Wednesday, May 14, 2014

Book Review: The Dialectic of Economic Development.


                      The Dialectic of Economic Development.       John Tataw Manga, (New York: Xlibris, 2013) 172 Pages                                                                             Review by Ozodi Osuji

       This book is a joy to read; in fact, it is as if the writer is proficient in literary writing and deployed that skill in his discourse on the dialectics of economic development in the southern Hemisphere of our planet.
      The theme of the book is technology transfer. The author, apparently, has given quite a bit of thinking to the question: why is the south not developed? 
      By the south he is really talking about Africa, for if he includes Asian and Latin American countries we can easily see that some of those are developing at a rapid rate than Eastern European countries. Let us get
     The subject of Africa’s underdevelopment has been addressed from many angles by many writers.  Many theses have been posited by the various writers that take on this conundrum.  What is self-evident is that no one really has explained why fifty four years after they obtained their independence from their European colonial master’s most African countries remain as underdeveloped as ever, perhaps, more so than they were when they obtained their independence from Europeans.
     Mr. Manga, an economist who had worked in various management capacities in the banking sector in the Cameroons proffered one more hypothesis as to why Africa is not joining the rest of the world in economic development.
       Why is Africa backward?  Mr. Manga proffered the interesting hypothesis that it is not in the interest of the nations of the Northern Hemisphere for the south to be allowed to develop. His view is that the logic of self-interest of Europeans impedes economic progress in Africa.
       If Africa is allowed to develop that would mean transferring technology to Africa, such as transferring manufacturing factories to Africa. That would mean that what is currently manufactured in Europe and North America is manufactured in Africa. If this were to happen, it would mean that Africa would no longer be the source of raw materials for European manufacturers but a source of competition for Europeans manufacturers. It would mean that Africans would have access to cheap manufactured goods and that would undermine the profits of European companies manufacturing such goods.
      Hitherto, Europeans buy raw materials at dirt price from Africa, ship them to Europe, transform them into finished goods and sell them at exorbitant prices in Africa. Indeed, sometimes the Africans that produced the raw materials may not be able to buy the finished goods sold by Europeans!
      In the meantime, European manufacturers are able to provide their workers good wages. They do so because they sell their goods at high prices in Africa and make profit and transfer some of that profit to their workers in Europe. That way, European factory workers make middle class income while workers in Africa hardly are able to make enough money to put decent good food on their tables. 
      It is, therefore, in the best interest of Europe and North America if technology is not transferred to Africa, Mr. Manga reasoned.  It serves the national interests of Europe for Africa to be kept underdeveloped and preserved as the source of raw materials for European manufactures.
       If Africa is allowed to become developed she would constitute competition for Europeans and that would lead to lowering of wages in Europe. Consider that at present the average European’s hourly wages is more than a man in certain parts of Africa makes in a whole week of working. 
      Given Africa’s low wages European manufacturers would like to manufacture in Africa and sell cheap in Europe and in the process reduce the standard of living in Europe. It is, however, in Europe’s best interests if Africa is kept underdeveloped, if technology is not transferred to Africa.  This is the reasoning of Mr. Manga.
      Mr. Manga said that it does not make any difference whether we are talking about capitalist Europe or communist Europe. As he sees it, self-interest calculations trumps the goodwill thinking that had naively assumed that developed countries would gladly help underdeveloped countries to become developed.
      Clearly, Mr. Manga is a thoughtful man; he is a very powerful observer of the economic behavior of human beings. There is no doubt that human beings behave to serve their self-interests.
       As Adam Smith observed in The Wealth of Nations, people may talk about public interests all they want, human beings tend to work hardest when they are serving their self-interests. Human beings are selfish animals. Adam Smith does not regret that reality but seeks ways to manipulate it. Since people are looking after their self-interests they would buy from sellers of goods those who sell cheap what they want to buy. If a supplier is able to produce goods and services of high quality and sell them cheap people would buy them instead of buy from sellers who have similar goods and services but demand higher prices. 
       Rationally interested people buy what is in their self-interests and buy cheap.  Thus, rational suppliers of goods and services strive to find more efficient ways of producing what they sell and sell them cheap so that people would buy them. Mr. Smith reasoned that this process leads to more efficient allocation of goods and services in a political economy. 
      Planned allocation of resources, the rational Scotsman would say, is an inefficient way to run an economy. If in doubt see what happened in Communist Russia where despite having vast resources the people lived at third world state.
      Mr. Manga’s reasoning is understandable but flawed. It is flawed because he failed to grasp that capitalism is always seeking ways to manufacture things cheap and sell cheap and make profits. If capitalism works, as it is supposed to work, Africa’s cheap labor cost ought to be a magnet for European manufacturers to build their factories in Africa, pay cheap wages and then have cheap goods to sell in Europe. Companies that could do so would make profits Vis a Vis those companies that manufacture in Europe at high labor costs.
      Pure capitalism suggests that there ought to be a rush to move manufacturing to Africa. Such a rush took place when Western manufacturers moved their factories to Asia in the 1980s.   So, why are Western manufacturers leery of moving their factories to Africa?
      Because Europeans and Americans are not moving their factories to Africa, some Africans succumb to a conspiracy theory: they don’t want us to become developed because if we do we become a threat to their economy.
      But here are some facts to consider. Africa’s lay of the land does not yet have many of the things manufacturers’ desire. Infrastructure, such as good roads, railways, seaports, airports and transportation in general, electricity and good water source is absent in Africa.  There is no pool of well-trained middle class persons in many African countries able to work as managers and technocrats.
        Many African countries are bedeviled by corruption. For example, nothing gets done in Nigeria without someone giving bribery to someone.  There is no rule of law that would make manufacturers feel that the African polity is stable and that their investments are safe.
     Many factors conspire to make northern investors wary of investing their capital in Africa.  These factors play roles in Africa’s current backwardness.
      Mr. Manga’s thesis plays some role in the equation but is certainly not the only factor retarding Africa’s efforts at economic development. His proposition is certainly worth reading.
      Mr. Manga is an excellent writer; he clearly did his research and fished out information that supports his thesis. He presented his ideas in a readable book. I recommend that all those who are interested in development matters in Africa should read this book.

Ozodi Osuji,   PhD:                                                                                                                    January 25, 2014



“Bonyfish beware because the same net that caught the jawless fish, caught the cartilaginous fish” (Hamilton Ayuk). Beware earthly paradise seekers because there is a serpent in every paradise"(Hamilton Ayuk). "It is not how well you know a person; it is how well you treat them that they will live longer and happier with you." Idle people write, idler people read, and idlest people read and whine that idle people are taking their time (Hamilton Ayuk).

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