African Peasants and the Market System
“The twin keys to understanding the tragedy of Africa are 1) expropriation of peasant producers, often in the name of “modernization” and 2) ruinous state interventionism.”
In 1985, affairs on the continent of Africa were thrust into world attention. In that year famine took the lives of an estimated two million Africans. The drought of 1984 was commonly cited as the cause of the famine. While Africa had experienced many droughts before, none exacted a toll in human lives nearly as high as the levels reached in 1985. There is strong evidence that the principal causes of the famine were not meteorological, but human. The economic and political policies of the African states were to blame.
Indeed, per-capita food production in Africa began its decline in 1961. According to the World Bank’s 1986 World Development Report (Washington, D.C.: 1986), only two black African nations—Kenya and Malawi—out of forty-one are self-sufficient in food production.
Something is clearly wrong when starvation and other forms of human privation are commonplace on a continent as rich in natural resources as Africa. According to David Lamb, the continent of Africa “has 40 percent of the world’s potential hydroelectric power supply; the bulk of the world’s gold; 90 percent of its cobalt; 50 percent of its phosphates; 40 percent of its platinum; 7.5 percent of its coal; 8 percent of its known petroleum reserves; 12 percent of its natural gas; 3 percent of its iron ores; and millions upon millions of acres of untilled farmland. There is not another continent blessed with such abundance and diversity.”¹
The twin keys to understanding the tragedy of Africa are 1) expropriation of peasant producers, often in the name of “modernization” and 2) ruinous state interventionism, in the form of barriers to trade, high taxes, state investment, and kleptocracy, the rule of thieves.
Nor is the problem a lack of foreign aid. More than $90 billion in aid from international agencies and donor countries has been pumped into Africa since 1960. The tiny country of Tanzania alone received more than $3 billion in foreign aid between 1972 and 1981. Further, lack of foreign largesse cannot explain poverty; the prosperous and economically advanced nations of the West were not made rich by externally supplied economic aid. (See, for example, the work by Nathan Rosenberg and L. E. Birdzell, Jr., How the West Grew Rich: The Economic Transformation of the Western World [New York: Basic Books, 1986].) The root causes of Africa’s ills lie elsewhere.
The twin keys to understanding the tragedy of Africa are 1) expropriation of peasant producers, often in the name of “modernization,” and 2) ruinous state interventionism, in the form of barriers to trade, high taxes, state investment, and kleptocracy, the rule of thieves. I have explored the reasons for black Africa’s underdevelopment and poverty elsewhere (see especially my “Economic Atrophy in Black Africa,” Cato Journal [7] No. 1, Spring/Summer 1987, pp. 195-222). In this essay I will attempt to sketch briefly an alternative path for economic, social, and political development in Africa, offering academic-research suggestions for students in economics, anthropology, history, sociology, political science, and related disciplines.
Two Systems
The colonial system that spread over Africa left behind a significant legacy after the departure of the European powers; European-type nation-states and bureaucracies remained as the official form of political organization. This system was superimposed over a multifarious network of indigenous political systems, relying on custom, tradition, and other forms of authority. (See, for example, the important work of the historian Parker T. Moon, Imperialism and World Politics [New York: Macmillan, 1926] for a description of how colonial states were created.) Whether the legacy has been on balance positive or negative is not the focus of this essay. What is important is to realize that the African continent has at least two parallel political systems, sometimes overlapping and mutually reinforcing, and sometimes at odds.
The rise of Western-educated elites to the pinnacles of power in the new African states brought with it the attempt to imitate the West or the East, typically in totally inappropriate ways. This “development by imitation” took many forms: prosperous American farmers use tractors, so too must we in Africa; the Soviet Union has collectivized farms, so too must we in Africa. New York has skyscrapers, so too must we. Little or no thought went into the questions of why Americans used tractors (often unsuited to African soil), how well collectivized farms have performed in the USSR, or why New York has skyscrapers. Perhaps the most bizarre example of this imitation occurred in 1976 when President Bokassa of the Central African Republic spent $20 million to crown himself Emperor of the Central African Empire, just to prove that Africa too can have Emperors like Europe.
African states, in receipt of billions of dollars in foreign aid from Western nations, squandered this wealth on vast projects that bore little or no reasonable relation to the conditions of life in Africa. Systems of agriculture, manufacturing, and infrastructure were imported wholesale from the West, usually resulting only in enormous debts, ruined soil, rusting factories, and unused airports or highways in countries with little need for them. This enormous waste of resources was accompanied by “rent-seeking,” or pursuit of profits through the state, on the part of the ruling elites. In East Africa the peasants have a word for the ruling elites: wabenzi, men of Mercedes Benz.
Africa’s Indigenous Market Tradition
The majority of Africans are peasants, a term used not pejoratively but descriptively. They are mostly illiterate and tend to orient their lives more by custom and age-old practices than by the convoluted dictates and policies of national governments. The two systems—traditional and governmental—coexist in a complex relationship. When they do clash, as is often the case, the peasants tend to retreat to their traditional mould of rural life, self-sufficiency, and subsistence farming. (See the discussion of this process in Victor Azaya and Naomi Chazan’s essay “Disengagement from the State: Reflections on the Experiences of Ghana and Guinea,” Contemporary Studies in Society and History, January 1987.)
As state intervention leads to distortions, more interventions are “required” to correct them, leading to an expanding network of controls and the use of naked coercion to enforce them.² Like human beings everywhere else, African peasants respond to incentives. When penalized for producing, they produce less. A historicist model would deny “rationality” to peasants (or to non-Europeans) and consign them to a prerational “moral economy.” It is an easy step from this model to denial of human rights and liberty to such allegedly “prerational” peoples. (See, in this connection, the work of Samuel L. Popkin on Vietnamese peasants, The Rational Peasant: The Political Economy of Rural Society in Vietnam [Berkeley: University of California Press, 1979]. Popkin’s work contains a valuable generalized discussion of peasants as “rational problem solvers.” See also the essay by Sheilagh Ogilvie, “Toward a Critical Classical Liberal History,” Humane Studies Review [4] No. 2, Spring 1987.)
African peasants have traditionally been derided as “backward,” unworthy of serious study except by anthropologists with interests in primitive societies. This denigration of African traditions has produced feelings of inferiority among African elites. As the sociologist Stanislav Andreski (The African Predicament: A Study in the Pathology of Modernization [New York: Atherton Press, 1969]) writes, this “leads the rulers of Africa to give priority to obtrusive symbols of modernity—such as show hospitals, airports, big industrial projects, television stations, assembly halls—and to disregard more important but less conspicuous matters like fostering small work-shops. The economic planners would advocate for the importation of ruinously expensive tractors but not for introducing wheelbarrows and scythes, which would bring more palatable benefits.” (p. 87) For a broad criticism of the established model of development economics, see P. T. Bauer’s Dissent on Development (Cambridge, Mass.: Harvard University Press, 1971 and 1976).
While the traditional sector is almost universally denigrated, it is here that real and lasting solutions to Africa’s problems are likely to be found. It is in this sector that the majority of the population lives. The peasants are the backbone of African economies; they are the producers of Africa’s real wealth.
In East Africa the peasants have a word for the ruling elites: wabenzi, men of Mercedes Benz.
The production of large agricultural surpluses is the key to economic prosperity in Africa, and that means peasants should be allowed to produce for free markets. Precisely how these surpluses are generated, whether by “modern” or “primitive” techniques, is immaterial to a starving and destitute African population. It makes little difference to a starving person whether the fish on his plate was caught from a “primitive dug-out canoe” or from a “modern trawler” built in Norway. The real challenge for development in Africa is to turn to existing indigenous institutions, practices, customs, and techniques, including the despised “primitive dug-out canoe,” to generate large surpluses and allow the peasants to lift themselves out of poverty.
Contrary to popular development myths, historians have established that free trade and free markets existed in Africa as far back as the tenth century, well before the continent was “discovered” by European explorers in the fifteenth century. The writings of the early travellers to Africa documented a dense and complex web of continental trade and interregional exchanges. Free trade made possible the growth of many African empires in earlier times, including Ghana, Mali, Songhai, and Bornu in West Africa, and Great Zimbabwe, Chokwe, and Nyamwezi in Central and East Africa. (For a discussion of these trading empires, see my essay, “The Lessons of Africa’s Market Tradition,” Economic Affairs [7] No. 1, October/November 1986.)
The West did not invent, overnight as it were, democracy, free markets, and money; these institutions emerged over a long period and—in various states of development—also existed in Africa before the coming of the Europeans. The view that free markets, free trade, democracy, and free speech were “introduced” by Western imperialism and colonialism has done great great harm to Africa. After independence, African elites generally did everything they could to obliterate what were seen as legacies of colonialism, not realizing that they were destroying a large part of their own traditions.
Economic anthropologists such as Polly Hill have shown how systems of credit and land ownership reflect a market system, rather than “primitive communism.”
Research into these traditions can take many forms, including actually living in African communities and seeing how their economic and social systems work. This is preferable to relying on inaccurate, incomplete, and misleading reports issued by government agencies.
Such investigations could deal with the political life of African peoples. For example, certain tribes, such as the Tiv and the Ibos of Nigeria, the Konkomba of Togoland, the Kru of Liberia, and the Tallensi of Ghana are remarkable for their strong traditions of individualism. They may offer especially interesting case studies. (See, for example, A. Boahen and J. B. Webster’s History of West Africa [New York: Praeger Press, 1967] and African Kingships in Perspective: Political Change and Modernization in Monarchical Settings, Rene Lemarchand, ed. [London: Frank Cass and Company, 1977].)
The economic systems of Africa also are illuminated through such field research. Economic anthropologists such as Polly Hill have shown how systems of credit and land ownership reflect a market system, rather than “primitive communism.” (See her two excellent works, Rural Capitalism in West Africa [Cambridge: Cambridge University Press, 1970] and Development Economics on Trial [Cambridge: Cambridge University Press, 1986].)
Historical Approaches
A historical approach may also yield fruitful lessons. There were ancient civilizations and great empires in Africa. Many newly independent African states assumed the names of some of these empires; Ghana, Zimbabwe, and Burkina Faso are examples. The rise and fall of some of these empires provide interesting historical insights. For example, the empire of Dahomey was the most centrally controlled state in West Africa in the nineteenth century. Agricultural production was centrally planned by the state; all palm trees in the kingdom were counted and a constant check kept on their annual yield; taxation was about one-third of the total production; prices were fixed by royal decree. Dahomey collapsed under the weight of its own regulations. (See Boahen and Webster’s History of West Africa.)
The literature on past African civilizations is extensive. Among the works worth consulting are Basil Davidson’s The Lost Cities of Africa (Boston: Little Brown & Co., 1959) and A History of West Africa (New York: Anchor, 1966), J. D. Fage’s An Introduction to the History of West Africa (Cambridge: Cambridge University Press, 1962), Jacques Marquet’s and Joan Rayfield’s Civilizations of West Africa (Oxford: Oxford University Press, 1972), and Carter G. Woodson’s The African Background Outlined (New York: Negro Universities Press, 1968).
There are over two thousand tribes, or nations, in Africa. There is, therefore, an opportunity to search for commonalities among African political systems. For example, most tribal governments have a council of elders, which is much like a cabinet. The council typically consists of the heads of various extended families, or clans. In most tribal societies, this council has greater effective powers than the chiefs and can instigate removal of the chief if he flouts popular desire. The structure of such traditional political systems and their reliance on the consent of the governed deserves attention from students of African politics.
Two caveats should be noted at this point. First, much of the work of African scholars has tended to dwell on colonialism, racism, slavery, nationalism, and liberation. While these are indeed important topics, they have often obscured the equally (if not more) important understanding of the functioning of African societies outside of the experience of colonialism. Second, while bloody intertribal feuds have occupied much of the attention of historians of Africa, less attention has been paid to intratribal peace and cooperation, to the freedoms and rights tribespeople enjoyed within their own tribes. This was one of the reasons many Africans bore “tribal marks”—to distinguish members of one tribe from another, not only for protective reasons but also for the enjoyment of certain customary rights and freedoms. Just as the history of European societies is not exhausted by a history of Europe’s many bloody wars, neither is the history of Africa exhausted by a history of intertribal warfare.
In the study of economic institutions, it needs to be stressed that Africa’s traditions of free trade and free markets stretch back for centuries. Works that should be consulted by the student of African trade include P. T. Bauer’s West African Trade (New York: Kelley, 1967), Peter Garlick’s African Traders and Economic Development (Oxford: Clarendon Press, 1972), Claude Meillasoux’s The Development of Indigenous Trade and Markets in West Africa (Oxford: Oxford University Press, 1971), and Peter Wickins’s An Economic History of Africa (Oxford: Oxford University Press, 1981).
The works by economic anthropologist Polly Hill cited above, Rural Capitalism in Africa and Development Economics on Trial, also should be read. Hill is perhaps the most notable economic anthropologist to have done work in this area; Africa needs more Polly Hills to study indigenous modes of saving and systems of credit, investment, land tenure, and marketing and economic organization. Her work refutes many myths, including the myth of “communal land ownership” posing an obstacle to agricultural development. In fact, in many parts of Africa communal ownership poses little problem since usufructurary rights (the rights to use others’ property) can be exerted and enforced. While the lack of animal manure in many areas (due to the presence of the tse-tse fly) has led to different patterns of land ownership, this has not stopped markets in land from developing and contracts of lease and sale from being enforced in native courts.
Indigenous forms of economic organization often escape the attention of observers. This is especially so because they are not reported in governmental statistics; they are sometimes illegal and almost always despised as “backward and primitive.” In Ghana, cocoa farmers adapted the extended family system into a unique economic scheme called the abusa. Under abusa the net proceeds from the cash crop were divided into thirds, with one third going to the hired laborers and caretakers, one third going to the owner of the farm and one third set aside for capital expenditures. This system also permeated many other aspects of commerce in traditional Africa; native fishermen along the West African coast, for example, used a similar scheme. Under the rival but less common abunu scheme, net proceeds were divided in two, one part going to the workers and the other to the farm owner.
Another indigenous system is susu, a self-help communal saving-scheme that was popular during the colonial era. Participation was open, and each participant contributed a certain fixed amount into a fund, or “pot.” When the funds reached a certain amount, members took turns collecting it.
For many migrants to the urban areas, susu was their primary source of capital. They lacked the collateral to borrow from the colonial banks and were too far removed from the rural areas to draw funds from their extended families.⁴
In essence, susu was simply a form of savings that did not show up in national income accounting, thus giving the erroneous impression that peasants did not save. Of course, were the “primitive” susu system introduced to America it would be called a credit union.
It was quite easy for early writers to mistake susu for an extension of the all-pervasive family obligations and to derogate the system as “primitive communism.” But, in essence, susu was simply a form of savings that did not show up in national income accounting, thus giving the erroneous impression that peasants did not save. Of course, were the “primitive” susu system introduced to America it would be called a credit union.
Many other similar schemes are to be found across Africa. The “family pot” system (such as that of the Ewe seine fishermen of Ghana and Togoland, known as agbadoho) is typically managed by the head of the extended family for its general welfare. Besides loans to family members to operate businesses or to finance education, funds were also used to pay for funerals, maintain the family house, pay medical expenses, or invest in business enterprises. Contributions to the family pot, contrary to popular belief among foreign observers, were voluntary, not obligatory. Of course, a family member’s failure to contribute extinguished his access to the funds.
The exploration of these topics will help us to understand the real lives of African people, as well as to deepen our appreciation for the creativity, entrepreneurship, and abilities of human beings, who adapt themselves to their circumstances rather than to the dictates of intellectual elites. The sources cited above should provide a useful introduction to a great research program, one that will provide opportunities for students in economics, anthropology, sociology, history, political science, and many related disciplines.
Notes
¹David Lamb, The Africans (New York: Vintage Books, 1983), p. 20.
²Local staples must often be sold at government-dictated prices (in order to subsidize urban elites). In Ghana, when peasant traders refused to sell at below-market prices, markets were dynamited and destroyed by the Air Force and detachments of the Police Striking Force. This drove up prices of locally produced foodstuffs by more than 600 percent between January 1982 and April 1983, leading the state to set up Price Control Tribunals to hand down stringent penalties. See, for example, the report in the Ghanaian Times of June 12, 1982: “The Brong-Ahafo Tribunal imposed a $8,000 fine on Grace Lamiere, a popular baker in Sunyani, for buying a bag of flour above the controlled price.” (p. 8) The February 18, 1983, issue of West Africa reports that “An Accra trader, Umaro Shaibu, was jailed for 4 years by the Price Control Tribunal in Accra for selling a bottle of ‘Sprite’ for $2.50 instead of $1.00.” (p. 576) For a general discussion of the dynamics of interventionism, see Ludwig von Mises’s essay “Middle of the Road Policy Leads to Socialism” in his collection of essays Planning for Freedom (South Holland, Ill.: Libertarian Press, 1980).
³See, for example, “Informal Capitalism Grows in Cameroon,” New York Times, November 30, 1987, on the omnipresence of “tontines,” or informal savings and credit systems. Attitudes among some economists are changing, as the article notes: “For years development economists saw Africans’ tontines as archaic tribal institutions that would die out with the rise of modern economies based on European-style banking systems. But now many economists see the tontines as a highly efficient method of promoting grass-roots efforts in capitalism.”
⁴This is not much different from the “Dividing Societies” used by British industrial workers to accumulate savings and provide for medical needs in the late nineteenth and early twentieth centuries. So much for the charge of primitivism. See David Green’s Working Class Patients and the Medical Establishment: Self-Help in Britain from the Mid-Nineteenth Century to 1948 (New York: St. Martin’s Press, 1985).
George B. N. Ayittey, a native of Ghana, West Africa, is professor of economics at the University of Bloomsburg in Pennsylvania.