afam4eva: I'm not totally against copying but if we must photocopy let's copy everything.

shymmex:

How do you mean let's copy everything? We copied the American system of government, but implemented the wrong version - and the same goes for our educational system. We need to start looking for our own model, which will be more suitable in the Nigerian context.

afam4eva:

We copied it halfway. Our leaders are notorious for copying what will benefit them(presidential system) but not what will be of benefit to Nigeria(true federalism).

yeswecan: @Shymmex

You are involved in the wrong debate just like most "African scholars". We take countries like the UK and try to create a debate on the basis of their experience - instead of ours. You talked about your pan-africanist background hence once advocated distribution of wealth - but have we created any wealth in the first place? So how can we move to the stage of distributing what we do not have?- development is a curve, a learning curve so your question is the wrong one...

naptu2: Nigeria has always been a mixed economy. The only example of extreme capitalism that I've ever seen is Russia in the early 1990s.

Our mixed economic system sometimes tilts to the left and sometimes to the right. In fact, one of the major problems we've had in Nigeria is that, under military rule, we tilted a little too much to the left. The Federal Government controlled everything! We are still trying to correct that, but corruption and selfishness have been the stumbling blocks.

However, I agree with yeswecan, the issue isn't how to distribute slices of the cake, the question is how to bake a bigger cake.

shymmex:

I disagree that there is no wealth to be distributed in Nigeria. The same argument was made in the 50s and 60s - and Awolowo proved them wrong; he created a social welfare state in Western Nigeria; and there was also a lot of surplus. If we can cut corruption in Nigeria by at least 50%, become prudent and cut the wastages in all government parastatals - I think Nigeria has more than enough.

yeswecan:

Awolowo proved what wrong? You are a bullionist to think that Nigeria, or by extension Africa, is wealthy. We have never EVER experienced development. How do you define wealth? This is funny. I take your point on government wastage of resources not wealth. Nigeria is a poor country by any standard- and has always been, maybe poorer then which is relative but says nothing about wealth. You are talking about re-distribution - distribution of what? Awolowo has surplus of what? You see wealth as paper money.

Corruption is not the problem with development with Nigeria - take it or leave it. The notion that if we cut corruption then everything will fall into its proper place is laughable.

shymmex:

We can agree to disagree on your last comment.

How can we create "wealth" in Nigeria, if you think we're that "poor?"

yeswecan: . . . . Let me give you a practical example of what i mean by Infant industry - i use this example all the time.

Japan, economically weak after the Second World War, imposed high tariffs on foreign products and huge government intervention in order to build the country’s domestic firms. Its automobile industry furnishes a useful example.

Japanese auto industry had been built up behind a thick, impenetrable wall of tariff and non-tariff barriers. The Japanese government ousted General Motors and Ford and consistently shielded Toyota by means of protectionism and government bailout before the infant company could stand. As Chang (2009) puts it, "[i]t took Toyota more than 30 years of protection and subsidies to become competitive in the international car market". Before 1970, Japanese automobiles were unsatisfactory, and trade restrictions were necessary to ensure the survival of Japan’s fledgling auto industry Free market advocates doubted the strategy of protectionism, and made constant calls for a more orthodox economic strategy. For instance, the then Governor of the Bank of Japan, who strongly opposed the protection of the auto industry, wrote: "Efforts to foster an automobile industry are meaningless. This is a period of international specialization. Since America can produce cheap, high-quality cars, should we not depend on America for automobiles?" Now take a look at japan auto industry.

In this sense free trade is not only a rip-off but it is unnecessary for poor countries. We do not have a production base we are talking of trade – you have to produce before you trade. One serious problem is that economies is centered on trade (free-trade argument) rather than production (technical know-how).

The infant industry protection will enable us to focus on a particular production sector until it is strong enough to compete with world class . . then move to another, and then another, and then another. This is the only way you attain development - historically speaking . . I can provide you with more example if you need me to . .

shymmex:

I'm trying to get something to eat quickly, I'll dissect your comments - and post a reply in a bit.

yeswecan:

Now you are asking a real question. But let us take a step back and ask what the difference between rich and poor countries is. The more you think of it the more you realize that the main difference is activity-based. Poor countries focus on diminishing returns while rich countries increasing returns. If you are an economist you may be familiar with diminishing returns but not increasing returns - the latter law was removed by David Richardo, the architect of mainstream economies, in order to accent his theory. Let me take the liberty to expand a little.

Diminishing Returns occur when one factor of production is held constant, while the other factors of production are expanded. As a consequence of the one factor being held constant, the increased input of the other factors yields less and less benefit. In general terms, any company or nation could be subject to Diminishing Returns in any economic activity.

Increasing return is the opposite of diminishing retune – In some economic activities the more you increase production the better produce there is and the cheaper the cost of production. So increasing returns is the reduction in cost per unit resulting from increased production. Examples of increasing returns are manufacturing industries. It might take Microsoft 10 million dollars to produce software but the more they produce the lesser the cost of production.
Diminishing returns goes with perfect competition – indistinguishable products (farm products) An idealized market environment in which every market participant is too small to affect the market price by acting on its own. Increasing return goes with imperfect competition - The situation prevailing in a market in which elements of monopoly allow individual producers or consumers to exercise some control over market prices. E.g Auto Company – the prices can be fixed.

Here lies the basic difference between resource-based economic activities and all other economic activities: When output is increased in any resource-based activity - agriculture, fishing, and mining - there is always one point, after which the crucial resource is no longer available at the same quality or in the same quantity as the previous ‘unit’ of the same resource. If specialised in agriculture, a nation will sooner or later have to resort to inferior land. If specialised in mining, the nation would have to mine deposits with decreasing quality of ore. As a result, the resource-based nation is locked into an economic activity which yields less and less as its specialisation in the resource-based activity deepens. The more such a nation produces of the specific resource-based product, the poorer it gets, and the more the environment suffers. This is what I call the double trap of resource based nations: poverty and economic degradation increase hand in hand as the nation continues to specialise according to its comparative advantage in international trade.

The real question is how we erect a manufacturing sector. The only way in through infant industry protection – this is how all nations developed – from Britain, USA, Japan, South Korea, Germany – just name it.

yeswecan: . . . . Let me give you a practical example of what i mean by Infant industry - i use this example all the time.

Japan, economically weak after the Second World War, imposed high tariffs on foreign products and huge government intervention in order to build the country’s domestic firms. Its automobile industry furnishes a useful example.

Japanese auto industry had been built up behind a thick, impenetrable wall of tariff and non-tariff barriers. The Japanese government ousted General Motors and Ford and consistently shielded Toyota by means of protectionism and government bailout before the infant company could stand. As Chang (2009) puts it, "[i]t took Toyota more than 30 years of protection and subsidies to become competitive in the international car market". Before 1970, Japanese automobiles were unsatisfactory, and trade restrictions were necessary to ensure the survival of Japan’s fledgling auto industry Free market advocates doubted the strategy of protectionism, and made constant calls for a more orthodox economic strategy. For instance, the then Governor of the Bank of Japan, who strongly opposed the protection of the auto industry, wrote: "Efforts to foster an automobile industry are meaningless. This is a period of international specialization. Since America can produce cheap, high-quality cars, should we not depend on America for automobiles?" Now take a look at japan auto industry.

In this sense free trade is not only a rip-off but it is unnecessary for poor countries. We do not have a production base we are talking of trade – you have to produce before you trade. One serious problem is that economies is centered on trade (free-trade argument) rather than production (technical know-how).

The infant industry protection will enable us to focus on a particular production sector until it is strong enough to compete with world class . . then move to another, and then another, and then another. This is the only way you attain development - historically speaking . . I can provide you with more example if you need me to . .

shymmex:

I've read this post about three times, and I still don't see the correlation between it and extreme capitalism

shymmex:



How can we create "wealth" in Nigeria, if you think we're that "poor?"

.

yeswecan: @Shymmex

You are involved in the wrong debate just like most "African scholars". We take countries like the UK and try to create a debate on the basis of their experience - instead of ours. You talked about your pan-africanist background hence once advocated distribution of wealth - but have we created any wealth in the first place? So how can we move to the stage of distributing what we do not have?- development is a curve, a learning curve so your question is the wrong one...

Afam4eva:
I'm not totally against copying but if we must photocopy let's copy everything.