The Limitations of Zimbabwe’s Contenting Political Economy Paradigms

Flag_of_Zimbabwe.png

As the 2018 elections in Zimbabwe draw near, the political contest on which political party is best suited to steer the country towards a better future will be dominated by the economic agenda during campaigns. The kind of language that both ZANU PF and the opposition coalition led by the MDC (M) will use to persuade the electorate has become all too familiar.

On the one hand will be the nationalist/patriotic discourse celebrating land reform and advancing the programme for indigenisation and economic empowerment. Inherently connected to that is a sharp criticism of global imperial machinations against Zimbabwe through sanctions against a party determined to defend the fruits of its economic transformation following the fast track land reform programme. Underlying this discourse is the argument that Zimbabwe is using local economic transformation to challenge the worst excesses of enduring global imperialism. ZANU PF will again depict the opposition, particularly the MDC, as a movement that is severely compromised by collusion with the imperialist west to the extent that it will struggle to balance local national interests against those of the British and American governments.

Offering an alternative narrative to this discourse is opposition politics that will claim that the more immediate struggle is against nationalist authoritarianism. Making reference to the unending economic crisis, the opposition will argue that the ruling party presided over a poor human rights record, economic collapse characterised by high deindustrialisation, record unemployment, the informalisation of the economy and hyperinflation in the period between 2000 to 2009; as well as its contrasting current excesses of severe illiquidity. The suggested alternative will be re-engagement with the global economy through attracting investment and creating jobs for all.

The Utility of the Paradigms?

Both strategies are influential and very effective to respective constituencies of the political parties, but are also limited in terms of their capacity to sustainably develop a vibrant economy in the context of the complex global political economy. This is especially true as Zimbabwe has experienced tremendous changes in the nature of its society and economy, all of which have been shaped by the trajectory that its politics has followed. At the attainment of independence and for the better part of the first two decades, the political narrative followed the contours of the now infamous patriotic history narrative deployed to steer the power dynamics of the post-colony. Towards the turn of the century and influenced by a number of political and economic changes, the government shifted from its early collusion with colonial and foreign capital (the reconciliation of Zimbabwe with Rhodesia) towards a kind of decolonial turn characterised by the politics of radical economic redistribution of land and commercial resources. The shift, forced as it was by forces outside the corridors of power but ultimately shaped by consideration of political survival, represented a kind of exhausted nationalism. In fact, the patriotic narrative was criticised for elevating the record of the ruling party as one of the sole authority on liberation, transformation and empowerment while failing to call the state to account for the crisis it presided over since the 2000s.

Remembering History: The Nuances

Historians of Zimbabwe have indeed taken up the challenge to demonstrate that history is not limited to a narrative about “armed men liberating the land from white settlers”, that “the Zimbabwe crisis is by no means simply a land crisis. It is best understood as ‘a complex set of historically specific, interrelated and mutually reinforcing crises that need to be unpacked and analysed in relation to one another’”. Historians cautioned that reducing history to political agendas results “in the flattening of difference; the privileging of certain voices over others; and the identification of hegemonic nationalism as the bearer of improvement and progress”. This is not to discredit the nationalist nuances of Zimbabwe’s history, but to call for more holistic and inclusive histories. Such an approach decentres politics and incorporates other perspectives in the search for a more sustainable challenge to the colonial legacies that we still face today.

It was in this context that the politics of democratic change emerged, promising to repair the economic damage caused by the government’s radical turn. The MDC and its various splinter factions’ main criticism about economic collapse was that ZANU PF had failed to manage it and lost the confidence of foreign investors.

Although the ruling party never sounds a trumpet to acknowledge this criticism, some its senior members accept that the country is in crisis. But they offer a different explanation. In their view, the radical changes to the economic structure from one based on the colonial distribution of land and other resources were critically overdue and required redress. To them, such a marked shift in racial-economic relations upset the diplomatic relations between Zimbabwe and the imperial west resulting in sanctions. But the critical economic imbalance was still overdue and was confronted by the deployment of big man authoritarian politics, requiring a stalwart figure that could stand up to western condemnation. But in spite of the limits of the nationalist party’s patriotic narrative and the democratic discourse’s appeal, the country became split between the various emerging interests. The economy, once formally based, anchored on agrarian development and white monopoly and foreign capital, enjoying high employment and a vibrant secondary industry was gradually transformed into one where the mass of the unemployed exploited a vent within an informal economy arising out of formal economic collapse and a reconstructed agrarian base. In this new narrative, the patronage based politics of ZANU PF is pitted against the democratic and formal economic recovery discourse of opposition politics whose main challenges is representing workers in an economy dominated by informality and a dwindling labour base.

Counting the Opportunity Cost of Reform

But they represent a very specific local political and economic dynamic that does not adequately confront a much broader issue in Zimbabwe’s global economic context. The nuanced character of Zimbabwe’s economy is that interests have become widely disparate, depending on economic access to resources.

The main issues being addressed, and indeed for political expediency, are temporal. The nationalist party’s discourse of transformation was land, but this had not adequately yielded the expected transformative outcomes as poverty still reigns and the economy struggles. The brief moment of the GNU and its currency stabilisation, on the other hand, failed to persuade the nation to fully back the political change, democracy and economic recovery discourse as the 2013 elections demonstrate. Certainly, the concerns of Zimbabwe’s electorate are much more nuanced and disparate than initially envisaged. For example, the concerns of the beneficiaries, at lower level of the value chain, of land reform are their continued and undisturbed access to this resource, just as is the case with people whose livelihoods have been based on state grants for small businesses in trade, fisheries and other trades. This includes, higher up the value chain, tenderpreneurs and politicians who have benefited from national resources, for example in the mining in diamonds, platinum and gold. To convince these beneficiaries of the imagined progressive alternative of democracy politics would be difficult. On the other hand, to convince the suffering middle class, mass of unemployed youths and informal traders that the exclusive ZANU PF project can sustainably address the national economic challenges has proved inadequate.

The Limitations of the Redistributive or Radical Narrative

For me, the political philosophy of Zimbabwe is too narrowly confined. We tend to forget that any economic transformation, redistributed or not, if limited in scope to the national context will not have a sustainable long term effect on the economy. In my view, the discourse needs to incorporate broader geo-political-economic considerations. For example, to what extent can external markets determine the fortunes of our economy? I could argue that the best example on how a state can sustain a formal vibrant national economy can be derived from the UDI Rhodesian experience. Despite global sanctions against the colony, the Rhodesian Front government managed to keep their heads above water, managing to even prosper more significantly in comparison to our entire postcolonial experience. But of course, the crucial benefits were for the minority white constituency while Africans were kept at the periphery of this economy. This is among the reasons why the liberation war was waged, to rid the country of this discrimination, but the point is that the Rhodesians economic coordination machinery worked to their advantage.

At independence, much the same structures were maintained, in which the markets, especially the external markets which Zimbabwe was re-integrated into, influenced the direction of politics to a significant degree. This partially explains why the ZANU PF government could not immediately implement radical economic changes. As they were pushed into a corner, the changes emerged from outside the state, from landless people seeking land, workers suffering collapsing standards of living, war veterans demanding compensation, indigenous business people unhappy with exclusion from the mainstream economy. The opposition rode this wave of mass discontent to challenge nationalist rule. In response, the state was forced to implement radical changes to appease pockets of the discontented through land reform, compensating war veterans and instituting programmes of indigenisation and economic empowerment. But this had the adverse effect of affecting the markets, and the result was economic plunge, most manifest in hyperinflation and demonetisation.

The Global Markets: The Missing Link

But all political formations, although disagreeing on the process, concur that many of these changes were necessary. Yet they all regret the response of the markets and desire a return to reengaging them. Therein lies the problem. The discourse of attracting investment needs to consider the power that these markets have in determining the political course of the nation. Markets have complex relationships with developing countries, anchored as they are on highly nuanced operations. The financial investments on stock markets, money markets, bonds markets etc, depend on a very specific model of economy. Whatever the economic reconfigurations within Zimbabwe and despite who leads it; beyond temporal constituency appeasement, my main worry is the ability and extent to which the markets will take us back to the beginning. This concern is never seriously considered in our political discourse but needs some level of attention. It should not just be about retaining power or political change, but should prompt active imaginations about how to confront a fast-changing global economy that has the power to direct how economies integrated into it operate. For me, economic transformation limited to domestic considerations is inadequate and can be rendered hopelessly unsound if they fall out of line with what investors expect if they are to realise profitable returns. Not that we should comply with market demands, far from it, we should understand how they work so that we are able to navigate them and derive optimum benefit without compromising the balanced aspiration of the disparate interests of those who constitute what can become the nation of Zimbabwe. At present, we are too fractured on competing visions of what the nation should be and the type of economy that should support it, but I will urge all the leaders to consider imagining this local/global economy nexus as part of their very crucial strategies towards appeasing their various constituencies in terms of the immediate demands placed on them.

Tinashe Nyamunda is a Postdoctoral Research Fellow with the International Studies Group, University of the Free State, South Africa.

This blog post was originally published as an article in Gravitas Volume 1. Issue 9/2017.

One thought on “The Limitations of Zimbabwe’s Contenting Political Economy Paradigms

  1. The following essay is about how Zambia should apply its land laws regarding taxation. This will result in more national prosperity as found (for example) in Estonia.

    Socially Just Taxation, and Its 17 Effects On: Government, Land Owners, Communities and Ethics

    Our present complicated system for taxation is unfair and has many faults. The biggest problem is to arrange it on a socially just basis. Many companies employ their workers in various ways and pay them diversely. Since these companies are registered in different countries for a number of categories, the determination the criterion for a just tax system becomes impossible, particularly if based on a fair measure of human work-activity. So why try when there is a better means available, which is really a true and socially just method?

    Adam Smith (“Wealth of Nations”, 1776 REF. 1) says that land is one of the 3 factors of production (the other 2 being labor and durable capital goods). The usefulness of land is in the price that tenants pay as rent, for access rights to the particular site in question. Land is often considered as being a form of capital, since it is traded similarly to other durable capital goods items. However it is not actually man-made, so rightly it does not fall within this category. The land was originally a gift of nature (if not of God) for which all people should be free to share in its use. But its site-value greatly depends on location and is related to the community density in that region, as well as the natural resources such as rivers, minerals, animals or plants of specific use or beauty, when or after it is possible to reach them. Consequently, most of the land value is created by man within his society and therefore its advantage should logically and ethically be returned to the community for its general use, as explained by Martin Adams (in “LAND”, 2015, REF 2.).

    However, due to our existing laws, land is owned and formally registered and its value is traded, even though it can’t be moved to another place, like other kinds of capital goods. This right of ownership gives the landlord a big advantage over the rest of the community because he determines how it may be used, or if it is to be held out of use, until the city grows and the site becomes more valuable. Thus speculation in land values is encouraged by the law, in treating a site of land as personal or private property—as if it were an item of capital goods, although it is not (Prof. Mason Gaffney and Fred Harrison: “The Corruption of Economics”, 2005 REF. 3).

    Regarding taxation and local community spending, the municipal taxes we pay are partly used for improving the infrastructure. This means that the land becomes more useful and valuable without the landlord doing anything—he/she will always benefit from our present tax regime. This also applies when the status of unused land is upgraded and it becomes fit for community development. Then when this news is leaked, after landlords and banks corruptly pay for this information, speculation in land values is rife. There are many advantages if the land values were taxed instead of the many different kinds of production-based activities such as earnings, purchases, capital gains, home and foreign company investments, etc., (with all their regulations, complications and loop-holes). The only people due to lose from this are the “army” of tax collectors employed by the government, as well as those who exploit the growing values of the land over the past years. Here “mere” land ownership confers a financial benefit, without the owner doing a scrap of work. Consequently, for a truly socially just kind of taxation to apply there can only be one method–Land-Value Taxation.

    Consider how land becomes valuable. New settlers in a region begin to specialize and this improves their efficiency in producing specific goods. The central land is the most valuable due to easy availability and least transport needed. This distribution in land values is created by the community and (after an initial start), not by the natural resources. As the city expands, speculators in land values will deliberately hold potentially useful sites out of use, until planning and development have permitted their values to grow. Meanwhile there is fierce competition for access to the most suitable sites for housing, agriculture and manufacturing industries. The limited availability of useful land means that the high rents paid by tenants make their residence more costly and the provision of goods and services more expensive. It also creates unemployment, causing wages to be lowered by the monopolists, who control the big producing organizations, and whose land was already obtained when it was cheap. Consequently this basic structure of our current macroeconomics system, works to limit opportunity and to create poverty, see above reference.

    The most basic cause of our continuing poverty is the lack of properly paid work and the reason for this is the lack of opportunity of access to the land on which the work must be done. The useful land is monopolized by a landlord who either holds it out of use (for speculation in its rising value), or charges the tenant heavily for its right of access. In the case when the landlord is also the producer, he/she has a monopolistic control of the land and of the produce too, and can charge more for this access right than what an entrepreneur, who seeks greater opportunity, normally would be able to afford.
    A wise and sensible government would recognize that this problem derives from lack of opportunity to work and earn. It can be solved by the use of a tax system which encourages the proper use of land and which stops penalizing everything and everybody else. Such a tax system was proposed 136 years ago by Henry George, a (North) American economist, but somehow most macro-economists seem never to have heard of him, in common with a whole lot of other experts. (I would guess that they don’t want to know, which is worse!) In “Progress and Poverty” 1879, REF. 4, Henry George proposed a single tax on land values without other kinds of tax on produce, services, capital gains etc. This regime of land value tax (LVT) has 17 features which benefit almost everyone in the economy, except for landlords, tax-men and banks, who/which do nothing productive and find that land dominance has its own reward.

    17 Aspects of LVT Affecting Government, Land Owners, Communities and Ethics

    Four Aspects for Better Government:
    1. LVT, adds to the national income as do other taxation systems, but it should replace them.
    2. The cost of collecting the LVT is less than for all other production-related taxes, since tax avoidance becomes impossible–the various sites are visible to all, and their ownership is public knowledge.
    3. Consumers pay less for their purchases due to lower production costs (see below). This creates greater satisfaction with the management of national affairs.
    4. The speculation in and withholding of unused land is eliminated, see item 7 and the national economy stabilizes. It no longer experiences the 18 year business boom/bust cycle, due to periodic speculation in land values (see below).

    Six Aspects Affecting Land Owners:
    5. LVT is progressive–owners of the most potentially productive sites pay the most tax. Urban sites provide the most usefulness and resulting tax. Big rural sites have less value and can be farmed appropriately to their ability to provide useful produce.
    6. The land owner pays his LVT regardless of how his site is used. A large proportion of the present ground-rent from tenants becomes the LVT, with the result that land has less sales-value but a significant “rental”-value (even when it is not used).
    7. LVT stops speculation in land prices because the withholding of land from proper use is not worthwhile.
    8. The introduction of LVT initially reduces the sales price of sites, even though their rental value can still grow over a longer term. As more sites become available, the competition for them is less fierce.
    9. With LVT, land owners are unable to pass the tax on to their tenants as rent hikes, due to the reduced competition for access to the additional sites that come into use.
    10. With LVT, land prices will initially drop. Speculators in land values will want to foreclose on their mortgages and withdraw their money for reinvestment. Therefore LVT should be introduced gradually, to allow these speculators sufficient time to transfer their money to company-shares etc., and simultaneously to meet the increased demand for produce (see below, items 12 and 13).

    Three Aspects Regarding Improved Communities:
    11. With LVT, there is an incentive to use land for production or residence, rather than it being unused.
    12. With LVT, greater working opportunities exist due to cheaper land and a greater number of available sites. Consumer goods become cheaper too, because entrepreneurs have less difficulty in starting-up their businesses and because they pay less ground-rent–demand grows, unemployment decreases.
    13. Investment money is withdrawn from land and placed in durable capital goods. This means more advances in technology and cheaper goods too.

    Four Aspects About Kinder Ethics:
    14. The collection of taxes from productive effort and commerce is socially unjust. LVT replaces this national extortion by gathering the surplus rental income, which comes without any exertion from the land owner or by the banks– LVT is a natural system of national income-gathering.
    15. The previous bribery and corruption for gaining privileged information about land cease. Before, this was due to the leaking of news of municipal plans for housing and industrial development, causing shock-waves in local land prices (and municipal workers’ and lawyers’ bank balances).
    16. The improved use of the more central land of cities reduces the environmental damage due to a) unused sites being dumping-grounds, and b) the smaller amount of fossil-fuel use, when traveling between home and workplace.
    17. Because the LVT eliminates the advantage that landlords currently hold over our society, LVT provides a greater equality of opportunity to earn a living. Entrepreneurs can operate in a natural way– to provide more jobs because their production costs are reduced. Then untaxed earnings will correspond to the value that the labor puts into the product or service. Consequently, after LVT has been properly and fully introduced as a single tax, it will eliminate poverty and improve business ethics.

    References:
    1. Adam Smith: “The Wealth of Nations”, 1776.
    2. Martin Adams: “LAND– A New Paradigm for a Thriving World”, North Atlantic Books, California, 2015.
    3. Mason Gaffney and Fred Harrison: “The Corruption of Economics”, Shepheard-Walyn, London, 2005.
    4. Henry George: “Progress and Poverty” 1897, reprinted by Schalkenbach Foundation, NY, 1978.

    TAX LAND NOT LABOR; TAX TAKINGS NOT MAKINGS!

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s