Mises Wire

The Case for Free-Market Liberalism in Africa

Perceived as a by-product imported from the West, liberalism — often known in the English-speaking world as “classical” liberalism — has been rejected as an ideological model to define the political culture and systems of the African continent. It was primarily rejected because liberalism, like its related economic system capitalism, is observed as the system of the oppressor, the European colonizer who seeks to maintain his domination upon the African people by sustaining his order. Second, it was rejected because most African political leaders argued that the emphasis that liberalism puts on the individual, is not compatible with African political culture due to the fact that the collective is valued over the individual. As a result, socio-politically, the majority of African governments were autocratic and oppressive, and the freedom of the citizens in each African country, was significantly restrained. Economically, the majority of African countries that embraced a more government-controlled economy, impoverished their people, and made their economy stagnant.

Liberalism was certainly born in Europe, and popularized in the seventeenth century through Second Treatise of Government of John Locke; but it is far from inherently being a western ideological by-product because the countries that have embraced liberalism — to various degrees — met with a commensurate amout of economic and political prosperity. One example of the success of liberalism outside of Europe and North America, is Japan; whereby politically, a Western-style rule-of-law has been integrated into the political system while economically, the living standard of the Japanese people is significantly higher due to a relatively high degree of economic freedom . Yet Japan is not a Western country nor a Western culture. If liberalism has been so beneficial to Japan, why can’t it work in Africa as well?

Private Property: The Secret to Economic Growth

Liberalism can have a serious positive impact in Africa if Africans embrace the concept of private property. As a matter of fact, economic freedom is the ability to retain private property. Private property is what determines the growth of capital. And that’s essential for a higher standard of living.

The African continent is exceedingly rich in natural resources, yet the living standard of Africans is very low. The most plausible explanation for this discrepancy is the lack of a system that protects private property.

Indeed, natural resources have no value unless human beings use their knowledge in combination with these resources to create value from. A resource is not a resource unless it is used to generate value. And the best way to create value through the utility of a scarce resource is to privately own that resource. The retention of private property generates capital, creates economic growth, stimulates economic incentives, and produces wealth. For example, South Africa is today the most prosperous country in Africa because compared to much of Africa, its people are economically and politically free. They have access to private property because the government plays a lesser role in economic activities. Rwanda is another great example of economic advancement in Africa. Rwanda retains an authoritarian political system, but it is relatively economically free. And economic freedom is, as Milton Friedman noted, an important first step to increasing political freedom as well.

Today, Rwanda has been ranked as one of the best countries in Africa to do business. Yet it has been only 25 years since the nation was swept up in a bloody genocide. If Rwanda has become one of the most economically advanced countries in Africa, it is because the rate of retention in private ownership has considerably increased since the end of the genocide. In fact, the rate of retention in private ownership increased from 10 percent in 1997 to 72 percent in 2019. It means that more people have had access to private property, and therefore, were able to create capital, and the creation of capital stimulated the Rwandan economy. The Republic of Kenya is another African nation that has a striking economic growth with more than 5 percent annual GDP growth in recent years. This would not be possible if Kenyans were denied the economic freedom necessary to acquire and build capital and wealth.

The Rule of Law: The Source of Political Stability

One of the most important conditions for an economic system that works is a reliable legal system that will protect economic freedom and civil liberties.

This is a key component of liberalism. If private property is not legally secure from both neighbors and the political system, it is not really secure. This is often referred to as “the rule of law.”

But the rule of law has often not prevailed in most Africa countries. In fact, most African countries, at the dawn of the independences, established a one-party state. These states could set rules and seize property arbitrarily without regard to established law.

The fundamental reason for establishing such a political system, was to avoid any kind of potential rebellion from the masses against the political authority. Consequently, the civil liberties of the African people were drastically restricted, and the rulers ruled their respective states autocratically, and sometimes oppressively.

As a result, the rule of law was substantially undermined, the political systems were unsurprisingly illiberal. For example, Zaire, under Mobutu, was ruled despotically with the enforcement of a one-party state that decided for everything on civil policy. The lack of the liberalization of political institutions and the absence of the rule of law, led to several coup d’états and political instability; notably the one in Liberia with Samuel Doe, overthrowing President William R. Tolbert in the early 1980s or in Togo with Gnassingbé Eyadema overthrowing Sylvanus Olympio in the mid-1960s.

The rule of law, however, is an essential factor that forms the foundation of economic prosperity and political stability. Without the rule of law, a society cannot adequately function economically nor politically. Unfortunately, the African political leaders of the post-colonial era have failed to develop the concept of the rule of law within African political culture and in African political systems.

A society cannot be economically advanced if it has no political stability, and political stability is rooted in the rule of law.

Liberalism, like capitalism, is not a western imported by-product as some Pan-Africanists may want to make it seem like. It is a by-product of human nature. Liberalism can be implemented in African political culture if the African people are willing to accept it, not as a “western by-product,” but as a social antidote to guarantee the improvement of their well-being politically and economically.

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