Friday, July 29, 2005

Mugabe needs to read Hayek

If I remember correctly, Mugabe got a ph D from a London university by mail while he was in detention...the degree was in economics.

Now, the problem with many economics degrees is that unless you studied at the Univ. of Chicago, they tended to stress centralized planning, aka socialism. And, of course, Mugabe is a Marxist.

So the LINK
for today is from the think tank the Cato Institute (libertarian--think "government should stay out of our way" type pro business philosophy) :

Mugabe needs to read Hayek

.....Fast-forward to Zimbabwe in the 21st century. Between 1999 and 2003, its economy contracted by more than 30 per cent. Last year, unemployment stood at 80 per cent for the economically active population, and income per head was lower than in 1980 - the year Mr Mugabe came to power. Life expectancy fell from 56 years in 1985 to 33 years in 2003. Inflation, after rising to 500 per cent in 2004, continues at triple digits. Foreign direct investment and tourism have plummeted. In January, more than half of Zimbabwe's population needed emergency food aid. Of a total 13m population, 3m to 4m Zimbabweans have emigrated abroad.

What led to this? In 2000, Mr Mugabe gave the green light to his supporters to invade commercial farms, many of them held by white Zimbabweans. Private property rights of commercial farmers were revoked and the state resettled the confiscated lands with subsistence producers - many with no previous farming experience. Agricultural production plummeted.

The farm invasions had economic ripple effects. The banking sector, which used farm land as collateral, was hit by bad debt and curtailed the issuing of new loans. The manufacturing sector, which relied heavily on processing agricultural goods, went into a tailspin. Declining domestic production deprived Zimbabwe of the ability to earn foreign currency and buy food overseas. Famine ensued.

Mr Mugabe's response was to rig elections and tighten the government's noose around the economy through price controls. Many prices — including those of bread and gas — were set too low. That led to shortages and the emergence of black markets. As more of Zimbabwe's economy moved underground, tax revenue dried up and the government coffers emptied.

The emergence of the black markets was partly why Mr Mugabe decided to launch operation Murambatsvina in May. The security forces arrested more than 20,000 vendors and destroyed their vending sites. They levelled entire townships where the government was unable to exercise control over the shadow economy, leaving some 700,000 people homeless. Zimbabwe's Catholic bishops warned: "We have on our hands a complete recipe for genocide; we're witnessing a tragedy of unprecedented enormity." They may yet be proven right. According to Didymus Mutasa, one of Mr Mugabe's ministers of state, Zimbabwe would be better off with only 6m people, with our own people who support the liberation struggle." The rest are evidently expendable.

Just as Hayek warned, the government's initial attack on private property led to intervention in the economy and, concomitantly, the destruction of political freedom in Zimbabwe. If Mr Mugabe continues along the path marked by other socialist dictators, the world may yet see Zimbabwe descend into an orgy of violence...

Heads up was from Donjim at Dappledthings...and, oh yes...he also posted a link to the comic book version of Hayek LINK

we report, you decide...

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