Enveloped in car culture, our yachting-addicted, computer-dependent, frequent-flying comrade Doug must really not delay a trip to reality any longer. As to your earlier point that Patrick loves jet-setting from Belfast to Alabama to Philadelphia/Baltimore/Washington to Harare to Jo'burg (my initinerary these last 39 years), what's the big deal? We've always said, internationalism of people, not globalisation of capital, right? You're with us on that distinction (made eloquently by JMK in the Yale Review, 1933), eh Doug?
If so, join us in the harder of the two cases, Zimbabwe. Let me do an extended argument to see if you've picked up any fatal *technical* flaws (by the way, didn't I give you this long tome a couple of years ago?)...
***
Patrick glorifies
Rhodesian
economic management:
Since my relatives--white settlers, I am first to acknowledge, fighting for racism-fascism against liberation and democracy--were integrally involved in increasing locally-manufactured products from 1,059 in 1967 to 3,837 in 1970, I shall defend their honour on purely logistical-technical grounds. Doug, just for now, spare us the concerns you have about understanding how trains can be made to run on time under such socio-political conditions (few have spent more hours than me researching modes of white control, of capital accumulation and of superexploitation of black people, especially rural women).
Instead, on to the technical question of whether Zimbabwe can produce what's needed for a decent way of life. Rich folk could, the argument below demonstrates. The multitudes could go even further, if the politics come right (I mean, left).
(Don't feel obligated to wade through this... just come around one day and you'll have a very high- quality, luxury-goods-satiated holiday, thanks to residual import-substitution-industrialisation plus subsequent delinking-"of-a-special-type").
(From Uneven Zimbabwe: A Study of Finance, Development and Underdevelopment, Africa World Press, 1998)
Control over the Rhodesian financial system was vital for the first, high-growth period of Unilateral Declaration of Independence (UDI) (1966-74), both because reigns on finance encouraged capital accumulation to proceed in a direction that was temporarily sustainable in the local hothouse, and because the state effectively prevented geographical capital flight (Seidman, 1986, 64-67). "The directors of the national economy were already using their main weapon," recounted John Handford (a Rhodesian Front economist) (1976, 16): "bottling up capital by severe exchange control restrictions."
In the same vein, Roger Riddell's extensive study of the country's manufacturing sector boom concluded that (contrary to accepted wisdom), "the major import-substitutions thrust occurred prior to UDI, with the major source of manufacturing growth in the UDI period being domestic demand expansion." According to Riddell (1990, 341,344), increased buying power within Rhodesia was responsible for a vast amount (61%) of the manufacturing growth which occurred during the years 1964-78, as compared to import substitution industrialisation (30%) and export-based growth (9%).
[FN: Manufacturing subsectors which grew
especially quickly through domestic market
expansion were transport equipment (whose
growth was entirely due to domestic
demand), beverages and tobacco processing
(93% due to domestic demand), construction
materials (88%), chemical and
pharmaceutical products (77%), and
foodstuffs (75%). In contrast, import
substitutions were made to good effect
mainly in textiles (responsible for 56% of the
subsector's growth), metals (37%) and paper
products (37%), while exports during UDI
were nearly insignificant, making an
impression only in textiles (responsible for
14% of growth) and metals (13%).]
... The head of Dunlop's local subsidiary later explained, "Having taken a deep breath and having assessed the direction in which the economy should go, by the end of 1966 Rhodesian businessmen were exhibiting a remarkable degree of optimism, ingenuity and determination that the economy must not be destroyed by the new conditions produced by world sanctions" (Handover, 1977, 12). Merchants and financiers who had earlier backed an anti-UDI compromise, organised the import control system nearly overnight. Handford (1976, 6,7) describes how "Rhodesian industrialists jumped in quickly, made arrangements with overseas organisations, set up things in back alleys--one thousand new industries in a few years." Sanctions-busting became a national pass-time, with "a network centred on obscure offices in back streets of cities in Europe-- as fast as one London press-man uncovered a hide- out, another would be set up."
There were only rare desertions by business leaders. In late 1968, the heads of Rhodesian Iron and Steel Corporation (E.S. Newson) and Standard Bank (E. Campbell) issued critiques of UDI and called for a settlement and fresh infusion of foreign funding. Prime Minister Ian Smith's reaction, according to Windrich (1978, 149), was quick and dirty: "This was the first real opposition the Smith regime had encountered since their decision to go ahead with the illegal declaration of independence, in spite of the dire economic forecasts announced at that time. In response, Mr. Smith launched a fierce attack on the `old gang,' in league with the Argus Press, for trying to prepare the country for a sell- out." The sell-out allegation became yet more concrete in December 1969, when the main financial journalist of Argus' Rhodesia Herald (R. Nicholson) was convicted of spying on behalf of the Central Intelligence Agency, and was bailed out of prison by the United States government (Joyce, 1974, 315).
More important than business leaders' willingness to participate in the illegal UDI was the unprecedented manner in which capital was accumulated. Overcapacity had been the rule across industry prior to UDI, with capacity utilisation down to below 60% in 1962 (Ramsey, 1974; Davies, 1982). What was particularly important about how that capacity was taken up during UDI was the extraordinary flexibility shown both by capitalists (who organised an extension of product lines largely on the basis of existing plant and equipment prior to 1970) and by black workers who adapted to the initial skills shortage caused by early 1960s white emigration, and to the new production demands.
Rhodesia suddenly produced its own breakfast cereals, cube sugar, high quality furniture, lollipop sticks, canned asparagus, bird seed, fifteen varieties of hair shampoo, ten different hand cleaners, five lipsticks, seven varieties of swimming pool paints, and ten varieties of pet foods. These corresponded to a vast expansion in local industrial production units (ie, with ten or more workers) from 665 at UDI to 1,036 five years later, as the number of different products increased from 1,059 in 1967 to 3,837 in 1970 (Wield, 1980, 107,127; Nyathi- Mdluli, 1980, 84). By 1971 it was said that the homes of even high-income whites could be entirely furnished with Rhodesian-made goods (Handford, 1976, 141). The backwards and forwards linkages of luxury goods production were tightly coordinated, aided by very high levels of corporate concentration within most sectors of the national economy.
Even so, fixed capital investment remained relatively meagre in manufacturing until 1973, and the capital intensity of industrial production remained inordinately low until the mid 1970s investment deluge. One calculation of the incremental capital-output ratio for manufacturing for 1971-74 was 1.76, as against comparable figures in developing countries of between 2.5 to 3.5 (World Bank, 1983, 23). Moreover, thanks to import protection, Rhodesian manufacturers showed a learned capacity to produce on relatively "short runs" and thus, according to Handford (1976, 145), local manufacturers had "the opportunity of taking immediate advantage of changes in market demands, in a way that is not possible with the great industrialised countries."
Extensive (capital-widening) rather than intensive (capital-deepening) investment was initially the rule not only in manufacturing but also in agriculture. White commercial farmers attributed 41% of their growth in output from 1965-74 to land expansion, which also involved increasing the number of black employees by 70,000 during that period. Notwithstanding the hardships inflicted by extremist Rhodesian Front land policies, peasant farmers also managed to increase their land under cultivation by 26% during the first few years of UDI, as output increased by 32%--hence four-fifths of growth was a result of land expansion (Mumbengegwi, 1986, 208). Uneven sectoral development between capital goods and consumer goods was, partly as a result, kept effectively in check for a full decade, even if unevenness in luxury versus basic needs consumption was increasing.
Also during this time, the balance of power in the industrial class struggle swung heavily towards capital, and a lowly 8% of gross industrial revenues were spent on black workers' wages in 1969. Even in the mid 1970s with a liberation war underway, Handford (1976, 145) could brag, "At present, possibly the biggest advantage enjoyed by Rhodesia in regard to the more developed nations is its absence of labour troubles." There were, interprets Lloyd Sachikonye (1986, 251), no fewer than 68 trade union leaders in detention in 1973:
It is scarcely surprising that in the 1960s and
1970s a dark cloud hovered over trade
unionism in Zimbabwe. A decimation of the
leadership of unions through its incarceration
in detention or exile, the onerous labour
laws, in addition to the dubious role of
international labour institutions such as the
Brussels-based International Confederation of
Free Trade Unions--all had a generally
weakening impact on the unions.
In sum, not only did finance stimulate buying power, but at least three other accommodating features also help account for the success of UDI in broadening and deepening the economy: state- directed investments, the prior overcapacity in manufacturing, and an extremely repressed labour force. Sanctions and planned investment ensured that the law of value did not fully operate according to international norms. Capital expenditure did not become excessive until the mid 1970s, and overproduction tendencies were initially muted.
***
(later in the book)
>From Independence in 1980, was there an inward-
oriented, basic-needs alternative to the Washington
Consensus? The basic argument for moving along
an export-oriented road was well-summarised by the
Confederation of Zimbabwe Industries (CZI) (1986,
17-19):
Zimbabwe has passed the "shallow" stage of
simply replacing formerly imported
consumer goods. It is standing on the
threshold of a deeper phase, in which
equipment, intermediate goods, machine
tools and processes are being designed,
modified and manufactured for use in the
manufacturing sector itself and other sectors
such as agriculture, mining, energy and
telecommunications... Within Zimbabwe's
manufacturing sector there is a very elaborate
and diverse system of linkages. At the level
of its 33 subsectors, it is estimated that about
70% of all possible linkages within
manufacturing are taking place.
But the CZI's analysis accepts as a premise the structure of the economy--especially the skewed structure of effective demand--and in doing so begs three questions: first, what of the 30% more "possible linkages" within manufacturing; second, what of the disproportionalities between capital goods and consumer goods that could conceivably be addressed with certain forms of state intervention; and third, what of the discrepancies between luxury and basic-needs consumer goods?
The last point in particular bears closer attention, since the potential for further "inward industrialisation" along this path was substantial. For example, as shown in Chapter Nine, housing is a commodity that can be produced with very minor import costs in Zimbabwe. Had there been a more equal distribution of income and strategic targeting of government subsidies after independence, housing could easily have been the basis for a successful Keynesian "kick-start" and antidote to stagnation. And thorough-going land reform (as well as proactive intervention in financial markets and industrial organisation) had been a key element of some East Asian industrialising countries' strategy for developing an internal class base for consumption of basic manufactured goods, and was occasionally suggested as the basis for inward- oriented capital accumulation (Robinson, 1988).
Such approaches would not have solved the deep-rooted industrial overaccumulation crisis, but would probably have delayed and dampened the crisis by combining the best tendencies of manufacturing growth in the early UDI period--the broadening of production, the closer articulation with local markets, the localisation of decision- making, and the control of financial markets that would make all the above feasible -- with the post- independence "Growth with Equity" rhetoric of meeting democratically-determined basic needs. But to understand why such a strategy would not be pursued in Zimbabwe, no matter its manifold advantages, requires consideration of how financial power-brokers and processes operated within and outside the state (Chapter Seven), in speculative markets such as the Zimbabwe Stock Exchange and real estate (Chapter Eight), and in both urban areas (Chapter Nine) and rural settings (Chapter Ten). Only then can the devastation caused by international financial control of much policy- making in Zimbabwe (Chapter Eleven)--and specifically the imposition of ESAP (Chapter Twelve)--be understood from the perspective that there were indeed paths to less uneven development, even if these were never really terribly well-mapped, much less explored.
***
And from another little article, out soon in Jnl of Southern African Studies:
Economic Policy for
Post-Nationalist Zimbabwe:
Outward or Inward Orientation?
Abstract
Should Zimbabwe be increasingly or
decreasingly tied into the world economy?
The question has been debated not only in
public, but in the highest circles of the main
ruling and opposition parties, in key civil
society organisations, amongst government
officials and, perhaps most pointedly, in the
February 2000 Human Development Report
on Zimbabwe cosponsored by the United
Nations Development Programme. To
address the issue of international integration
with rigour, the country's post-Independence
financial, trade and investment liberalisation
must be considered in historical perspective.
With the exception of reversals during the
period 1997-present, the period since 1980
witnessed the relaxation--first gradual, then
after 1990 rapid--of a set of national
regulatory techniques established during the
1920s, enhanced during the 1950s and
cemented during the 1965-79 period of
Unilateral Declaration of Independence. The
success of the liberalisation process is hotly
contested, and the current turmoil in
Zimbabwe rests to some extent upon tensions
(inequality, worsening unemployment,
deindustrialisation, heightened shortages of
basic needs ranging from land to housing to
power) that were exacerbated particularly
since the early 1990s adoption of structural
adjustment. The implications of failed
outward orientation, as well as the entire
history of economic strategy, are more
important to consider, at a time of nearly
unprecedented social debate over the
character of politics and economics in a
potentially post-nationalist era.
Economic Policy for Post-Nationalist Zimbabwe:
Outwards vs Inward Development?
"The overall model chosen to integrate the
economy into the international markets...
These measures should aim at avoiding the
appropriation of rents by suppliers of
nontradables and workers. That is, they
should maintain the real wage low, so that
excess profits accrue to capital... In carrying
out all these activities, a close alliance
between government and private agents must
be developed."
Manuel Hinds, World Bank Economist
Outwards vs. Inwards Development Strategy:
Implications for the Financial Sector,
Washington, DC, World Bank, 1990, pp.15-17.
*** FAST-FORWARD TO THE CONCLUDING 'GRAFS:
In sum, international economic integration has had a devastating impact on Zimbabwe. If this is the case, which way forward?
One set of answers has been supplied by the February 2000 Human Development Report, sponsored by the United Nations Development Programme but involving both officials and leading civil-society intellectuals (associated with the Poverty Reduction Forum and Zimbabwe Institute of Development Studies), has come to similar conclusions about the difficulties, after a detailed study of the background to and course of structural adjustment. The report (UNDP/PRF/IDZ, 2000: 82) makes six recommendations for government economic development policy--the last two of which are worth citing in full--with which it is appropriate to conclude our deliberations on Zimbabwe.
1) Overall objective: restore confidence by
creating conditions of fulfillment of basic human
material and social needs, and by opening up
democratic space for dialogue in all sectors of
life...
2) The hitherto neglected responsibility of
ensuring conditions for the reproduction of
labour and ensuring a life of dignity must form
the core of the new strategy...
3) Better integration of gender concerns...
4) A well-focused land reform and agricultural
regulation policy framework are necessary...
5) Restore production and safeguard the
domestic market from external competition in
respect of essential commodities and services, as
a basic complement to fiscal and monetary tools.
Probably considered subsidies and tariff
protection might be necessary.
6) Carry out an audit of imports and introduce
measures to cut down all inessential imports and
luxury products. Carry out a similar audit of
debt, retire illegitimate debts, and negotiate with
the creditors for the payment of the legitimately
incurred debts on the principle of joint
responsibility. Put in place capital controls,
regulate the banking sector, and review financial
liberalisation measures to develop an
indigenously led banking sector.
The UNDP/PRF/IDS (2000: 83) report concludes by noting that such recommendations hark back to earlier periods of state intervention:
Zimbabwe has a way out as it moves into the
third decade of its Independence. It has a
rich dual heritage. One, ironically, is the
heritage left by the UDI regime that built
itself up on a largely internally-oriented
economy with minimal dependence on the
outside world. Its illegitimacy was the cause
of its demise. The second legacy is that of
Chimurenga (liberation war). That spirit is
still and often not properly channelled. The
people of Zimbabwe can, once again, assert
their primacy and with sober and deliberate
intervention in national matters bring back
the state and economy to serving first and
foremost the interests of the people based on
people's efforts and resources, and not one
based on foreign dependence.
If current and future leaders do not follow advice of this sort, and there is no basis for believing that the advice will be taken prior to the 2002 presidential election, Zimbabwe's prospects are unequivocally gloomy. For while Mugabe has regularly contested the moral and political acceptability of the power relations associated with structural adjustment, he has offered nothing to either shift power or even improve the technical management of the economy. The appointment of a relatively Washington-friendly finance minister (Simba Makoni) in July 2000 and other "technocrat ministers" will not change matters.
Instead, it is probably the social, labour and related movements which are the logical vehicles of an inward-oriented strategy. They must contend with a divided opposition, and win the internal struggle over immediate post-nationalist policy...
Ultimately, the progressive movements can, as the UNDP noted, take confidence from previous episodes of tough macroeconomic management: watertight exchange controls; careful reflation of the economy through strategic state spending; prescribed assets on financial institutions; increasing nationalisation of strategic sites of the economy; directed investment; creative juggling of import/export requirements; default on outstanding foreign debt; and a more general commitment to "get the prices wrong," if need be, to assure maximum local backward/forward linkages. The last two times such policies were adopted, during the 1930s and just after the Unilateral Declaration of Independence was declared in 1965, the Zimbabwean (then Rhodesian) economy grew at nearly double-digit rates each year for a decade. On those occasions, growth through delinking occurred even without the now absolutely necessary reorientation of production to meet basic needs, particularly of rural women, particularly in areas that should otherwise be easy to expand--rural water/sanitation/small irrigation systems, electricity, public works--without massive new import requirements. These are probably the minimal policy arrangements in the sphere of political-economy required for Zimbabwe to prosper during a post- nationalist era.