Where are we in Malawi??

If we look at big political ideologies, we can distinguish two major types, socialism and capitalism. Communism has all but disappeared since the Berlin Wall fell in 1989.

In socialism (or left wing politics) the state is a big important institution that takes responsibility for the well being of the citizens. It provides a lot and to pay for this it raises taxes.

On the other hand in capitalism (or right wing politics) the state is small and restricts itself in its duties. In theory this would lead to much lower taxes for the inhabitants of the country. In practice the difference with socialist states is limited (both around 30%).

In a capitalist system the state limits itself to providing security and protecting private property, as well as exercising international policy. The state stays mostly out of economic policy, leaving the economy to the forces of demand and supply (sometimes named free market economy). View Post

Total capitalist economies generally fail as the state does nothing to help the economy run smooth. (for examples read “the Shock Doctrine” by Naomi Klein)

In a socialist system the state also provides health care, education, social security and a host of other services. The state has a big hand in the economy, and often a lot of industries are state owned, which means there is democratic control over the policies, and state enterprises are expected to serve the national interest as well as the interest of the enterprise. In Malawi MBC is a good example of a state enterprise, that is supposed to serve the interest of the population. (In practice it often serves the interest of the ruling party first and of its employees second, leaving the population a distant third).

Both systems have their advantages and disadvantages. Very cynically put: socialism leads to strangling over-regulation and bureaucracy, which is not good for economic growth. Capitalism leads to gross inequality, which is gross injustice. Or capitalism is good at creating wealth, but bad at just distribution of wealth. Socialism is good at just distribution of wealth but less good at creation of wealth.

In practice no state is wholly socialist or wholly capitalist, but states are somewhere on a continuum between the two extremes. The USA are mostly capitalist, the Nordic countries (Denmark, Sweden, Norway) are much closer to socialism. China has an interesting new form, where the economy is mostly capitalist, though the government keeps a tight hold on big corporations and the banking system, while the political system is one-party communist. Many theorists hold that this can only be in transition and that a free market economy breeds the powers that will enforce a free democratic political system, analogous to the French revolution in the 18th century.

Where are we in Malawi??

In Malawi we get the worst of both systems: the government keeps raising our taxes and import levies are at an astronomical rate up to 125%. The government is by far the biggest player in the economy, keeping a tight hold on every company in the country, through awarding or withholding tenders, and through a corrupt and impenetrable regulatory system, that only the most experienced (and most expensive) lawyers can understand and maneuver their way through. That would be a socialist system if the corruption was dealt with. But does our government live up to the responsibility of a socialist government in taking care of the needs of the population?

In name the government does provide health care, but we see continuous complaints about quality and absence of essential drugs. Now a new hospital is opened in Nkhata Bay ( not financed by our own government but by the African Union) it is already clear that government is not going to finance it, so the proposal is to (partly) privatise it.

Which means government is only partly providing health care. Quality health care will only be available to the rich.

WE also read that government is raising tuition fees at Domasi College of Teaching with a whopping 12000%. That is making it 120 times more expensive. So clearly here government is not living up to the responsibilities of a socialist government either.

The ruling party must make choices: are they left wing socialist and do they provide for the population, or are they right wing capitalist and do they stay out of the economy? It does neither. We get the worst of both systems, which is a raw deal.

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