Buharism Beyond Buhari: A Response to Mohammed Haruna

By Sanusi Lamido Sanusi [London] September 6 ,2002 (All views are strictly personal) lamidos@hotmail.com

When I chose the sub-title “economic theory and political economy” for my essay on Buharism, it was with a clear purpose in mind. “Political Economy or Economics”, wrote Alfred Marshall a very long time ago in his Principles of Economics, “is a study of mankind in the ordinary business of life.” Although the definition has been considerably narrowed, it seems to me evident that no one who delves into this area can pretend to be a neutral and impartial observer, since every one has a position in the scheme of things and everyone has an explicit or implicit interest in what happens to mankind. Indeed I have never written on a matter about which I am indifferent, for to do so is an exercise in futility. As I wrote in one of my earlier articles, language is a moral medium and writing is a means of education and exhortation aimed at inviting the reader to act for his freedom and liberate first his consciousness, then his person, from the obscurantist cloak of myths, superstitions and outright fallacies invoked by those responsible for his state of alienation. This theme runs in the writings of several intellectuals, from Marx and Trotsky, to Sartre, Chomsky and Eco. My intervention was not the contribution of an impartial arbiter but, as stated clearly in the piece, an attempt to unveil the “exact locus or nexus” of the Buhari administration in “the ebb and flow of Nigerian history”.

To this extent, that is to the extent of stating that I am not a neutral party as far as Buharism is concerned, my friend Mohammed Haruna is dead right in his rebuttal titled “Sanusi Lamido Sanusi and Buharism”. Beyond that, however, he seems to have made a number of unsubstantiated logical leaps, which need to be pointed out as part of the process of moving the discourse forward.

The principal error is to confuse my clear partiality in favour of Buharism with a glorification of Buhari the man. The economic principles and the political ideology underpinning the Buhari government transcend Muhammadu Buhari and they formed the kernel of my paper. It is the sad element in Mohammed’s rebuttal that precisely when he addressed himself to the substance of my paper, the economic theory and political economy of Buharism, he ran into logical conundrums that left one silently bemused at what is best described as a most eloquent articulation of incoherence in economic matters. Take for instance the following statements: “Nigeria, Sanusi would argue, quite rightly, has since taken its bitter pill of devaluation, but seems to be getting worse, not better. Devaluation, therefore could not possibly be the correct prescription. But then the problem with social behaviour is that it is impossible to predict with certainty for the simple reason that too many variables are involved….” My initial reaction is to wonder if Mohammed read my paper. The point was clearly made therein that this issue had nothing to do with the unpredictability of social behaviour. The results of devaluation in an economy with the characteristics of the Nigerian economy were a foregone conclusion.

I have discussed the theory at length and shown that we knew, ab initio, that things would get worse. After Buhari was overthrown, for those who remember well, economists like Dr Ibrahim Ayagi (who braved opposition given his post as the Chief Executive of Chase Merchant Bank), Professor Eskor Toyo, Professor Sam Aluko, Professor Ikenna Nzimiro and Dr Bade Onimode, as well as radical intellectuals like Dr Bala Usman, Dr Yusuf Bangura, Dr Claude Ake etc. were vocal in their opposition to the so-called “IMF conditionalities.”

Founded on this fallacy of unpredictability is also Mohammed’s assertion that “there are… economists who are no less patriotic than Buhari who would support the contrary position that although devaluation may be a bitter medicine, it is inevitable for…Nigeria, which produces little of what it consumes.” Were this statement not coming from a writer for whom I have the most profound respect, I would have dismissed it as the unserious ranting of a demagogue. What, pray, is patriotic in prescribing an economic policy that is bound to condemn the majority of the populace to great poverty and hardship, with the only “positive” effect of handing the economy over to foreigners and creating a very small clique of the super rich? The only rational understanding of this statement is to say that patriotism in this context has not been defined. Perhaps Mohammed means that these economists are as patriotic in their loyalty to the United States, the IMF, the World Bank and Multinational Corporations as the Ayagis and Bala Usmans are to Nigeria. But even more objectionable, given the implicit insult to their intelligence, is the insinuation that those who say devaluation was bad for Nigeria did so simply because it was “good for the IMF or the World Bank”. We rejected IMF conditionalities because they were bad for Nigeria and for Nigerians. Those who supported them did so because they favoured international capital and a small clique whose interest they represented.

Behind the sophisticated theorisation was a naked, violent struggle for “market share” with consequences for the creation of wealth and affluence, as well as their concentration or diffusion among countries and among individuals, institutions and groups within each country.

The final direct response to Mohammed is on his argument that we have had good dictatorships and bad ones and that we could therefore not divine the likely direction Nigeria would take had Buharism been pursued to its logical conclusion. This argument is dangerous and it suggests that the article on Buharism had supported despotism for its own sake, rather than acknowledge it as a negative, if sometimes necessary corollary to certain policies in specific contexts. To bring in the likes of Mobutu (Haruna may well have added Abacha) as examples is mischievous when dealing with an administration that spent its short life punishing those involved in precisely the kind of looting that these tyrants were guilty of. Contrary to Mohammed’s assertion, I do not have an “apparent blind faith in Buharism with no questions asked.” In what remains of this intervention, I will substantiate this proposition. The first point I will make is that even though Buharism rejected the “big bang” approach of what was known as “the Washington consensus” (the IMF, the World Bank and the US Treasury) it did not pursue a regime of fixed exchange rates (another false item in Mohammed’s paper). It argued for a gradual process that would maximise the benefits and minimise the costs of managing a severe economic crisis. Indeed the exchange rate between 1984 and late 1985 depreciated in a gradual, controlled manner. The question now is this: Which, between the gradualist approach to deregulation, liberalisation and privatisation on the one hand and the big-bang approach would have taken Nigeria down the same path as the “Asian tigers”?

I call to witness Joseph Stiglitz, winner of the Nobel prize for economics in 2001 and until January 2000 Chief Economist at the World Bank. I will quote at length, because of its lucidity, a passage from a book he published this year, Globalization and its Discontents (p. 92): “There were problems in the way the Asian economies developed, but overall, the governments had devised a strategy that worked….which had but one item in common with Washington consensus policies- the importance of macrostability. As in the Washington Consensus (hereafter WC- my abbreviation, not Stiglitz’s) trade was important but the emphasis was on promoting exports, not removing impediments to imports. Trade was eventually liberalized but only gradually as new jobs were created in the export industries. While the WC…emphasized rapid financial and capital market liberalisation, the East Asian countries liberalised only gradually….While the WC….emphasized privatisation, government at the national and local levels helped create efficient enterprises that played a key role in the success of several of the countries. In the WC view, industrial policies in which governments try to shape the future direction of the economy are a mistake. But the East Asian governments took that as one of their central responsibilities….While the WC policies paid little attention to inequality, the East Asian countries did, believing that (this was) important for maintaining social cohesion, and that social cohesion was necessary to provide a climate favourable to investment and growth…Most broadly, while the WC emphasized a minimalist role for government, in East Asia, governments helped shape and direct markets.”

Thus while it is fair to compare Nigeria under Buhari to Singapore under Lee or Indonesia under Sukarno, it is those governments that came after him that are comparable to Zaire under Mobutu or Indonesia under Suharto.

The issue is not the fact of authoritanianism, but authoritanianism in pursuit of what? The parallel drawn by Mohammed is a mischievous attempt at reducing all dictatorships to one common denominator, thus creating a false moral equivalence between one regime and the next. There is a second line of argument that will reveal to us the true nature of the Harunaesque “patriotism”. Events since 1985, not just in Nigeria but also in other nations, have shown that those who stood firm against the Washington Consensus were the true patriots everywhere. When the British financial markets were deregulated in 1986 under Thatcher this was presented as their opportunity to “compete and win in the global market”. By the close of the century the last of the UK’s major financial players was in foreign hands. Mohammed Haruna should read a book, The Death of Gentlemanly Capitalism, written by Philip Augar, one of the City’s top brokers, for an analysis of how this happened. It is not for nothing that from Washington to Prague to Nice to Quebec to Gothenberg and to Genoa the anti-globalization movement has staged protests and engaged in violent riots.

In her book, The Silent Takeover: Global capitalism and the Death of Democracy, Cambridge don Noreena Hertz makes the following frightening revelation: “ Propelled by government policies of privatisation, deregulation and trade liberalisation… in the past twenty years a power shift has taken place. The hundred largest multinational corporations now control about 20% of global foreign assets; fifty-one of the hundred biggest economies in the world are now corporations. Only fourty-nine are nation-states. The sales of General Motors and Ford are greater than the GDP of the whole of sub-Saharan Africa; the assets of IBM, BP and General Electric outstrip the economic capabilities of most small nations; and Wal-Mart, the US supermarket retailer, has higher revenues than most Central and Eastern European states including Poland, the Czech Republic, Ukraine, Hungary and Slovakia.” (p.8) In other words we have all become “banana republics”, courtesy of our “patriotic” economists. At the heart of the problem is the emergence, in Africa, of a crop of “intellectuals” who are the heirs to the old colonised minds. These are not just persons with a bougeoisified intellect. They have lost all originality in thinking and all critical ability because their minds have become standardised and commodified by the ideology of the market. Everywhere you turn you see them preaching the beauty of the market, of efficiency, liberalisation, private sector and privatisation, deregulation etc. They do not ask how we can stop public sector corruption or make government more efficient and accountable. These anomalies are presented as necessary to all government and used as a pretext to strip the people of owned assets. One of the world’s foremost fund managers, George Soros, wrote this about markets in his latest book, Globalization: “Markets are amoral: they allow people to act in accordance with their interests but they pass no moral judgement on the interests themselves. Yet society cannot function without some distinction between right and wrong”.

This simple truth, now resounding from the very heart of global capital, is still not present in our discourse. Let me illustrate with a simple example I used often in my teaching days. The economist tells us that the price of food, for example, should be determined by the forces of demand and supply. The “equilibrium price is that at which demand and supply are equated and the market is cleared. This is the market’s much touted “efficiency” and any other price comes with problems. This is taught as part of “positive economics”, a mythical discipline that pretends to be value-free social science. What the economist does not tell us is the following: The segment of the demand curve below and to the right of its intersection with the supply curve represents millions of poor consumers who are priced out of the market because they cannot afford to pay the “equilibrium price”. Also, the entire segment of the supply curve above and to the right of the intersection represents thousands of poor farmers who are priced out of the market because they cannot afford to produce food and sell at that price. For a consumer to be in the market he must afford the market price. For a producer to sell his crops profitably he must have economy of scale. A subsidy in this market, say on fertilizers, will lower the production cost of farmers and allow some more into the market, increase the quantity supplied, reduce the price and bring in more poor consumers. But the economist will tell you: “Subsidies are bad.” The Harunaesque economist, that is. In the US and Europe the governments are spending billions of dollars in subsidy to agriculture, keeping farmers in business and making food cheap. In Nigeria our patriots tell us subsidies are bad. The US only recently introduced heavy import tariffs to protect the inefficient domestic steel industry and save jobs, in flagrant disregard of all the principles and agreements on trade liberalisation. In Nigeria, based on the advice of patriotic economists we have in the 2002 budget proposed a reduction in the excise duty on beer from the meagre 40k to 20k. The duty was reduced about a year ago from 60k to 40k.

The emergence of the powerful corporation and the market as the dominant elements in the world political economy was the result of deliberate policies pursued with ruthless single-mindedness. Milton Friedman, the main intellectual force behind the Reagan-Thatcher policy of supply side economist has organized and published many of his populist articles under the exotic title The Lexus and the Olive Tree. He not only preaches the virtues of globalisation, he prescribed the rules by which all countries wishing to participate in the global economy should be bound, including sanctions on nations that vote for the wrong governments: Investors will “stampede away” and “stock markets crash”. A close reading of an interesting book by Thomas Frank, One Market under God will give the reader an insight into the ideological fountainhead of the Harunaesque patriots.

In conclusion, the economist J.K. Galbraith once wrote that there is no economic theory that cannot be explained in intelligible English to the non-economist. The greatest economists have always asked themselves: How does economics affect my people? Friedman has succeeded as an ideologue of the corporation and a patriotic American. In the early 20th century, what became known as Keynesian Economics was actually anticipated and implemented in Sweden even before the publication of his General Theory. A group of economists, starting with Wicksell and continuing through the likes of Gunnar Myrdal, Bertil Ohlin, Erik Lindahl. Erik Lundberg and Dag Hammarskjold challenged Say’s Law and helped create the first welfare state in the capitalist world. These economists, according to Galbraith in his A History of Economics had one thing in common: “With a knowledge of the relevant theory and a strong resistance to its constraints, they all addressed themselves to the practical problems of the Swedish economy, society and polity.” Ultimately, this is the yardstick for defining a patriot.

Buharism was, in its time, a patriotic ideology. But as a world-view, it goes beyond Buhari the man and his political ambitions. I dare say Buhari’s (and any leader’s) relevance, should be determined by reference to Buharism and his commitment to it. We should, finally, state that Mohammed Haruna has given us the best possible conclusion, He wrote:” Now that he has intervened with the right emphasis on the issues rather than on the personalities involved, hopefully the debate, not just about Buhari’s entry in politics but the debate about the coming elections will move away from who the key actors are to what they can do to eliminate the country’s poverty and its divisions.” I rest my case.

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