Liberalism

Now that I’ve shown a few dichotomies in economic and political philosophy, I’d like to go a bit more in depth into the political philosophies. Because DD Phiri has just written about the Communist Manifesto, I’d like to say a few things on liberalism. It is not strong in Africa generally, but in my opinion it deserves more attention.

Liberalism is in principle an individualist philosophy: it looks to the individual more than to the group. Some people argue this is un African, but others argue it is a stage in development that is collectivist, rather than individualist. Before the industrial revolution, Europeans were also collectivist and more organized in the extended family than in individuals or nuclear families.

Liberalism is utilitarian, which means it states that the right thing to do is the thing that brings the greatest amount of happiness for the greatest number of people. Liberalism is named after liberty, and it is usually taken to mean liberty from state intervention. Even in classical liberalism the state cannot disappear, but liberals often argue the state should be as small as possible. That means everything that can be left to the private sector should be left to the private sector. Some argue that education and health care should be privatized. Until recently this was largely the case in the US, but Obama has changed that considerably for health care (Obamacare).

Classic liberalism strives to open borders, so trade and business can be done efficiently. They argue that with the private sector unhindered a maximum amount of wealth is created, which brings a maximum amount of happiness for the population. Regulations should be kept to a minimum.

What is most sacrosanct for liberals is private property. Government should guarantee this. The judiciary should enforce contracts. With these two measures, the private sector should (according to classic liberalism) be able to function with maximum liberty (= maximum efficiency according to classic liberalism)

This classic liberalism has mostly been overtaken. Total liberal (free market) economies are characterized by periodic crises. The Great Depression of the 1930s showed the untold misery caused by this. It gave rise to a new type of liberalism: social liberalism, with economies guided by the principles as formulated by John Maynard Keynes. He argues the state should actively participate in the economy and keep the financial markets on a tight leash to prevent crises from going out of hand.

This type of liberalism was popular until the 1980s. Then Margaret Thatcher, the then British prime minister, created unprecedentedly free markets in the UK. She was followed more or less by the then US president Ronald Reagan. In many countries the world over economies were made more classic liberal, which means less regulation, more liberty for businesses and less protection for the workers. Thatcher privatized a lot of British state corporations, and closed a lot of others, including the mines. This created unprecedented levels of joblessness and poverty in the north of England, and a growth of financial markets in London. The inequality rose sharply: the rich richer, the poor poorer. In the US Ronald Reagan followed some similar economics, which created crises in a lot of small towns. Also he created economic difficulties by letting the budget deficit grow to unprecedented levels by exponentially increasing army spending, specifically the mega expensive “Star Wars” project, which never functioned.

Also in the 1980s the Bretton Woods Institutions (IMF and World Bank) started promoting classic liberal policies in the countries where they had power (those who needed loans, mostly). They started imposing Structural Adjustment Plans (SAPs) which often ruined the weak economies of the countries concerned. The austerity that the Bretton Woods Institutions tried to impose on armies and (white elephant) prestige projects were pushed downwards in the government chain of power, and ended up ruining a lot of education and health care systems, which obviously had bad consequences for the economies of the countries involved.

After the end of communism in 1989 (except in North Korea) the Bretton Woods institutions imposed extreme liberal policies on the former communist states, including Russia. This created extreme inequality: still a few Russians are filthy rich, and the popular masses are in dire poverty, much worse off than under communism. (And they did not get the nice liberal policies of freedom of speech and such either!)

In Africa liberalism is mostly weak. The UDF is in name a liberal party, but their manifesto for the 2014 elections reads more like a social democrat approach than a liberal one.

Liberalism in Malawi would mean: less regulations. For the private sector a lot of the regulatory framework is outdated, and the government is slow in issuing permits and such. A liberal government would try to service the private sector better, so it can grow and create jobs for the workers. It would give out more permits for auctions than just AHL. It would lower or abandon the high tariffs on imports and limit export bans. It would fight corruption that hampers the private sector in its development. A liberal government would change the land policy: most land should be privately owned (according to the liberal idea that private property is a great good), which would enable the farmer to use it as collateral for loans, so he can get the farm inputs needed for a good harvest. (If the farmer cannot pay back, he/she will lose the land, and be a total proletarian.) A liberal government would limit the government sector with less civil servants, lower taxes, less regulation, less interference in the free market economy, and in the private lives of its citizens.

In the first months of her tenure, president Joyce Banda mentioned she was looking for private sector led growth, which is a liberal idea. This never happened, though.

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