Africa- Toxic ideology dump

As part of the fall-out from the financial crisis, business schools are now seen as training grounds for what FDR once called malefactors of great wealth–the more prestigious the business school, the worse the malefaction obviously. Columbia University’s Business School Dean, R. Glenn Hubbard, served as chairman of the Council of Economic Advisers under George W. Bush and has been one of the nation’s more intransigent defenders of free market fundamentalism. While it is difficult to rank people such as Hubbard in terms of the harm done to American workers, he surely is a finalist in the competition for evil economists.

Hubbard is a fellow at the American Enterprise Institute, one of the country’s foulest neoconservative think-tanks, and a regular contributor to the Wall Street Journal editorial page where he defended Bush’s tax cuts for the rich, scuttling the Kyoto Protocol on climate change and most recently defended the health insurance industry against even the mildest reforms.

Apparently not content to ravage American society, he has donned a safari cap and penetrated the Dark Continent in order to help the benighted natives achieve prosperity. For those who follow the activities of a-list economists, it should be well understood that “helping the Africans out of poverty” is a must for those aspiring to the Nobel Prize and other honors bestowed by bourgeois society.

Hubbard and fellow Columbia business school professor William Duggan (about whom later) have just come out with “The Aid Trap: Hard Truths About Ending Poverty“, published by Columbia University Press. The book argues that aid to governments and NGO’s does not work and that a new Marshall Plan geared to small businesses is the key to success. While I doubt that anybody who reads this blog will be tempted to waste $22.95 on such nonsense, you can get an idea of what these evil professors propose in an August 2009 article by Hubbard on the Foreign Policy website.  Titled “Think Again: A Marshall Plan for Africa“, it makes the case for bringing Africa “back to life” in the same way that Europe was. Although I have become fairly inured to this sort of rightwing garbage over the years, Hubbard’s article took my breath away. It might have even been enough to make a Goebbels blush.

Hubbard starts from an absurd premise, namely that the African economy is “overregulated” and that markets have never been given a chance:

But take a look at the World Bank’s annual report, “Doing Business,” and you’ll realize that many African economies have never had a business market to fail — thanks to their governments’ dense, unnavigable regulations.

This certainly does not describe the continent’s largest economy: South Africa. Since the ANC took power, it has adopted an economics strategy that could have been drafted by Hubbard himself. The Growth Employment and Redistribution Strategy (GEAR) has embraced free markets for the avowed purpose of creating a local bourgeoisie of the kind that is supposedly necessary for job creation and prosperity. Indeed, it has brought prosperity to the few while the unemployment rate has soared to 23.5 percent. It is doubtful that stringent regulations have led to such a disaster. In fact, the main cause is a collapse of the mining and steel industries attributable to declining exports in a world economy suffering from the hangover brought on by one bottle too many of R. Glenn Hubbard’s snake oil medicine from the Bush years.

The other major economy is Nigeria’s, which is largely dependent on foreign oil companies. 80% of the Nigerian government’s income is from oil, and over half of all oil money comes from Shell.  And the last time I noticed, Shell Oil was not having a problem with overregulation.

The 500,000 tribal Ogoni of the Niger delta in southern Nigeria have watched as their traditional fishing and farming livelihood has been laid waste by Shell Oil’s extraction of oil, with full complicity of the national government, which has allowed large parts of the Ogonis’ homeland to be ruined. The Ogonis’ land has been contaminated not only by oil wells and pipelines, but also by gas flares that burn 24 hours a day, producing intense heat and chemical gas fogs that pollute nearby homes as they render farm fields barren and unproductive. The constant flaring of natural gas also contributes measurably to global warming. Several Ogoni who protested the ruination of their homeland and the impoverishment of their people have been convicted of false charges and executed.

Shell has extracted oil from the Niger Delta since 1958. Shell operates a joint-venture consisting of Nigerian National Petroleum Corporation, Elf and Agip. Shell is by far the largest foreign oil company in Nigeria, accounting for 50 per cent of Nigeria’s oil production. Nigeria generated roughly 12 per cent of Shell’s oil production world-wide in the late 1990s.

According to one observer on the scene, “Rivers, lakes and ponds are polluted with oil, and much of the land is now impossible to farm. Canals, or `slots’, have permanently damaged fragile ecosystems and led to polluted drinking water and deaths from cholera. Gas flaring and the construction of flow stations near communities have led to severe respiratory and other health problems…”

Going from the ridiculous to the ridiculouser, Hubbard next makes the case for colonialism even more unabashedly than Niall Ferguson, or Cecil Rhodes for that matter. Referring to the concerns that pro-business policies would lead to a new colonialism, Hubbard assures his readers that this might be such a bad thing:

“Strong Businesses in Africa Will Be the New Colonialists.”

First, Africa was poor before colonialism, and for many countries, colonialism may well have made Africa richer. There were some exceptions, such as the Belgian Congo in the early 20th century, where forced labor for rubber extraction made the people poorer. But overall, Africans in 1960 were healthier, lived longer, and had higher incomes than Africans in 1900. Ghanaian economist George Ayittey calls the colonial era the “golden age of peasant prosperity” in Africa, when the vast mass of rural Africans joined the world economy for the first time. By 1960, this was even true in the Belgian Congo. The hospitals, ports, schools, railways, and roads of Africa date from the colonial era. Certainly Europeans benefited unfairly from colonialism, but for Africans the result was still an improvement over their former poverty.

You’ll notice how deftly Hubbard sidesteps the issue of slavery, which was essential to the colonization of the Western Hemisphere. If Africa was not being colonized in he same fashion as Jamaica or Brazil in the 1700s, it was still essential to the sugar plantations whose profits enriched Europe in this period. The loss of able-bodied men and women to the slave trade robbed Africa of the possibility of emerging as a relatively strong and self-reliant economic entity.

Hubbard moves from the ridiculous to the obscene when he describes Congo as “prosperous” in 1960, seemingly defined by the presence of “hospitals, ports, schools, railways, and roads of Africa date from the colonial era.” Except for the hospitals, every other sign of prosperity is associated with the extraction of minerals that certainly left Europeans richer.

But even more to the point, how in the world can one mention Congo, colonialism and the year 1960 in the same breath without referring to the overthrow of Lumumba in that year? Acting on behalf of Western corporations, upon whose behalf Hubbard has advocated forcefully for decades, the breakaway province of Katanga succeeded in ruining the chances of the Congo to benefit from its minerals. For the better part of four decades, the country was bled dry by a corrupt dictator supported by the West and by conservative think tanks in particular as a bulwark against Communism.

It is also of course worth mentioning that the Marshall Plan only succeeded because WWII destroyed so much of the European economy that it became ripe for a new cycle of capital accumulation. With funding from a cash-rich U.S.A., European corporations went into high gear supplying new markets for housing, automobiles, clothing, and other consumer goods. Furthermore, there was an added incentive to make the Marshall Plan work since it was necessary to stave off socialism. With the disappearance of the Soviet Union, there is little need to pump money into the African economy except, of course, on a strictly for-profit basis. Hubbard regards Zimbabwe as an abject lesson in the failure of statist economies, but he neglects to mention how fully integrated the country is in global markets, even on a basis that sounds like a Jonathan Swift satire:

Meals come only once a day for Helen Goremusandu, 67, and the six children she is raising. With prices for the most basic food products increasingly beyond her reach, that daily meal often consists of nothing more than boiled pumpkin leaves, washed down with water.

About a mile away, a Zimbabwean government grain mill is churning out a new product: Doggy’s Delight. Announced by its creators in January, the high-protein pet food is aimed at the lucrative export market, one of the dwindling sources of foreign exchange in a collapsing economy.

–Washington Post, March 3, 2008

Well, who knows. Maybe Hubbard believes that a Marshall Plan is best suited for boosting the sales of Doggy’s Delight. From the standpoint of comparative advantage, that’s what Africa seems cut out for nowadays.

Anthony-Claret Onwutalobi
Anthony-Claret Onwutalobi
Anthony-Claret is a software Engineer, entrepreneur and the founder of Codewit INC and CEO of Portia Web Solutions. Mr. Claret publishes and manages the content on Codewit Word News website and associated websites. He's a writer, IT Expert, great administrator, technology enthusiast, social media lover and all around digital guy.

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