Thomas Piketty posses an important question on whether the kind of social state that emerged in Western Europe in the twentieth century have a universal vocation?
In rebounding African economies back from their pre-colonial status in the world, it is tempting to affirm that the same policies that propelled a bush peoples in Western Europe into an Industrial Age deserve consideration in Africa.
The answer to Thomas Piketty’s question hence, may seem complicated in light of Africa’s inability in the past five decades to chip at becoming a breadbasket of her own. However, it is made simple by taking an in-depth look at African economies before the Colonial Age (1890 -1990).
Another way the question has been framed in the African context is: in order for Africa to re-develop and re-invent herself, does she need a similar implementation of the social state that the two hundred year old industrialized economies of Western Europe and even the newly-emerged economies of Asia have developed?
Nothing, Piketty advises, could be more certain.
I begin with disagreeing. The proposal to increasing taxation as a source of revenue for governmental projects and expanding it to include every aspect of life such as, housing, food and water, and healthcare are deeply un-African ideas.
More taxation to raise government revenue for the social state in Africa would do nothing to solve the developmental crises that African states have faced in the two centuries since the violently aggressive European markets usurped their economies.
Africa is unique. She has always been. Pre-colonial African economies have supported civilizations tens of thousands of years prior to any emergence of civilized peoples in the bushes of Europe.
How did African states accomplish economic sustenance for thousands of years? Instead of pose these collective questions and reach conclusions on modern policies that have their roots in traditional African economic theory, scholars in Europe and in the US seem to be stooped in a dilemma when it comes to Africa.
Which puts African governments at crossroads in partnering with the West at revamping African economies. The cardinal question here is, is it intentional? Are our ‘partners’ in Europe and America really committed to a economically independent Africa?
More recently out of Africa, The Ghana Empire, The Mali Empire, and The Songhai Empire are exemplary social states that post-colonial African states can and should emulate in principle and in economic theory in achieving balanced and humane industrialized interdependent states.
There is not a god-given map for arriving at the social state. It is comforting that Thomas Piketty even recognizes important differences among the nations of Europe in achieving industrialized status.
The countries of Western Europe seem to have stabilized government revenue, used for the construction of the social state, at about 45-50 percent of national income, whereas the United States and Japan seem to be stuck at around the 30-35 percent level.
Without these numbers it is still obvious, without recourse to an academic justification, that different choices, like careful independent choices of African states, are possible in arriving at the equivalent levels of development that Western Europe enjoyed until the 2000s.
I am worried however by Thomas Piketty’s need to stress more and ever more taxation as a solution. He seems to be stuck on taxation as the prerequisite to building a social state that is capable of fairly distributing wealth, work, and remuneration.
If we look at the poorest countries around the world in 1970 – 1980, we find that governments generally took 10-15 percent of national income, both in Sub-Saharan Africa and…
The historical evidence suggests that with only 10-15 percent of national income in tax receipts, it is impossible for a state to fulfill much more than its traditional regalian responsibilities: after paying for a proper police force and judicial system, there is not much left to pay for education and health.
Another possible choice is to pay everyone poorly – police, teachers, and nurses – in which case it is unlikely that any of these public services will work well. This can lead to a vicious circle: poorly functioning public services undermine confidence in government which makes it more difficult to raise taxes significantly.
These comments are grossly misguided in the African context. A case in point, Western European institutions of health and education, for example, are markedly and fundamentally different from traditional Africa’s.
Pre-Colonial African states developed more elaborate health systems that were more inclusive, communal and above all more cost effective than any institutions of healthcare Europeans seem to have introduced in Africa.
And in particular, traditional Africa never had a need for a centralized police force that heavily drained federal government revenue. Africa’s communities relied on social responsibility, shared tasks and an avid emphasis on clan/family systems that tackled complex issues, like crime, before the became state-wide epidemics.
The African economy is therefore nothing like the economies of scale that Western Europeans introduced in Africa during the Colonial Age and still insist on enforcing in Africa through the World Bank and IMF even today.
The mindset is parochial. And yet, even with much taxation and increased revenue for governments across the globe, the coveted social states of Western Europe, now newly fallen to the whims and caprices of materialism and capitalism, seem to find it excruciatingly difficult to wean citizens off unfairly traded goods from African, Asian and Latin America.
Furthermore, the top percenters in Europe and the US, haven fraudulently amassed wealth – holding more than 80 percent of all wealth in the world – refuse to admit that the European way of development, the European way of creating a social state and building a more egalitarian society has terribly failed.
Instead of admit the failure and leave African states alone to independently re-install their pre-colonial market economies, the oligarchs of Europe and the US insist materialism and capitalism remain the only driving forces of building sustained economic growth.
And according to Piketty, if the top percenters cannot ensure this sustained growth, by volunteering their wealth for redistribution, increased government revenue from increased taxation should come to the rescue of all.
It is clear that even Thomas Piketty can fall short. As an African economist, Piketty’s arguments against the unfair and increasing wealth inequality in the world are exceedingly sound.
While increased taxation in Europe and America would perhaps work to restore some economic sanity, in Africa, the land of a million worlds, a million civilizations, and a million cultures, that idea can only be detrimental.
The idea of increased taxation has been detrimental to economic growth since the few decades Africa has known the federal mode of practicing democracy and indulging in European styled market economies.
About seven decades passed, African development has stalled, if not retrogressed, and sustaining an egalitarian society, to say the least, has become an illusion in principle, for many African states.
It is about time African states revisited their pre-colonial economies.
There’s absolutely no reason African economists have not responded or reacted to Piketty’s ground breaking research. What on earth are people doing eating all the kelewele in the world? Our scholars are a disgrace, but I commend you guys here on Patapaa.
I disagree with your premise that Africa was doing better pre-colonization. But I agree that Africa was certainly a better place to live then than in Europe. The fact of the matter is the West have over-taken us economically, albeit violently and aggresssively. We need to do something and if you feel going back to our roots will bring that needed change then so be it!
Ms. Mona, I ask you how can you say that Africa was not doing better pre-colonization, but it was a better place to live than Europe, and then that Africa should go back to its roots. You have some disagreement in that head of yours. Which one is it?
In Africa we do not have one way of taxing people. This is only European conventional wisdom that more taxes create government revenue and hence lead to better social states. That is if the public institutions are not
1. Racist
2. Discriminatory
3. Corrupt
More taxation in a racist country only worsens the plight of the oppressed.
Materialism and greed will end the benefits of a government implemented social state. Period. The thing that killed the man began with a single desire.
It’s funny that all of Africa is a bush or a village, but here in this article is the first time I’ve heard Europe referred to as bush. It reminds me of the sway that Western media has on the way its stories unfold. And that I need to read with a more discerning eye for the way Africa is portrayed.
“Reach conclusions on modern policies that have their roots in traditional African economic theory” –> If anything, Western economies should learn from African ones, right? African economies predate Western economies by many thousands of years. Here we don’t have a chicken egg (which came first) debate.
Taxation seems to be a temporary solution, but in many cases, in the long run, people in government might abuse taxation and thus it will no longer benefit the people as a whole. The writer discusses this a little, but there is a larger discussion to be had about government abuses of power and why giving a government of a variety of ethnic peoples too much power can harm rather than help. Let the local ethnic groups decide what to do about taxation so that it can benefit its local people without big government intervention.
No truer words were spoken. Taxation is a way for people who run governments to profit and for everyday people to lose incrementally more income to government fat cats. If taxes should at all be collected, it should be done at the local level and NOT the country level. This is the only way that everyday people can benefit from the pooled income stream.
Piketty discusses government revenue in terms of percent of the national income. But I wonder how much government revenue would increase if he discussed wealth rather than income?
If Ghana ever becomes a police state, the country will have a real problem upon its hands!