The point being made here is that the etching of Marx’s face on TIME magazine does not in any way signify the death of capitalism, free markets, deregulation and liberalisation. Neither does it foretell the end of globalization. The article, “Rethinking Marx”, which KK extolled simply made references to the yawning inequalities brought about by globalisation. It also points to the fact that from Washington to Vladivostok, the task of warding off the current financial collapse and economic contraction is now the overwhelming priority of global leaders, central bankers and regulators everywhere. “Solutions,” TIME writes, “differ, but all agree that the current situation is both dire and extremely perplexing: nobody younger than 80 has experienced such a rapid decline in global confidence and economic activity. Markets have failed, and in so doing they have destroyed the conventional wisdom about how to run an efficient economy.”

Yet the same article also admits that there are several aspects about today’s mess that Marx could not have predicted. Capitalism for all its failings today, TIME states, is far removed from the cruder version that Marx analysed, before the advent of pension and unemployment systems, medical insurance and health and safety legislation – policies, which I must add, are implemented by the bastions of capitalism and are all welfarists in nature. Most critically, Marx in all his writings failed to forecast the booms and busts cycles that all economies, the global one inclusive, go through. The same article further quotes Beatrix Bouvier, the director of the three-storey white washed house where Marx was born in Trier, Germany that serves as museum for tourists. She describes him as “contested and contradictory. We show him as being many-sided.” It is a view that upsets true believers of Marx, who sometimes send letters of being “counterrevolutionary,” the magazine quotes her as saying.

Yet, in the same edition to which KK made no references, there is another article titled, “Potholes on the Path to Prosperity”. This focused on the merits and demits of globalisation, how deregulation, liberalisation and the opening of markets especially by poor developing nations increased investment and trade generated new jobs, lifting hundreds of millions of people out of poverty. All this became possible when these countries abandoned socialist programmes or state-dominated strategies of the 1950s, 1960s and 1970s, and adopted old fashioned capitalist tools by encouraging enterprise, exports and foreign investments. The result indicates TIME is that in 1981 when nearly 80 per cent of East Asia lived on less than $1.25 a day, by 2005, only 18 per cent did. Compare that to sub-Saharan Africa where countries failed to connect to the global economy as successfully as Asia. Here the poverty rate remained stuck at around 50 per cent from 1981 to 2005.

But the spectacular growth experienced by Asian countries for over a decade and more recently sub-Saharan African economies has not trickled down to the generality of the population. Much of the growth has been export driven, and prosperity was limited mostly to urban dwellers and migrant workers who left their farms and rural communities for the cities. Added to that, the drastic fall in consumer spending in the West which imports the bulk of the goods made by poorer nations has led to idle capacity utilization that drove much of the growth experienced in developing countries. In Asia and Africa, TIME notes, leaders at present fret that large swaths of their populations could be plunged into destitution. In essence, amid the financial meltdown, it is nations that benefited the most from the global economy that are suffering the most.

Despite the dark clouds hanging over the developing world, none of these countries have shown any inclination to discard free markets and globalization. The reason is not far fetched: though the export model may be under scrutiny at the moment, it is still the right path to drag people out of poverty. However, governments in developing countries, Nigeria inclusive, must focus on key sectors of the economy such as healthcare, education and agriculture to improve human capital and alleviate poverty.

In the past, I have advocated that the Federal Government expends less time, resources and energy in sectors that are better handled by the private sector. I still maintain that position because deregulation, liberalisation and enhanced competition leads to the creation of jobs and ushers in a new middle class. Such sectors include energy, telecommunications, provision of infrastructure in urban centres such as roads, light rail transportation, airports and sea ports. Urban cities such as Lagos have the capacity to pay for certain goods and services provided by the private sector. The savings made by government can then be channelled to under-funded sectors such as agriculture and rural development.

Just the same, I have charged into KK’s office on many occasions and held long, boisterous discussions over the efficacy of energy subsidies. I have asked him why he does not redirect his passion against the removal of fuel subsidies towards the agricultural sector which needs government aid more than any other sector in this country. The problem, if I may fathom a guess, is that agriculture does not get as much media coverage as petrol price hikes. Even though pontificating on the latter may appear popular, it is actually the former that is populist because it touches a wider spectrum of the populace and has the capacity to lift the rural poor out of poverty. It is from here that the income gap can be narrowed and a middle class begin to emerge. With a new middle class, governments can strive to stimulate domestic demand and shield their economies from global economic shocks when they occur.

Fortunately, TIME magazine in the same edition advocated the same policies I have written about in the past. It states: “Governments have become overly dependent on export-led growth, in the process ignoring the needs of those not engaged in industries connected to world trade and investment. That has been especially true in the emerging world’s agricultural sectors. One of the forgotten factors underpinning some of the most noteworthy poverty-reduction success stories in countries such as Taiwan and Vietnam has been an intensive programme of rural development, including land reform and investment in roads and other crucial infrastructure for farmers. But many developing nations have chosen to import food and industrialise rather than invest in agriculture – with devastating consequences.” 

  
That the Nigeria economy is tottering on the brink of contraction, is not because it opened up its economy to market forces, privatisation, liberalisation and deregulation. On the contrary, it has benefited tremendously from them. The banking and financial services sector, telecommunications, aviation, construction and real estate, oil and gas, and even the stock market, are all living examples of the spirit of enterprise and free markets. But that does not mean that improved regulation and the enactment of anti-trust and competition laws are no longer required. Indeed they are; not just for the protection of consumers, but also to strengthen the institutions that operate in these sectors.

As such, I get very worried when KK and others use the nationalisation of financial banks and the meltdown in the global financial system as a reason for us to turn back the hands of time. Nationalisation of the banks was a major mistake because it failed to rid the institutions of the toxic assets in their books. It was a panic measure that developed nations are quietly regretting. Most significantly, it failed to restore confidence in the system and provide badly needed credit for individuals and businesses. It is for this reason the US and other OECD countries are planning to reflate their economies through stimulus plans.

Besides, the global economy has always gone through periods of booms and busts. This is not the first recession or depression it will encounter. Neither will it be its last. The utopian world which Karl Marx envisaged never came into being, primarily because it was unrealistic and created more inequalities than capitalism can ever muster. Humans by their very nature will turn to anything that offers redemption in their times of need. But redemption can be found in the hard choices that we make in the social and economic realms.

As Professor Paul Kennedy, a professor of history and director of international security studies at Yale University, wrote recently in the Sunday Times of London, the blunt fact is that all economies today are threatened with being torn in different directions. In an ideal full Keynesian vision, social and economic policies would march hand in hand – a strong social fabric, with solid healthcare and education systems, would provide a powerful underpinning to a competitive economy; a flourishing economy would in turn support modern infrastructure, profitable banks, a steady rise in living standards and a reduction in the national debt.

The government, John Maynard Keynes argued, would orchestrate the various parts, producing a harmonious result, and all will be well. But more often than not, the plan to repair a system’s social fabric is contradicted by the urgent need to achieve fiscal stability and international creditworthiness. That is where the markets come in, through the injection of private capital.

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