Impact of economic problems on social life

Problems such as religious conflict, tribalism, racism and above all the greatest forms of conflict, war, have roots in economic factors. Our needs and wants are far more numerous than our means of satisfying those needs.

To put this in ordinary language, while most of us would love to have all kinds of services and goods, none of us has the money to buy everything. It has been said that the really rich person is the one who is contended with what he has. He that is not contented with what he has will be struggling to become richer and richer in order to acquire those other things which are beyond his reach.

To achieve perpetual social and political stability, we must understand the problems of economic organisation. How do all things we see in towns and rural centres come to be produced? How do they find their way to markets?

We should answer this question under two headings:

a)  What to produce: In a regimented economy, those in authority decide what everyone should produce and consume. This method was adopted in what were called socialist or communist countries. The fact that this system has collapsed and people there have reverted to the free-market system proves that centralised decision making has limitations even greater than those of free enterprise or capitalism.

Whether we live under free-market system or under communism, there is the inexorable problem of scarcity. The factors of production, capital, labour, land as well as entrepreneur are scarce.

Capital in form of machine is obviously very scarce in Malawi. We heard on the radio that a fleet of tractors has arrived from one of our friendly donors. This is welcome news. But tractors will not be available all over the country at the same time that they are needed.

Land used to be abundant in the past, but no more. Shortage of land requires us to decide whether to grow a cash crop or a food crop, but not both.

Superficially, there is plenty of labour in Malawi, more than can be employed. But some jobs require skills and there are few people with skills. Big businesses are not being undertaken because Malawi lacks top-notch entrepreneurs those prepared like Christopher Columbus to sail into uncharted seas.

b)  For whom do we produce? In a democratic country, this question has to be answered in consultation with the people. What we have produced, we must decide how to share it.

In the Thursday, December 22 2011 edition of The Nation we learned that not only maize prices have been raised by 50 percent, but that selling is by rationing. This means that there is limited quantity available.

It is commendable to ration scarce supplies. This is the age of a zero-deficit budget. It is obvious that at the beginning most people did not understand what the zero-deficit budget entailed. Well, it meant living with austerities today hoping that the day after tomorrow we may have more to share.

Austerities must be implemented with the principles of ethics of equality in mind.

To ask the poor to sacrifice proportionately more than the poor is not only unfair. Whether we hear of social disturbances, the basic cause is not scarcity, but unjust sharing of what is available. Giving more to him that has already get enough and deduction from someone who does not have enough is a philosophy of injustice and a seed of conflict.

In some countries, when a government inaugurates austerity measure, the first thing it does is to reduce salaries of Cabinet ministers and top civil servants by 10 percent. The less paid are able to endure their hardships better if they know there are no privileged groups among them.

In Malawi, instead of proposing to increase salaries of our legislators, we should actually reduce their salaries by 15 percent and cut short sittings of Parliament so as to save on allowances. Top civil servants salaries should also be cut. Only those of the lower cadres should be considered for revision upwards. In this way, the zero-deficit will be accomplished with justice.