Month: March 2015
Capitalism and politics II
Imagine if most of our politicians are like Atiku, that is, they have the same entrepreneurial drive as he does. It isn’t that we won’t have challenges, it is more likely that we will have a good kind of challenge; as for one we will have less unemployment and with that comes less income inequality. We would have moved on from the challenge of creating wealth to redistributing and reducing wealth/income inequality – an infinitely better problem than what we have on our hands today.
The issue here isn’t that cabal exists or that having more Atiku type politicians will create a different kind of lobbyist problem. Lobbyist groups are a global phenomenon, a cost of capitalism. The utopia isn’t eradicating corruption but reducing its mismanagement and making sure incidences of its occurrence are in favour of the state more often than not. Consider the US, with the influence and control the NRA that gun lobbyist group (or any other powerful lobbyist group) have over America and American politics. The first thing this lobbyist group hold as fundamental is that a strong and successful American economy is critical to their success. The implication of this is that they are always willing to negotiate the extent of their influence if holding on to it will compromise the American economy especially relative to other world superpowers. The way to think about it is this; i) they want America to have a strong military and sovereignty ii) they want America to have a “too much money” problem i.e. a strong economy, iii) they want to be able to influence how that money is shared iv) they recognise some income equality is necessary so they don’t have a domestic problem that could compromise the strength of the economy.
What makes the American cabal successful is that the opportunity to be successful is open to anyone and everyone. Unless absolute and ultimate power is being discussed, anyone can become a millionaire or billionaire – the system is fair to all – you don’t have to come from a powerful family (Eg Steve Jobs – Apple, Mark Zuckerberg – Facebook, Floyd Mayweather – Boxer, Dr Dre & JayZ- Entertainer, Michael Jordan – Sports, Bill Gates – Microsoft, Chamillionaire – Entertainer cum venture capitalist, Evan Spiegel – Snapchat, Jacob Arabo – Jeweller, Michael Dell – Dell PCs, Sam Walton – WalMart – are they all from influential families?). Even more importantly the cost of a decent standard of living isn’t astronomically high.
Contrast the above to the Nigerian cabals and politicians and you can see where we‘re failing ourselves. First, our military have decimated and compromised themselves and our politicians have been quite happy to maintain the trend. Second, our cabals are quite happy to sacrifice the Nigerian economy so long as their buck is assured. Thirdly, unless you are from an influential family or have a benefactor that is from an influential family then access to (or even opportunity to have a go) real wealth is beyond you. Fourthly, to have a decent standard of living, you to have to be a mini local government. We clearly have a structural problem and an unsustainable economic system.
We know that some if not most of our politicians are evidently corrupt. We know how much they appropriate to themselves. For example, OurNASS members are the best paid in the world – (shocking, I know) – but what do they spend all of that largesse on? Have any of them established businesses to take advantage of our inefficient market where supernormal profits is almost a given? We know it is difficult for SMEs to gain access to finance. So did any of the wealthy OurNASS politicians come together to form a private equity firm or venture capital to finance SMEs and make super profits? The inadequacy of housing units in Nigeria is known to most, but have our politicians come together to form a low cost property development company and profit from the property sector?
Let’s imagine that the members of OurNASS commit say 10% of the annual N150b they get to entrepreneurial use by pooling resources and establishing companies, that is N15b annually. With that amount of equity, they could easily obtain a long term financing facility from banks that matches the equity committed to business – this could easily raise up to N120b over the current parliament. Now imagine how that sort of cash influx could have ignited our property and construction sector, the number of job it would have created, the attendant wealth, the various value added service firms that will spring up or even the securitisation banks could have generated to create a vibrant mortgage market as houses become affordable. Now extend this to other politicians at state level and the famous security votes of executive governors. Let’s not even talk about the monumental failure of our financial intermediaries to create products that should be tapping into and lobbying to monetise this source of capital. We know that our politicians obtain loans, what do they use these loans for? Is there any economic evidence for which they’ve put these loans to use?
In Yoruba, the only word to describe our politicians is ‘apa’ meaning waster, wastrel, squanderer (pick your choose x_x). How can you have access to free cash, be in charge of creating enabling laws, have little to no competition from other sources of business capital and yet the best you and your advisers could come up with is stash money abroad, buy ‘luxurious’ properties at over-inflated prices and live ‘babyboy’ lives as the locals call it?
It doesn’t matter whether you support APC or PDP, both parties in equal measure produce absolutely useless politicians. None of them can run a broom producing business successfully, yet we are to somehow trust them to run a whole country? Stop yourself from gobbling their rhetoric for a moment, where is the evidence that they can create a system that can generate wealth sustainably and more importantly equitably? I saw an APC member (early to mid 30s guy) tweet recently that the reason why he’s voting for change is so that his kids will have access to quality education and healthcare in the future. Presumably kids in the states currently governed by APC are already enjoying this and it’s only fair APC rolls it out to the rest of the country? Or APC needs to control the federal government before they can deliver this democracy dividend? If that’s the case, does that not confirm we have a fundamental problem on our hands that without federal control a party can’t do much even at state level?
This campaign season has seen our politicians (APC and PDP alike) promise that they’ll reduce poverty and unemployment. The truth is, they’ve always had the capital and the constitutional backing to do so yet they haven’t. So why are you believing them now?
Capitalism and politics
For an elected official to successfully deliver on good governance, that official needs to either be both a good technocrat as well as a good politician or failing that be able to assemble a good team of technocrats and have demonstrable evidence of being able to lead such a team to delivering good governance. The need to be a good technocrat is necessary so that issues can be understood, appropriate policies formulated, whilst the need to be a good politician will become necessary when political will is needed to implement programs especially when vested interests lobby to the contrary.
There seems to be a dearth of people in our politics with an above average strength as good politicians as well as technocrats. We seem to produce politicians that have strength in one and weakness in the other. Babatunde Fashola appears to be a good technocrat but weak at playing politics. Donald Duke, Kayode Fayemi, Nasir El-Rufai, Nuhu Ribadu etc all appear to fall into the same category as the outgoing governor of Lagos. These are governors/ex ministers that whilst they were delivering some form of good governance couldn’t replicate the same success on the political side so their public careers got truncated – too early. Fashola on the other hand, despite his weakness in playing politics, managed to retain the support of Asiwaju Tinubu by the skin of his teeth otherwise he too would have gone the way of other technocrats. There are others like Adams Oshiomole, Rochas Okorocha, Rotimi Amaechi etc that I find difficult to categorise as having above average strength on either side as they seem to be drifting from one side to the other on average terms at best.
For all of Asiwaju’s faults, he seems to be one of the very few people in politics that can be comfortable whether in the midst of pure politicians or technocrats. This fundamentally is the basis of his on going relevance as a public servant. He understands both divides of public service better than most. Governor Rauf Aregbesola seems to me like someone that has the same potential as Asiwaju but time will tell. Another politician that I rate and this would come as no surprise to those I’ve interacted with on Nigerian politics, is Atiku Abubakar. He seems to be equally able to mix with technocrats as much as politicians. Whilst he has not held executive office for which he was on the top ticket, his public service have been commended publicly by those whose technocratic opinion are noteworthy e.g. Mallam El-Rufai in his comments on public senate hearing held Aug 8-13, 2011 following his stint as director of BPE and the success of National Privatisation Council.
For Atiku, I am disappointed that he hasn’t been able to shake off the corruption tag attached to him by his former boss Obasanjo. This may be due to the possibility that he is indeed corrupt. The man himself has powerful oppositions if not enemies and has been investigated severally even by the US Senate. Besides possible money laundering issues, he wasn’t found guilty of corruption. If after all these investigations, he remains un-convicted in a court of law in any jurisdiction, why does the corruption tag persist? This brings me to capitalism and politics – my main point of discourse.
Capitalism thrives best in a market that is inefficient and with at least semi-strong institutions. It is within an inefficient market that capital has its best chance of making abnormal profit or high return for a given level of risk. Semi-strong institutions such as stock exchange regulatory authorities or the judiciary are equally important so that instances of injustice can be enforced in ordinary arms length business transactions or settled out of court with minimal cost and time. It is this inefficiency and weak to semi-strong institution that makes or should make Nigeria the darling of those with real capital. If you have good capital, and understand the Nigerian market well, you’re very likely to make supernormal profit. If you then have political clout with above average understanding of technical issues, then you stand an even better chance of making uber supernormal profit. Of course with political clout comes the likelihood of being tagged as corrupt given the weakness of the system. Of course, when the market is inefficient and institutions are weak, one shouldn’t be surprised if a corrupt society is the outcome. This is a global phenomenon rather than an African let alone a Nigerian one. It may be the case that the corrupt or those with capital are ensuring that our institutions remain weak so that they can keep making supernormal profits.
What I find most interesting is that all of Atiku’s businesses are in industries where he can hardly be a monopoly, meaning his companies have to compete fairly with others in order for them to be and remain successful. This implies that industries in which his companies operate will at least have a chance of benefitting from any policy he lobbies for. For example, he has a sizeable interest in farming and related agro-services, if he lobbies for supportive policies for his farm business, the likelihood is that all businesses similar to his will benefit. This preference for business and market competitiveness can also be projected to his main business interest – INTELS – the oil services firm. Whilst Atiku does not get involved in the day to day running of his businesses, it is clear to all that he is astute at working with others ensuring that both they and he benefit from the alliance. Ultimately, the source of his wealth is known to all.
In contrast, almost all other politicians in Nigeria, we just know that they are wealthy, the source of their wealth remains a mystery. Most if not all of them can’t replicate the same level of wealth or hope to survive in the private industry, even Mr. President. In an economy where market inefficiency makes it the dream of those with capital and considering we’ve supported #OurNASS annually over the past few years with N150b, besides buying properties in Dubai and stashing money abroad, what have our politicians done with their largesse? Does how APC and PDP legislators spend their capital not suggest they don’t know how to create wealth let alone redistribute it in a manner that minimises income and wealth inequality? One of the politicians, whose source of wealth is fairly publicly alleged, is Asiwaju Tinubu. Alpha Beta Consulting (ABC), the tax consultant to the Lagos State government (LASG), has been linked to Asiwaju along with others. Alpha Beta is alleged to receive in fees 10% of all taxes it collects on behalf of LASG. When one considers LASG’s IGR, the cashcow that ABC is for Asiwaju in what is more or less a monopoly is staggering. This level of cash generation makes it especially difficult if not impossible for anyone to challenge Asiwaju’s authority or dominance in our godfatherism led politics.
Quite a few of those that are currently financing General Buhari’s candidacy are clearly wealthy and powerful but more importantly have a source of wealth that remains unclear to most Nigerians. This inevitably means they have either benefitted from the inefficiency of the Nigerian economy or have been outright corrupt. One could think ‘or both’ but seeing that very few of them have private businesses that can be claimed as their obvious source of wealth we can discount this as an option. So, should this obvious conflict of interest not make us question APC’s “change” message? If those who have vested interest in maintaining status quo are in or around power (with status quo being controlling or influencing power), will things really change? By substituting PDP for APC, will we not just be changing form rather than substance? The point is regardless of what any politician promises us, 2+2 will always be equal to 4, it can never be 5 or 6.
It is with this in mind that, were I based in Nigeria, I’d be voting Kowa and Mrs. Oluremi Sonaiya for President. I’ve read a lot of commenters turn up their noses at Kowa but I find this disappointing although I acknowledge that every one has a right to their preference. What disappoints me mostly are the reasons given as to why Kowa isn’t a viable alternative. Most voters acknowledge that APC is almost equally as handicapped as PDP given the ease with which weak and sometimes out rightly useless politicians cross-carpet. There’s been so much cross-carpeting between APC/PDP that they could almost be regarded as one. Indeed most voters acknowledge that the circulation of vested interests around Buhari is a real headwind for his presidency should he win. The other reason they espouse is the numbers game. Whilst true that PDP and APC have the advantage of numbers on the other parties, this is only the case because even for all of their glaring faults, people still choose to support them. If you can support APC/PDP with all of their issues, why is it so difficult to support Kowa who are a relatively young party but more importantly with fewer issues and handicaps than the two major parties? Their leadership team consists of ordinary Nigerians from all works of life – no benefactor or national leader – just ordinary Nigerians from various ethnicities coming together on ideology. Does this collection not reflect how Nigerians should gather for democracy’s sake?
What Kowa offers is a real break from the cycle of vested interests. The virtues that some use as basis for supporting General Buhari’s candidacy are not unique to him alone. Can Mrs. Sonaiya not pursue an anticorruption mandate? With her being free from vested interests, is she not more likely to do so? Her aptitude is clearly not in doubt, so will she not be at least equally as capable as General Buhari in grasping policy issues and pursue those that will be of benefit to majority of the populace than a cabal few? Kowa’s manifesto points on federalism, devolution of powers and making education up to SSCE compulsory for every Nigerian child particularly resonates with me. How are these not at par if not better than what PDP and APC offer? Besides the exception of Lagos (even that is only relative to very poor peers), has APC delivered the change they’re campaigning on at state level let alone federal? So on what basis should we then place confidence in their ability to deliver change? We look at Lagos but Lagos is an anomaly; it and APC benefits largely from two things: i) the fact that it was previously the national capital (pre & post colonial) and ii) the stellar governance Lateef Jakande delivered when governor.
It is obvious that PDP has lowered the standard of governance, meaning APC don’t have that much height to scale to gain followership. However, we will be doing ourselves a great disservice if we let APC get by with just the bare minimum. All of their current campaign rhetoric needs to be paired with (legislature and executive arms) their delivery in the states they currently govern. Does it add up or are they just doing needs must? Are they campaigning on record or rhetoric? The two main parties have to at least be made to sweat to get our votes and there’s no better way to do that by supporting a viable alternative in Kowa.
Why I’m Happy That Jesus Died
I’ve been treasuring these thoughts in my heart for a long time, and already decided to share before I realised it’s Lent! Best time to look at this.
I’ve come to realise that each and every one of Satan’s lies is covering something he’s desperate to hide!
I remember tweeting a quote sometime ago about how knowing which lie is holding you bound is the first step in the truth making you free.
When I heard the lie being taught to some of my dear ones, that Christ did not really die, I shook my head and discarded the silly theory. They said Jesus didn’t die, that at the last minute God exchanged him with someone else who now died in His place and God took Him up.
I only briefly wondered, what’s the point of lying that Christ didn’t die? I shrugged. Just another one of Satan’s lies. So “LOL” right?
View original post 750 more words