also for directing resources to capitalist organisations to boost their investments and production. Much of the American capitalist structure and process is for example largely dependent on the military-industrial complex, which is dependent on State funding and support.
The reality of capitalism is that the capitalists looks for the biggest profit and if it comes from governmental corruption, that is where they will be rather than in agriculture and other productive strategic sectors. Immanuel Wallenstein reminds us that the bourgeoisie has no developmentalist mission and more often than not, they avoid strategic sectors such as agriculture, industry and transportation. It is for this reason that the key to the development of capitalism is not, as is often thought, in the hands of the capitalist but in those of the State. The construction and modernisation of the State has led it to capture financial flows which in successful capitalist States is then directed to the strategic sectors. To transform the nascent market economy into capitalist development, specific forms of accumulation must be groomed and directed by the State. Capitalism has been slow to develop in Africa because the business class is allowed to make money through corrupt deals rather than productive investment. It is important to recall Max Weber’s analysis of prebendalism in China where he shows that for a long time, “booty capitalism” blocked the development of rational entrepreneurial capitalism, which in the Occident found its specific locus in industry. Capitalist development requires the transformation of what Marx called primitive accumulation of capital through rents to capitalist accumulation, which takes place in the productive system through economic means. The problem in contemporary Africa has been that the appropriation of rent was not leading to the enhancement of capitalist production, it was producing a patrimonial state in which access to State resources was more important than production. One African capitalist has shown the way forward; Aliko Dangote is showing today that vast accumulation is possible, and indeed very profitable in capitalist production itself. I do hope Elumelu’s entrepreneurs would be looking at that path and the State would play its own role, such as ensuring producers actually have access to credit rather than just traders and speculators. Meanwhile, if Tony Elumelu himself would add Karl Marx to his already impressive reading list, we can have more to talk about as he progresses in his determination to produce entrepreneurs for the strategic and productive sectors of the economy.
