LIQUIDATE GOVERNMENT Part 1.

Government should not have stopped at liquidating Zambia Airways – they should have proceeded all the way – to liquidation of government itself!

By ZOL President.

It is very clear that Zambia’s economy has now reached critical crisis level, just as we predicted last year when we observed that the nation was moving at an uncontrollable speed in the wrong direction.

Mwanawasa is a good person, and even a good president – he should get credit for his strong stand against corruption and his willingness to see things change from the way they were done in the past. He has the determination to create a radical break from that past, distinguishing himself very aggressively from the failures that accompanied his predecessor’s administration. Every honest person must accept that this is commendable, notwithstanding other mistakes he might have made. The president has quite a good measure of integrity, especially compared to other African presidents, and the presidents we have had so far in Zambia (in my humble view).

Unfortunately, this is not the key to prosperity. If history and life in general has taught us anything, it is simply the fact that “goodness” and “morality” and all the positive aspects of ethical living and leadership, are never enough to actually change economies of nations. These things are good for the maintenance of wealth when it is created, but they are not enough for the actual process of wealth creation. A good man will know how to keep his wealth without abusing it or abusing his position of wealth, but to actually make that wealth he needs talents that transcend the realm of simple ethics or morality. For wealth creation, what is required is an adherence to another set of values, found in another completely different epistemological dimension: the realm of Logic. The realm of reason.

It is illogical to expect to create wealth while pursuing a socialist system, no matter how it is masked. The New Deal Government ministers are predisposed to socialist thinking because they believe that the reason Chiluba failed was because he practiced too much capitalism. They might never grasp the irony, but the truth is that Chiluba failed because of practicing too little capitalism rather than too much of it. But because they misunderstood the logic, they have decided to go many step backwards – against capitalism -- instead of speeding up the boat. The results are what we predicted last year.

Right now we are facing an unprecedented crisis in the nation caused by the news that the nation is expecting a budget over-run of more than 600 billion Kwacha. The IMF have added to the crisis by (justifiably) stating that they shall not release their pledges to Zambia unless it shows how it will deal with the over-run. The IMF knows that our government does not have an answer. This is because the answer is not found in the mindset of our government ministers – the advisors of the president. The answer cannot be found in a socialist, commandist mindset such as the one that is prevalent in this government, and even in the new minister of finance. The answer can only be found in a capitalist mindset.

Some people say that we should not be talking about ‘isms’ but get straight to practical solutions. This objection can only come from a dedication to strong ignorance. Philosophies are the powerful forces that lead the mind to achieve the right practical solutions. Practical solutions that are disconnected from the correct philosophies are always wrong. They are always random, irregular and unstable. Only solutions based on consistent philosophies have the chance of working as they can be easily predicted and tested under controlled circumstances. It’s a scientific principle.

Now let me get straight to the practical application of the capitalist philosophy in the current economic crisis. I wish to suggest to the good government of the republic of Zambia that it is time to liquidate government itself. This is the only solution right now that will deal with our current financial crisis, achieve great economic growth and place us in the ranks of nations that are headed for great prosperity in the globalising community.

Liquidate government. This suggestion is as serious as the problem it addresses. It will obviously be scoffed at by authorities who do not ever want to consider solutions that come from outside their intellectual terms of reference, but revolutionary answers always come from outside the box, as history has repeatedly shown. Answers to big problems are never found in the conventional modes of thinking, the textbook based bureaucratic mindsets. Liquidate the government.

The president must immediately constitute a task force to see how the government can be liquidated. I use the term ‘government’ not in the constitutional, legal sense of the word, but in the physical, structural sense. Government will still remain composed of Executive, Legislature and Judiciary. This is a definitive constitutional order. However, the constitution does not predefine the size and ultimate structural details of government.

I advise the president to start by liquidating most of the Government Ministries. This is a call that has been presented by other Zambians in many different and innovative ways, but it is a call that is always ignored, even by Chiluba himself, due to the opportunity cost that it presents in short-term political mileage.

By dissolving these ministries, government will have a chance to physically liquidate the assets that they own. If all the cars that these ministries own, with all the buildings they use, the furniture, computers, and so on, are liquidated, the government will gain enough money right away to solve its problems – it sounds too good to be true, but it’s as simple as that.

What this will mean is that the civil servants working in these ministries will have to be laid off. But isn’t this bad for the social stability of the nation? Not at all. The only reason that Chiluba’s privatisation and government reform programs led to the social problems we faced was because the people who were laid off were not given any money to sustain themselves. Because of the highly unstable and ever-depreciating Kwacha, the benefits these people were given were a mockery and therefore a precursor for the social crisis. But in this liquidation suggestion, everyone will be paid their dues when they are laid off. This will give them a chance to invest their money into all kinds of things, and this will in itself lead to increased economic growth. The growth will lead to more jobs – therefore the whole project will be balanced with no great pains.

But wait a minute? Doesn’t that sound too theoretical and wishful? It does. But it is not. It is the whole point in the liquidation formula. Government should sell all those assets so that it could raise enough money to pay people off.

If any accountant does a valuation of all the government assets, we will easily see that the government has so much money that it can easily pay off everyone well and remain with enough money to even cover its budgetary needs for a number of years. Nothing would lead to greater prosperity than such a situation.

Government (particularly the executive) has so many assets that they would have no problem at all in achieving anything they want if they sold them off. It is not just the government buildings, cars, and other administrative assets; government also owns many houses owned by a lot of its workers. These can also be valued.

Government could, for instance, decide that everyone who lives in a government house can get that house immediately as their retirement benefit. This is more money than they can ever dream of otherwise getting. This way, government could get rid of most of its workers in most towns and provinces. The other money in cash can come from the liquidation of their other physical assets as alluded to above. Just one vehicle owned by a minister would give government enough money to lay off a large number of workers with a generous amount of money. Each minister has four such cars!

The liquidation of government would not only raise this money immediately, it would also save government so much more money that an economic revolution would be inevitable. This would be the greatest achievement by any government in the history of Africa.

The kinds of savings that would be made baffle the mind. Do you know how much money government pays in electricity bills for all those government offices? How much car fuel is consumed? How much the telephone bills cost them? How much the paper and printing costs are per year? How much food they have to buy? How much water they consume? This figure alone is astounding. But even more remarkable is the famous wage bill itself. All those salaries will no longer have to be paid every month. This is nothing less than an economic revolution.

Other savings will include the trips that are made every week by ministers, directors and other workers to other countries – with the hotel bills and flight charges that accompany these. Add also the savings on time wasted due to the bureaucracies of these institutions. The word “revolution” would not even be adequate to describe the result of such an event. Liquidation is the only answer. And it is not even painful since the social aspect can easily be dealt with. There is no way those workers can be sad if they are given even a ten million Kwacha each – money that they have never seen in their lives (unfortunately) – money that can buy a lot of things in the Zambian economy. The Permanent Secretaries and Directors can simply be given their government houses and instantly retired as well – that would more than satisfy them because those mansions are more than enough. Every retired civil servant will be happy and so shall the economy.

Many of my readers would be happy with the suggestions so far except the final suggestion that I shall now make: complete the liquidation process of government by privatising all government owned companies. This is the only issue that stimulates fearful thoughts in many otherwise objective intellectuals.

I do not believe in commercialisation of ZESCO because that’s really a meaningless proposition. The same people who have always claimed that ZESCO should not be privatised because it is profitable are now proposing commercialisation. What does that mean? I thought commercialisation means making something profitable? So, if it has always been profitable then why are we proposing commercialisation?

ZESCO needs to be concessioned. And then, when it is ready, it must be completely privatised. Making a monopoly become “profitable” is a meaningless idea. We all know that. The problem with a government monopoly is that it does not need to be good for it to be profitable. Since the consumers do not have any other choice, the monopoly can simply demand very high rates and it will automatically become “profitable.” But the people will suffer. Marxist journalists have always defended ZESCO from privatisation because they believe that the company is profitable. However, what they do not know because of their steep ignorance is that when a company uses its static monopoly status to become profitable, it can only be at the expense of the entire economy. Manufacturers leave the nation, exports immediately reduce while giving in to unnecessary imports, jobs are lost, taxes increase, and people have less money to spend on their crucial needs. This is what happened in Chiluba because he refused to go all the way in the capitalist process. He put on the breaks when it mattered, maintaining big government size and maintaining the most expensive parastatals. He thought he understood the philosophy of capitalism and convinced every Zambian that he did – which is why everyone now hates capitalism. Had he not pretended that he understood it, or pretended that he was following it radically, the people of Zambia would have still kept their faith in this logic.

It is only logical that when government is liquidated, and most of its assets sold off or privatised, the economy of Zambia would progress. There is no reason anyone can dispute this because it is as simple as common sense. Try selling two of your three cars next time your children are about to die of hunger and see what happens – they will not die! You will have enough money to meet your necessary needs, and you will even afford more things. There is no reason that such practical common sense cannot be applicable at government level. There is no need for textbook theory here – it is just the elevation of common sense to its rightful posture.

END OF PART 1.

(In the next part, I discuss why government should only remain with three government ministries, and how they can easily achieve all the current functions of the other ministries by investing in modern computer technology - intranets, extranets and the world wide web. Welcome to Tomorrow!)

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