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 too was portioned, by means of a brick war, into East Berlin and West Berlin.
Having been trained and/or practiced in the USA and the UK for 40 or so 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 lady 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 enjoyed no such relationship with Malawi. It was taboo, under Kamuzu, to be associated with communism/socialism.
A number of African leaders, however, found the socialist philosophy very attractive, not least because it appeared to consider every human being as 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, Angola all had their beginnings, as independent nations, in socialism. Under Kenneth Kaunda, Zambia experimented with a local version of socialism called Humanism.
The situation is a lot more blurred now. Market based economic systems appear to have spread even to those countries that were once staunchly communist. By market based economy is meant one where 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 make sure that there are enough goods and services in the economy to go round to everyone. Scarcity of any commodity is strictly the fault of Government.
One communist country that has embraced a market based economy is China. 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.
When I last checked, Malawi was still a market based economy, albeit amid intense pressure on Government to pursue socialist policies. Many programs run by Government, among them AIP, 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; Government simply yields to such demands.
It is an undeniable truth that a significant portion of our populace finds themselves incapable of availing certain services independently, thus necessitating the intervention of the Government. The crux of the matter lies not in the necessity of aid, but rather the most efficacious manner form of assistance. Presently the Government finds itself compelled to allocate funds for the fulfillment of public needs. Upon reflection, it becomes evident that the Government, in fact, lacks a sustainable revenue stream, relying chiefly upon the taxation of its citizens. The 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, regrettably, lacks the 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. Conversely, 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 aimed at enabling them to transcend perpetual deprivation. They ought to be gently guided towards self-sufficiency through assistance that fosters long-term independence.
I find the Dzombe philosophy very useful in this respect. Dzombe 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, subsequently, use the proceeds to set up a similar facility elsewhere. This is a brilliant vision for Malawi.