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 II

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