Namibia Is A Mixed Economy
THIS is in response to Theuns who wrote a letter titled ‘Namibia is a socialist state’ on Friday 13th July 2012.
I totally disagree with the author and his understanding of socialist and capitalist economies is somewhat inaccurate. The major difference between these two systems is that in a strictly capitalist state the means of production (farms, factories, stores etc.) and control of capital is owned by private individuals whereas in a strict socialist model ownership of the means of production is characterised by the state.
The second major distinction between the two is that capitalism simply is profit driven whereas in theory the focus in socialism is just to ensure that everyone has enough to make a decent living.
Namibia does not even remotely resemble a socialist state because the means of production and control of capital primarily rests in the hands of a few private individuals especially those who benefited the most from the colonial and apartheid era.
In addition Namibia has strong laws which protect the individual’s right of ownership.
Also in a mixed economy there are no restrictions on public ownership and governments are allowed to participate.
On taxes the author argues that Namibia has a 50 percent tax rate which is false and we can prove this using his own example of a person earning N$10 000 a month which amounts to a total N$120 000 p/a.
Using the official tax table you can easily determine that such person only pays N$23 600 p/a in income tax and in percentage terms that is 19.6 percent, even with municipal taxes it’s less than 25 percent. For argument’s sake you can add all other stealth taxes like VAT and the cumulative tax rate in Namibia would still be much less than in any of the EU nations.
Therefore his theory on taxation does not hold.
On bailouts again Theuns is absolutely wrong again because even the world’s biggest capitalist oriented mixed economy, the US, has a long history of bailing out enterprises that are of strategic importance to their economy.
Remember the US$25 billion bailout of the auto industry or the US$180 billion bailout of AIG in 2008 and that’s without mentioning any of the banks or mortgage lenders. Excuse me, TransNamib, Air Namibia and the NBC are all strategically important to the economy of Namibia.
In his last sentence Theuns uses a classic sound bite “capitalists pay the bills, not socialism” but that theory is currently being turned on its head in the so called industrialised nations especially in Europe and the United States where the de-regulation of the banks using capitalist ideals has led those economies to the financial crisis that started in 2008 and resulted in mass bailouts by the hard pressed taxpayers of those respective nations.
To put this in layman’s terms, it was the poor working and middle classes that came to the rescue of the super-rich to keep capitalism alive.
Even capitalism itself needs a bailout from time to time considering that this was not the first financial crisis in the last century.
I’m not a socialist by any stretch of the imagination but one cannot ignore the fact that a good balance between capitalist and socialist ideals tends to create much more equal and peaceful societies with very low crime rates.
A great example is the Nordic countries of Norway, Finland and Sweden.
In Namibia we have problems ranging from poverty, unemployment, and the misuse of national assets for self-enrichment but, these problems are not because we are socialist or capitalist, it is because collectively we have not yet adopted the right mental attitude that will take us to the promised land.
Clarence K Mbai
By email