Capitalism Not The Answer
THE nationalisation of strategic sectors within the Namibian context has been a debate negated by some academics as counterproductive and economically suicidal.
It goes without saying that the failure of communism in the Soviet Union provided an ideal point of departure for rightist intellectuals and politicians to a large extent to push this assertion of doom and gloom of Marxist-Leninist ideological predispositions.
Numerous arguments have been made against nationalisation as opposed to privatisation, ill-conceived by those who stand to gain from the capitalist apparatus. The reasons of revolt by centre-rightists includes but is not limited to the myth of the exodus of investors even before nationalisation kicks in, the consequent plummeting of markets, political and economic isolation by those fuelling the capitalist appetite, the World Bank, IMF amongst others.
Anarchy, civil unrest, suppression of freedoms, poverty and other social ills become then the order of the day as contested vehemently by those who propose the continuance of capitalism.
This still echoes from countries such as Zimbabwe, the only African country that has so far, despite Western outrage and vilification, championed nationalisation through what one would call moderate ‘indigenisation’ of some critical sectors. Moderate because nowhere is it reminiscent of radical shifts which was witnessed as in the case of Cuba after the revolution in 1959 where all strategic sectors were nationalised without compensation and as result cost the Cuban people more than fifty years of an economic blockade imposed by the capitalist USA to this day.
Ironically though, this greed to hold on to the capitalists structure have led some substitute radical nationalisation (not expropriation) of priority sectors.
It does not take a genius of an economist to conclude that increased taxes on priority sectors such as mines are tantamount to economic sabotage of any economy in that it allows for small revenue to state (the people’s) coffers.
Macroeconomics teaches us that companies are taxed after all debt obligations have been covered. Increasing tax would mean companies deliberately take on more debt without making the most of equity, to finance production, infrastructure amongst other capital extensive investments and as a result less resources for wages, training and other human resource incentives.
Ultimately ‘restructuring’ and cost cutting measures kick in, with systematic job losses, budgetary diminution and other financial constricts – paranoia perfectly sufficient and precursor for supposed “investors” to pull out, leaving the status quo worse off in comparison to what the state was before privatisation and/or tax increases.
Benedick M Louw
SPYL, Karas Region