I
t can also involve free trade and no control of capital flows
between nations; this is where globalization fits in perfectly,
along with the most progressive of ideas - privatization, implemented by Thatcher in the eighties.
I am a product of Thatcherism myself and in some ways believe
she is responsible for not only my early adopted ‘yuppie with
filofax attitude’ but also for the idea that wealth can be distributed to all levels of society through the privatization of state assets
and hence, one starts to develop not only a sense of ownership,
but also an all-inclusive and part of society mind-set which creates social responsibility amongst participants.
It will be quite interesting to witness a similar situation in The
Republic where state assets will consistently be privatized and
citizens given a chance of ownership, wealth creation and participation in the growth of the nation. The transfer or distribution of wealth from The State to citizens can only have positive
economic effects on the present and future.
There are a Number of Salient Industries in Sierra Leone That
Could Benefit From Private Equity
P
rivate equity is the love child of neoliberalism and capitalism
because of its effectiveness in raising private capital from very
wealthy individuals, companies or even nations and mobilizing
this capital into viable business enterprises.
Sierra Leone is definitely benefitting from PE, however, for it
to work effectively, we must embrace the tenets of neoliberalism. That is we need to see a full on effort of the strengthening
of the private sector and less intervention from government in
critical industries. For example, it will be quite a hard sell for
Sierra Leone Commercial Bank to attract global capital, with the
government owning a majority of its shares. Sometimes it is
necessary for the government to intervene via the taxpayers as in
the case of Lloyds Bank UK. As we are soon to witness, the UK
government will soon have to sell its holdings as soon as the bank
is deemed fit and not “distressed”.
There are a number of salient industries in Sierra Leone which
could benefit from both domestic and international private capital, but with government being majority stakeholders, a lot of
investors will normally just shy away.
The way forward is to privatize these industries, giving domestic
investors the first bite of the cherry so to speak, and then carving
out a significant portion to international private equity investors.
A number of industries will benefit from this, especially the energy sector. It is from this point we will begin to realize efficiency
within the various companies, which will then span outwards in
the respective industries.
In My View, the Spirit of Capitalism Is Not Greed, But Service – By Serving Customers and Markets Through a Process
of Voluntary Exchange
H
aving lived and worked in Sierra Leone for a number of
years, I was struck by an overwhelming thought - have we
ever had a leader in Sierra Leone who truly understood capitalism, not just as an engine of economic development, wealth
creation and market efficiency, but also as a moral force for good?
Milton Friedman in his 1962 book Capitalism and Freedom
argued that economic freedom is a pre-condition for political
freedom.
Wealth creation and market efficiency were not the principal
benefits of capitalism. He believed that the logical argument of
the free market should focus on its moral authority.
How can we in Sierra Leone focus on this ideology when the
few markets that are available have no viable controls and systems in place and when they do seem controlled, it implies that
the public sector has a controlling interest? This creates a perception problem, so to Joe Public, the soul of capitalism seems
to revolve around greed, corruption and selfishness.
Hence the famous saying in Sierra Leone “oosai den tie cow
na dae e dae eat” (a cow grazes at the spot where it’s been tied
down).
The father of modern economics, Adam Smith, wrote about
self-interest not selfishness. Indeed, he sought to distance himself from the work of Bernard Mandeville, who early in the
eighteenth century expressed the view that individual greed was
good for society.
In my view, the spirit of capitalism is not greed, but service – by
serving customers and markets through a process of voluntary
exchange.
If the players have too much market power, the process becomes ineffective. But voluntary exchange, free entry and exit,
competition, innovation, property rights and the rule of law are
the essence of capitalism. If we can only adopt this premise in
Sierra Leone, we will surely witness some form of rapid progress
emanating from the political to the economic, right through to
the social.
Our problems in Sierra Leone are not with the system per-se even though we have one, it’s just not being implemented; our
problems lay within ourselves as the people of the Republic.
When a nation of individuals lack the right values alongside a
complete lack of responsibility, excess ensues.
Show Me Another Efficient System and I Will Gladly Name
It After You
F
orgive me if I sound self-opinionated on this topic; however
show me another system throughout history that has been
so efficient in the allocation of resources and creation of wealth
and I will gladly name that system after you.
History has shown us that through capitalism the human society can flourish through the freedoms it provides. For us to
partake in capitalism in its full glory in Sierra Leone, we will
need to focus our attention to institutions, as this is the basic
building block of capitalism.
Capitalism is built on institutions, and those institutions are
largely built on values such as honesty, freedom, responsi