LIQUIDATION OF GOVT NOT THE SOLUTION.

RESPONSE BY ZOL PRESIDENT.

Dear Lienda,

You have written a very long email that I believe is quite representative of the main arguments that a lot of Zambian intellectuals give to defend their antipathy to capitalism (and perhaps to my capitalist articles at ZOL). In this particular email / article, I will respond to your main points only, due to limitations of space and time. I will comment on the debt issue in another email, depending of course on how you respond to the current points in this mail (i.e., if you demonstrate an inability to be completely honest, intellectually, it is my principle to discontinue further discourse as that would equate my sanctioning of it). Okay, let's get on with it.

I think that the difference between you and me lies in one very small attitudinal point that you briefly alluded to in your article:

"We all need companies to be profitable but this obsession of profit that leaves workers poorer by condemning them out of employment is what I do not subscribe to."

My views are extremely simple (but not simplistic). What is the purpose of a company? The purpose of a company is to make money. You yourself have admitted that. If you make a company today wherever you are, your reason is that you want to make money, period. To make money obviously means to make 'profits'. If you have not made a profit then you have not made money - you have lost money (and time), and it means you have not served the purpose for which you formed the company. It doesn't get any simpler than that.

So, if it is true that the purpose of a company is to make money, then yes, everyone who makes a company must be obsessed with nothing other than the purpose of that company: money making. If you have a guitar, you know that the purpose of the guitar is to 'make' music. The purpose of a guitar is not gardening or to be used for playing badminton. If you did that, you would be abusing your guitar because you are not "obsessed" with its only purpose: music.

A company, therefore, is for nothing other than profit. The reason the concept of companies came about in the first place is to build entities that would make profits. I know that you think that a company also has the purpose of creating jobs, but that's absolutely false. Jobs are just tools for the company to make profits. Jobs are just like computers or typewriters or office buildings or whatever else is helping the company to fulfil its purpose. Thus, if a company does not need two accountants, it should get rid of one of them because its purpose is not to give jobs but to make profits. I would like to believe you have no argument against this - it's common sense.

What I have described above is exactly what happens when a company is privatised. Under government hands, a company is usually being abused because it is not being used for the purpose it is meant for. Under government hands, a company can be used, among other things, for the purpose of creating jobs, which as we have seen, is the reverse of common sense: jobs are there for the company, not the company for the jobs.

The government must privatise every company under them simply because they usually abuse every such company by using it for a purpose it was not intended. When a private owner gets it, he realises he does not need a deputy chief accountant, a financial manager, an assistant deputy accountant, and three advisors to the assistant deputy accountant! He gets rid of these redundant positions and the unintended result is that the unemployment level in the nation goes higher. And the Post Newspaper or AFRIDAD magazine immediately complain that privatisation is bad and immoral because it is creating an "army" of unemployed people - and everyone who sees the simple logic of reverting a company to its true purpose is judged as being an IMF/WB stooge or a sell-out!

What you are recommending, therefore, is that a wrong thing (abuse of purpose) be done for the sake of employment levels in the nation. That, in my view, would be just deception. You want government to abuse the purpose of a company just because you want people to think they are earning a living when in fact they are not. If the company they are working for is loss making then they are not earning a living (because they are not making money); they are simply being deceived into thinking they are - there is actually someone else somewhere who is doing the earning and they are simply doing the living from someone else's money; to me this is the immoral part (a point I will expand on later).

If you truly believe that companies should give jobs to people, whether or not they are needed in the profit function, then why don't we just have the government give these people free money? Really, it is even better for these extra, redundant people in these parastatals to just stay at home and to just go to get their salaries from the government without doing anything. You do not realise that keeping the extra people who are not productive in a company simply adds to the costs of the company, besides the wage bills. The electricity costs, the water costs, the unnecessary phone bills, the extra accessories costs, the extra office space, etc are higher because of the redundant, surplus workforce. So, it is even more sensible to just tell them to stay at home and to come and get money at the end of the month if what you want is for them to not be 'unemployed'. But that means the government should give money to everyone else who is unemployed. In short, your position is simply absurd, logically speaking.

On to your next point about ZESCO privatisation. My response is essentially the same as above. A company's purpose is to make money; any other use is an abuse of it. ZESCO is not there to provide jobs to people, firstly, and secondly, it is not there for the purpose of electrifying rural areas for free; that's not the purpose of a company. This is just a fact about the concept of a company and if you have a problem with facts then you have a problem with reality. What you need to do in that case is simply to try to understand what the purpose of a company is. If you think it has other purposes than to make profit, then you will have to answer the logical implications of such a fallacy (see argument above).

If ZESCO is privatised, they (the company managers) will stop doing things that do not make sense to them (i.e. business sense or common sense). And this is the way humans are supposed to live. Forcing a company to do what does not make sense to it is just the same as forcing another individual to do what does not make sense to him – this is the essence of slavery. Don't you think it is immoral for you to force another person (or collection of persons) to do something that he knows in his own mind does not make rational sense to himself? Well, a company is just an extension of an individual businessman. It does not make sense for ZESCO to be giving electricity to some areas for free just because they cannot afford it or to employ more people than it needs just because it wants to provide jobs to the economy.

You might reply that this is the reason why ZESCO has to be kept in government hands. You want to keep it in government hands so that it might continue to do things that do not make sense for the company's own interests, as a corporate entity. You want to keep it in government hands so that it can continue to be doing things that the company knows are against its purpose. In other words, you want to keep it in government hands so that it can continue being irrational - for the sake of electrification of the rural areas and for keeping jobs.

What you do not realise is this: when companies are in government hands, the people are living in a false reality. People who are not producing anything are made to think that they are earning something. People who are not able to afford certain services are made to think they deserve to receive those services. This makes people think that the government has fixed the economy when it is really just a mask over the true realities of the situation. Unless the people are exposed to the real realities of their lives, they will never demand that the government stops making mistakes in their decisions, especially their spending. The reason that you think that the government does not need to reduce its size or spending radically is because you see electricity going to the rural areas, and so on, and things look fine for those areas. You are deceived by the mask; the fact is that these areas should not be receiving any electricity because the people there can not afford it. They cannot afford it because the economy is still messed up by bad socialist decisions (perfected by our first dictator, Kenneth Kaunda, and continued to this day) such as the ones you are suggesting now. The fact that they receive electricity is just a distortion of reality to make you think that everything is fine. Kaunda went as far as even giving people free mealie meal, thus deceiving them into thinking everything was fine – you see, Kaunda simply took your logic that poor people need free services to survive to the limit. If you can give them electricity for free, why can't you give them food for free? It's simply a distortion of reality and it has proved time and again that it only creates higher poverty.

The fact that so many people are employed by parastatals/government is equally a distortion of reality, not different from the deception Kaunda practiced. We shall never become rich as a nation for as long as we continue valuing the distortion and rejection of reality. Problems can only be solved when they are faced within the parameters of truth and reality, using the tools of reason and rationality. People will become serious with stopping excessive government expenditure and stripping its size (govt liquidation) when the mask is taken off and they begin to get what they really earn from this dead economy: nothing. When people get exposed to these true realities, they will not allow the president to just get up and tell them bluntly, “I will not reduce government size no matter what you say!” as he effectively did the other day. We can afford to have a government making mistakes like that because the brunt of true reality is being masked from the people under the current system that gives electricity to every area, and free jobs to many unproductive people in parastatals. The people cannot protest against such statements because they think things are fine under the distorted reality.

What makes this whole arrangement so immoral and absurd is a simple economic axiom that you have probably heard of: there is no such thing as a free lunch (M. Friedman). What that means in this case is that for every unproductive person who keeps his job (because his company is owned by the government), there will be one productive person somewhere (in private sector) who is paying for his salary. Did you know that? The budget this year said the people getting over five million kwacha should pay 40 per cent income tax, almost half of what they EARN. Do you know why? So that the government can use it to pay the excess workers in government who are doing nothing because their jobs are superfluous. The productive manufacturing companies are also being forced to pay higher rates for electricity by the government monopoly, ZESCO, because it needs that money to keep taking electricity to rural areas. In the end, these companies which were originally attracted to Zambia because of the low production (electricity) costs see no point in staying here any more. They leave the country and relocate to Zimbabwe or Botswana – and you complain that they are just “greedy neo-colonialist capitalists” who never put the interests of the nation first but “are just obsessed with profits”!

This drives me to the last point. Why I want government liquidated. My article suggested that they should remain with only three ministries, and send the rest of the workers home, basically. I know this sounds unfair on all those workers, but this is because you are not thinking about the purpose and functions (of an entity or institution). In your entire email you only argued about the plight of the workers in case of privatisation/liquidation and made no mention of whether they are useful or not; this is apparently not that important to you. The fact is that most of those workers are not needed at all, but they are in government simply because the government is doing the same wrong thing with itself that it is doing with the parastatals: changing its purpose to that of providing jobs. Government is abusing its purpose because of ignorance, if not dishonesty. It thinks its purpose is to provide jobs to people when its purpose is really to provide certain services to the nation, services that cannot be provided by the private sector. The Ministry of Lands, for example, is there to sell land to the public, and so on. When you visit the ministry of lands today, you might have to wait for a whole hour before someone attends to you. And when someone does finally come, they will tell you to wait before they bring you the information you are looking for - that's another hour - as they go and search through huge piles of paper!

The fact is that all those processes can easily be automated by putting everything in a real-time dynamic computer database and perhaps even dumping it on the internet (for those who use the internet) so that you don't even have to go there physically. But you know why the government might not want that? Because it would mean many people in that Ministry losing their jobs - all those attendants who go to search manually through the books will be laid off. If you think in terms of jobs, computerisation is a bad thing, so you elect to keep things in the ancient era. If the government sat down and looked at how many of those jobs are completely unnecessary or how many can be replaced by computerisation, they will find that they do not need whole ministries operating in different huge buildings with huge electricity costs, and cars, and ministers, and so on. They will find that they can fit all of them in one relatively small building and still provide all their services much faster and more efficiently. Because of this, the government would have to liquidate all these ministries and save huge costs. But because this will also send people out of their jobs, people like you think it is morally right for government to maintain inefficiencies for the sake of jobs. You keep us in the Stone Age so that we might maintain the higher employment levels. You want us to wait for five hours before we have someone attending to us at government ministries - for what? - so that we maintain these inefficient jobs. And worst of all, you punish the productive sector so that these same unproductive jobs might get paid. You force a man to pay for the salary of another man who is doing nothing just so that you might avoid an "army of unemployed people." It is immoral to do that. Why don't you donate your own money every month (40 per cent of your salary?) for keeping that deputy minister's car full of petrol or for paying the irrelevant attendants at Ministry of Lands who spend hours looking through files for information that would be accessed in four seconds on a simple intranet? I, for one, do not believe that my money should be used for such inefficient nonsense; if you believe yours should, then it should also be your moral obligation to gladly donate it to government to keep maintaining these inefficiencies.

That, in a large nutshell, is the reason I prescribe liquidation of government, privatisation of all parastatals, and the application of modern technologies to replace all the otiose and redundant jobs in government.

I believe I have shown logically why I hold my position, and I think I might have helped dispel your suspicion that it is the IMF or World Bank - institutions that I care nothing for - that have financed my opinions. I do not have the immorality to represent another man's position on any issue, no matter how much money is offered. I represent only my own mind, and that's an eternal principle of mine. If you truly want to "correct" my position, you must use the same standard I have used to arrive at my conclusions: the standard of rational logic. Without it, no amount of preaching, denigrations, rhetoric or 'inspiring' will change a rational mind - that's just the way it works.

I thank you, my brother.

ZOL President.