By Henry Kyambalesa
The purpose of this article is to determine whether calls by some bourgeois (rather than ‘proletarian’) socialists and their political parties in our beloved country to re-introduce socialism as the national ideology is actually consistent with the country’s national ideology, which we can discern from Article 10 of the Republican Constitution (Amendment) of 2016. The Article provides for the following:
(1) The Government shall create an economic environment which [shall encourage] … individual initiative and self-reliance among the people, so as to promote investment, employment and wealth.
(2) The Government shall promote the economic empowerment of citizens [in order for them to] … contribute to sustainable economic growth and social development. [And]
(3) The Government shall promote local and foreign investment and protect and guarantee such investment through agreements with investors and other countries.
From a layman’s point of view, these three Clauses of Article 10 of the Republican Constitution (Amendment) of 2016 do not provide for the introduction of socialism or communism in our beloved country; rather, they seem to be designed to steer the country’s economy in the direction of a market-based national economy. Therefore, Zambia’s current and undeclared national ideology can be said to be a “pseudo free-market ideology.”
The ideologies of socialism and communism are clearly not consistent with our beloved country’s current national ideology, which provides for local and foreign private investments, and guarantees that such investments are protected by the government.
- A Historical Brief
During the UNIP era, implementation of socialist policies increased our country’s public-sector borrow¬ing and government spend¬ing to finance the operations of state companies, and the operations of their subsidiaries, especially in times when they were not able to generate profits
Whitworth (2013) has summed up the financial situation which our beloved country faced between the late 1960s and 1991 in the following words: “[Virtually] … all resources were devoted to wages, debt service, subsidies … and bailing out parastatals.”
The country’s socialist policies barred both local and foreign private inves¬tors from certain commer¬cial and indus¬trial sec¬tors of the countr-y’s econo¬my and recom¬mended the crea¬tion of state compa¬nies to operate in such sectors of the economy from the late 1960s to 1991. The poli¬cies—which former presi¬dent, Dr. Kenneth Kaunda, promul¬gated through his April 1968, August 1969, and Novem¬ber 1970 add¬resses to the UNIP Nation¬al Coun¬cil—ushered in an era of state enter¬prises.
Naturally, the monopolistic position enjoyed by both state companies in the country’s economy culminat¬ed in com¬placence and gross ineffi¬cien-cy be¬cause, in the absence of competi¬tion, they did not find it neces¬sary to seek innovative ways and means of improv¬ing the quality and qua-ntity of their product offerings.
The rampant commodity shortages which the coun¬try experie¬nced du-ring the UNIP era were largely a direct result of the soci¬alist policies of the government of the day.
- Repudiation of Socialism
Essentially, the term “socialism” refers to an economic and political ideology whose premise is for state ownership of the means of production and distribution, including land and the various forms of capital, such as raw materials, financial assets and institutions, manufacturing facilities, assembly plants, machinery and equipment, transportation facilities, service centers, and retail outlets.
Two historical events signaled the end or rejection of socialism and communism as alternatives to the market-based socioeconomic system in the world’s quest to improve humanity’s socioeconomic vistas; that is:
2.1 The introduction of perestroika and glasnost in the former Union of Soviets Socialist Republics (USSR) by the Mikhail Gorbachev administration in 1987, and the eventual break-up of the USSR on December 26, 1991; and
2.2 The worldwide quest for economic liberalization over the last 40 or so years by countries which have had socialist or communist national economies.
Note: The term “perestroika” refers to the profound reorganization or restructuring of the system of centralized planning and management of the entire economy of the former Soviet Union initiated by Mikhail Gorbachev (then leader of the Soviet Union) during the late 1980s. Linked to “perestroika” was “khozrachot”—a concept or principle that provided for the following: (a) gradual elimination of subsidies, price controls and foreign exchange controls; and (b) conversion of state-owned and state-controlled monopolistic enterprises into competitive and independently operated business entities.
Plano and Greenberg (1993:532) have defined “perestroika” to refer to the restructuring of the economy of the former Soviet Union, whose emphasis was “on modernizing the [Soviet] … economy to achieve greater productivity by introducing elements of private enterprise and competition, expanded foreign trade, [creation of joint ventures between local enterprises and] … capitalistic companies of the West, and a goal of a higher standard of living for the Soviet people.”
“Glasnost,” on the other hand, refers to the concept of openness introduced in the former Soviet Union in 1987 by Mikhail Gorbachev, which provided for a general relaxation of constraints on freedom of speech in the USSR. As noted by Hall and Kirk (2002:778), “Perestroika” and “khozrachot” were also introduced during the same year.
Plano and Greenberg (1993:532) have defined “glasnost” as “a Russian term that means ‘openness’ and involves many political, economic, and social changes aimed at opening up Soviet society and making it more efficient.”
And the term “economic liberalization” is generally used to refer to the process of creat¬ing a market-based economy, and is essential¬ly accomplished through the following measures: (a) revocation of exchange-rate, foreign-exchange and price controls; (b) removal of re-strictions on local and foreign private investment; and (c) privatization of a country’s state-owned enterprises.
An essen¬tial outcome of the liberalization of a country’s economy is competi¬tion. This competition, which the Union Bank of Switzer¬land, cited by Reinecke and others (1989:17), has described as “the incentive to do better,” is beneficial to a country’s economy since it gives suppliers of products the incentive to be efficient in order to satisfy the changing and diver¬gent needs and expecta¬tions of consum¬ers.
Specifically, competition in commerce and industry leads to lower prices, high-quality products, and greater variety and abun¬dance of products in a country’s economy. Moreover, competition generally cures the problem of black markets since it entices suppliers to increase their outputs in order to benefit from economies of scale, thereby saturating their domestic market with a wide range of prod¬ucts, while maintaining a portion of their outputs for export markets.
With respect to the privatization of state-owned companies, which could have been either established by national governments or nationalized from private owners, several reasons are cited by White and Bhatia (1998:22) and Muuka and Abubakar (2002:14) as having prompted national governments to sell the companies; that is, to:
(a) Reduce fiscal (or budget) deficits by reducing loss-making companies’ dependence for funding on the national government;
(b) Develop the private sector;
(c) Broaden ownership of commercial and industrial undertakings;
(d) Foster competition and, thereby, boost economic efficiency in commercial and industrial sectors;
(e) Reduce the administrative burden of state-owned companies on the national government;
(f) Gain access to private investors’ capital and technology;
(g) Raise revenue from the sale of state-owned enterprises; and
(h) Comply with requirements imposed by The World Bank and the International Monetary Fund associated with funds borrowed by the national governments to meet internal budgetary shortfalls as well as address critical educational, healthcare and infrastructural needs.
- Issues Associated with Socialism
The following are obvious and relevant issues which are directly related to the idea of re-introducing socialism or socialist ideals in Zambia:
3.1 The conversion of the country’s current mixed socioeconomic system or pseudo free-market economy to an economy based on socialist ideals will require the prospective socialist government to take the following measures:
(a) Impose a one-party political regime on the country by banning opposition political parties.
(b) Criminalize dissent and criticism because, by their nature, single-party political regimes do not tolerate dissent and criticism.
(c) Nationalize and/or expropriate privately owned companies and convert them into state-owned enterprises, because socialism requires that the means of production (including land and the various forms of capital, such as raw materials, financial assets and institutions, manufacturing facilities, assembly plants, machinery and equipment, transportation facilities, service centers, and retail outlets) must be publicly owned. And
(d) Imposition of price controls, which, in the following words of Sanderson (1993:2&4), can cause or exacerbate commodi¬ty shortages in a country:
“Price con¬trols have the effect of discourag¬ing supply while en-couraging demand. The inevita¬ble result is scarcity of commodi¬ties; and when there is scarcity, you always get people who buy up commodities wherever they can and resell them on the black mar¬ket. In Zambia, we call them ‘black marke¬teers’. It is a useful term, for it puts the blame upon them rather than the authori¬ties.”
It is perhaps important to cite potentially good reasons why countries with economies based on socialist ideals impose price controls on commodities. In Tanzania during the 1970s, for in¬stance, the goals of price control measures instituted by the government included the following:
(a) To prevent the income of peas¬ants and workers from being affected adversely by unneces¬sary and unjustified price increases;
(b) To facilitate the develop¬ment of trade and commerce in rural as well as in urban areas; and
(c) To maintain fair relation¬ships between and among inco¬mes of different sectors of the country’s econ¬omy.
In Zambia, though, the distributive goals of price controls were not explicitly spelt out in the Control of Goods Act (Chap¬ter 690 of the Laws of Zam¬bia). However, the objectives of price controls could be inferred from the rationale for the formal establish¬ment of a government depart¬ment responsible for price controls, as well as the speeches of govern¬ment lead¬ers and the National Develop¬ment Plans.
In this regard, price controls were instituted in Zambia because it was widely recognized that standards of living had to be evenly spread among all segments of society if the country was to achieve well-integrated and balanced economic development. Con¬trol of the prices of essential commodities was, therefore, conceived of as one sure way of ensuring that basic necessities of life were to be accessed by a larger segment of the countr¬y’s people.
3.2 State-owned companies to paraphrase Muuka and Abubakar (2002:16), can (and have) become vehicles for embezzlement and bribery for personal aggrandizement, often at the expense of the implementation of aid-financed projects. Besides, they can foster the development of cronyism through patronage at the highest levels of government.
Moreover, they can bolster the siphoning-off of public resources for party, political or factional purposes, as well as trigger the packing of public enterprises with supporters of the ruling political party without regard for genuine personnel requirements.
3.3 Socialism and communism greatly depend on a national government’s suppression of civil liberties, and on authoritarian rule by the government—what is referred to in the literature as “dictatorship of the proletariat.”
3.4 In socialist countries, constraints on the process of innova¬tion, as Goldman and Simon have discerned, are ideologi¬cal in nature; and since socialist ideology re¬gards S&T knowl¬edge as belonging to all the people in a given country, it treats such knowledge as a free good. This underval¬ues the knowledge and, as a result, removes the necessary incentive for cre¬ativity and innova¬tion. And
3.5 Restrictions on, and prohibition of, private investment which are characteristic features of socialist countries can stifle competi¬tion and innova¬tion in com¬merce and industry in the national economy, which, as stated elsewhere in this article, can lead to lower prices, high-quality products, and greater variety and abun¬dance of products in the economy, as well as cure the problem of black markets.
- A Plea for a Social Welfare State
What Zambia needs in its quest to uplift the standard of living of the majority of its people is neither socialism and its utopian ideals nor crude capitalism and its zealous quest for profit maximization; rather, it needs to strive to create what is referred to as the “social welfare state”—that is, a dynamic free-market economy that has a human face.
More precisely, a “social welfare state” is a national economy that simultaneously provides for a highly competitive business system and an effective mechanism for re-distributing wealth to the needy.
Countries which have succeeded in meeting the basic needs and aspirations of the majority of their people—such as Finland, Australia, the United States of America, Japan, Canada, Luxembourg, Norway, Switzerland, Sweden, Denmark, Ireland, the Netherlands (Holland), and Germany—are essentially social welfare states!
When German philosophers Karl Marx and Friedrich Engels released “The Communist Manifesto” (originally referred to as the “Manifesto of the Communist Party”) in February 1848, the economies of Western Europe were predominantly administered through crude capitalism. This explains why some portions of The Communist Manifesto, as Moore (2019) has noted, feature “their ideas on how capitalist societies of the time would eventually be replaced by socialism.”
By the way, Germany today has a market-based economy in spite of the fact that it is the birth place of Marxism. And Karl Marx was expelled from Germany and had to seek lifelong refuge in London, where he died in 1883.
In fact, one may even wonder whether the socioeconomic conditions that existed in Western Europe at the time when Marx and Engels were propounding, expounding and articulating their theories actually exist in modern Zambia, and whether or not the country can be categorized as being a “capitalist society” per se.
Ultimately, the revolutionary transition of capitalism to socialism and finally, to communism that Karl Marx and Friedrich Engels envisioned will apparently never come to fruition due the emergence of welfare capitalism and the social welfare state.
In our quest to improve the livelihoods of the majority of our people, therefore, it is perhaps important to keep in mind the following caveat provided by the late F. W. de Klerk (1993:16) regar¬ding the pursuit of socioecono¬mic development:
“The reality is that the economy does not grow from political slogans … [basic] require¬ments for eco¬nomic growth [and development] are peace and stability, free enter¬prise, imagi¬native entrepre¬neur¬ship, efficient and frugal govern¬ment, innovative and caring manage¬ment, a well-educated and motivated work force, and a lot of hard work.”
In all, it is perhaps important to remember the fact that social, political and market freedom in a country decreases, while government coercion increases, if the country decides to abandon a market-driven socioeconomic system and adopt a state-planned socioeconomic system. Besides, consumers’ on, and expectations of, business institutions are greater in market-driven economies than they are in centrally planned socioeconomic systems.
This should perhaps be expected considering the fact that consumers in centrally planned economies are mainly served by coercive governments and monopolistic, state-owned companies, which are ge-nerally insensitive to their basic and special needs and expectations.