ActiveCitizenship 101: Economic Manifesto for Value Proposition: What needs to be done?

There is an ancient Chinese aphorism that says, "Better light a candle than curse the darkness."

We need not to be fond of "cursing the darkness" by mourning, wailing and lamentation without offering alternative solutions by "lighting a candle." An active citizen should not be an agent to amplify lamentation, wailing and invectives.

The solutions being suggested are from a centre-right (#centralist) perspective. This is compared to the #HardLeft and #HardRight positions.

Such a centre-right model is stimulative of the private sector while the government has four key roles:

1. business friendly legal, regulatory and policy initiatives;

2. infrastructural development priorities;

3. infrastructural spending (procurement);

4. prompt payment of procured goods and services.

This means the government isn't demobilized but be considered as a key player in the economy that doesn't undermine business interests, property rights, due process and rule of law. Instead of wanting to create many million jobs, there is need to be the government should actively facilitate the creation of "million businesses." That provides both a distinction and a difference.

In the immediate and short term, there is need to do away with the "bad or toxic politics" that are fractured and alienating of business activity and investor confidence. The prohibitive and punitive aspects of doing business that are scaring away FDI and lines of credit needs urgent fixing.

With or without own currency, any national economy has to generate forex.

In the immediate term, the following has long term effect as legislative and policy interventions:
1. A public education system that advances Self Worth, agency, power of causation, innovation, and critical and creative thinking.
2. Prudence in fiscal governance and the exercise of public power to avoid fraud, abuse and waste. [1].
3. Ease of doing business so that there is a market economy, investment for competitive industrialisation and infrastructure development leading to job creation. Endless workshops, conferences and public speeches of intent around this issue are now an irritant as if people don't know what needs to be done and how.
4. Constitutionality: there should be public accountability (s68), the right to life (s48), liberty, dignity and security (s49, 51-54), private property (s71) and a due process of law (s69-70, 85-86). [2].

Causes of Economic Growth

There are only a few ways to generate economic growth:

1. Manufacturing instead of trading of natural resources: this is the conversion of economic resources ("factors or inputs used in producing goods or providing services divided into human resources and non-human resources, such as land, capital goods, financial resources, and technology") to produce finished goods.
   
   2. Educated middle class: policy initiatives and legislative processes that should lead to the growing of a skilled labour force because more educated workers generate more and better economic goods and services.
   
   3. Modern industrialisation: the creation of superior technology or other capital goods. The rate of technical growth and capital growth is highly dependent on the rate of savings and investment, since savings and investment are necessary to engage in research and development.
   
   4. Labour specialistion: an increase of specialisation so that labour becomes more skilled at its crafts, raising its productivity through trial and error or simply more practice. [3, 4]

Agency and power of causation

To create is to have or produce something out of nothing like an architect who creates a house or building from his/her MIND.

This means creativity is a mental exercise. We need to exercise both Creativity and Thinking. Being human means to be a Creative-Thinker.

Every human being has the cognitive power and capacity to be reasonable, discerning and causative for anything. Poverty starts in the MIND not materially.

Thereafter, after we have done the work of an architect to creatively think, we need to be builders or constructors of reality. We need to act on our thoughts. We need to CONVERT our thoughts into matter.

Being builders means as human beings we use elements and aspects of nature to have what we would have creatively thought about. The result is a human construct. Material is converted from an idea or thought.

Elements and aspects of nature need human EFFORT to be useful to our lives. Useful in the sense of meeting a need or providing a solution to a problem.

We did not create rocks that we now call minerals but human beings agreed amongst themselves to give value on some specific stones so that they are precious or have commercial (tradable) value. Before that consensus, they were just rocks in the wild. Human beings CONVERTED them into a specific use through exchange in commercial value.

Nature on its own needs human creative thinking and then EFFORT to build and construct.

The top ten global confectionery companies that manufacture chocolate are (not in any order): Nestle (Switzerland), Lindt (Switzerland) Cadbury Schweppes (United Kingdom), Ferrero SpA (Italy), Callebut (Belgium), Mars (USA), The Hershey Company (USA), Kraft Foods Inc (USA) Meiji Seika Kaisha Ltd. (Japan), Barry Callebaut AG (Switzerland) Ezaki Glico Co (Japan).

Israel does not have much land and it then produced one of the best irrigation and greenhouse technology and also leads the world in developing and exporting green technologies.

The country is also a pioneer in geo-thermal and solar energy, the world's leading company in geo-thermal power.

Japan's Nippon Steel Corporation is the world's second-largest steel producer in volume and the second most profitable steel company in the world. The materials to produce steel arrive in Japan at the steelworks found in coastal towns on one end and leave as exports at the other end of the same town. Japan does not have iron ore or coal as natural resources, apart from fish.

By volume, Toyota is the largest motor vehicle manufacturing group followed by General Motors (USA), Volkswagen (Germany), Ford (USA), Hyundai (South Korea), PSA Peugeot Citroen (France), Honda (Japan), Nissan (Japan), Suzuki (Japan). By country, Japan is the second largest motor vehicle producer after China, followed by the USA, Germany, South Korea, Brazil and India. Japan does not have a single raw material for the automotive industry, apart from fish.

The Japanese consumer electronics industry is one of the most prominent industries in the world and is the world's largest electronics manufacturer by companies such as Sony, Pentax, Casio, Citizen Watches, Hitachi, Mitsubishi Electric, Panasonic, Roland, Sharp, Canon, Epson, Yamaha, Sanyo, Fujitsu, Korg, Fujifilm, JVC Kenwood Inc, Toshiba, Pioneer, Nikon, TDK, Nintendo, Olympus, etc.

“Japan is the largest consumer electronics manufacturer in the world due to its high concentration of electronics companies, dominant global market share in electronics, and high quality of its products.” – Wikipedia. Japan has only fish as natural resource.

According to the World Trade Organisation (WTO), South Korea is the 8th largest exporter in the world after China, Germany, USA, Japan, France, the Netherlands and Italy, followed by United Kingdom and Canada. South Korea is a country with the least natural resources, just like Singapore.

Within the Top 50 developed countries, one finds industrial powerhouses (not in any order) – Germany, Japan, South Korea, Singapore, Belgium, United Kingdom, Iceland, Luxemburg, and Switzerland do not have any natural resources to match their economic might except that they continue to prove that industrialization is the key to economic development, high employment and very low levels of poverty.

The main chocolate exporters in the world are all European, with the four largest countries, according to World Trade Organization statistics, being Germany (US$1.5 billion exports in 2003), Belgium ($1.4 billion), France ($856 million) and the Netherlands ($821 million).

None of these chocolate-producing countries are among the list of those producing cocoa. They are the biggest producers and among the most consumers of chocolate.

Relatedly, abundant natural resources (land, minerals, sun-hours, a tropical climate, etc) in Africa have created a comfort social condition and industrial inertia leading to very low levels of industrial ingenuity, innovation and creativity.

The fastest growing telecommunications market in the world is Africa? In the mid-90s, there were 600,000 mobile phones in Sub-Saharan Africa. Today there are 750 million users today. What created this growth? There were no aid dollars or conferences. It was human ingenuity, innovation and creativity. These were the real game changers. Yet there is NOT even a single telecommunications equipment manufacturer on the continent.

A human construct is anything that did not exist before human creative thinking and EFFORT of building and construction. Caucasians who came to Africa exercised the power of creative thinking and conversion of their ideas/thoughts using the available elements and aspects of nature.

They CONVERTED that into commercial value and tapped into their own human networks for leverage.

Apartheid and the colonial government systems all over were a human construct to protect their racially-based interests.

Now that the political systems are inclusive, diverse and pluralistic, how come we are not harnessing human ingenuity, creativity and innovation for an improved economic situation? Because we are poor in the MIND as we haven't discovered the cognitive power within us waiting actualization.

What is an economy?

From this thinking, an economy are the activities of the CONVERSION rate of ideas/thoughts into material products using aspects of nature into solving problems and meeting needs.

The word "economy" comes from Greek "okionomia" (Strong's Greek Concordance #3622) which means "management of house affairs" or "stewardship" for the livelihood and well-being of its members.

The word is from Xenophon and Plato to mean, "the management of a household or of household affairs; specifically, the management, oversight, administration, of others' property; the office of a manager or overseer, stewardship."

The word is derived from "oikonomos" (Strong's Greek Concordance #3623), for "the manager of a household or of household affairs; especially a steward, manager, superintendent."

A country is an aggregate of households, an economy is the management of its affairs for the livelihood and the well-being of the citizens' households.

A country is thus an aggregate and collectivity of individuals, households and institutions whose economic decisions and behaviour have a bearing on the well-being of a nation’s economic productivity.

The least developed countries have remained oblivious to the industrialization approach, yet South Korea, Japan and China have sent their best brains to study, adopt and adapt the Western model – innovation, private property and organizational efficiency.

Ironically, the least developed countries simply adopted and adapted the Western model of conspicuous consumption "in the context of addictive or narcissistic behaviors induced by consumerism, the desire for immediate gratification, and hedonic expectations" while not backed by solid and sustainable economic fundamentals of financial prudence, savings, technological innovation and commercial creativity.

Majority of educated Africans are highly Westernized in terms of consumptive style and gadgetry tastes but very unscientific, technically unscrupulous and casual about time in terms of essence and reluctant “architects”.

The top 100 brands of the world are from the developed countries of the world. It was naturally created that way. Expression through human conduct made it so possible. The 1996 book “The Millionaire Next Door: The Surprising Secrets of America's Wealthy” (1996) by Thomas J. Stanley and William D. Danko looked at the wealthiest Americans and found that most millionaires are quite frugal and lead modest lifestyles.

According to Arthur Herman, historian and author of “How the Scots Invented the Modern World: The True Story of How Western Europe’s Poorest Nation Created Our World and Everything In It,” private enterprise is a process of the unleashing of rational and informed self interest through economic processes in meaningful commercial activities which breed in human beings an independence of mind and ability to make and to judge the world, judge what’s right and what’s wrong, to make decisions for themselves. He said the Scottish Enlightenment as it impacted the USA was an understanding of the principles of property. Property is the resource and a resource is the basis of having an affordable society. Business is the wealth creator of our society.

According to Adam Smith and David Hume, both of them Scots, commercial private enterprise is, in fact, the driving engine of change and human progress. The free market is more than just a place where goods are exchanged. It is really the clearinghouse of civilization because civilization is not only about the exchange of commercial products between the customer and businessperson, between consumer and producers but also the exchange of ideas among scientists, among intellectuals within the larger culture as a whole. That’s the focus that the Scottish Enlightenment gave the role of commercial interest as the driving creative productive force in society.

"Economic growth is the fuel that makes new jobs, creates new industries, and helps your hard work pay off...Growth expands the tax coffers nationally and locally, enabling investments for the future...Growth is not complicated. It is a force of nature. But when it stalls, as it has for the last four years, it will not return without effective leadership. A great leader understands and applies the power of incentives to encourage growth. Incentives appeal to a basic human instinct and motivate productive choices. They are used throughout our lives from grades in school that encourage learning and higher performance, to the incentives we use at work through pay, bonuses and promotions to recognize and encourage accomplishment. Incentives are the most powerful tool a government and its leaders have to spur economic growth.

"Every voter needs to ask which candidate will offer the most incentives to get our economy growing again. For example, which candidate will look at tax policy as an incentive to spur growth? Capital gains are taxed at a lower rate in our tax system today to recognize and encourage people to put their money to work. That money in turn gets invested in businesses which hire and expand. That tax incentive encourages risk taking and investment for growth. Which candidate understands the power of tax incentives?

"Which candidate understands how to effectively apply an incentive to encourage businesses to invest in job training? It is a tragedy today that there are jobs available but not enough people trained to fill them. Which candidate would streamline the muddle of ineffective programs today and encourage corporations to sponsor training programs through a simple, universal incentive? A properly-sized tax credit for job trainees hired over the next five years would do the trick.

“Which candidate will review every line of the tax code and regulation to assess its relevance and its complexity? If there is a simpler, clearer way to meet the goals, the regulation should be rewritten. If the regulation is outdated, it should be scrapped. Job creators, particularly small businesses, are looking for clarity and certainty: certainty from the tax code, certainty on the regulatory environment. Business leaders cannot create jobs when they cannot accurately assess the impact of taxes and regulations on their business…

"Incentives should not be confused with disincentives, their ugly step-sisters, which are based on penalties and don’t motivate progress. They stifle investment and innovation. Today, disincentives abound and are on the rise. Increased taxes, in whatever form, are a disincentive to earn, to spend, to save and invest…

“Today, our fundamental problem is a lack of economic growth and no attention to the incentives that can re-ignite it. The test for deciding who should be our next President is who understands that and will put the pieces in place to solve it. Our economy, job prospects, investments and retirement plans will get substantial help by picking the growth candidate. Which candidate has the record to arrive at the big decisions and incentivize growth?" - Charles R. Schwab, "Fundamental Economic Requirements For Our Next President" Forbes, 14 October 2012.

Public officials do not have a monopolistic knowledge in managing economic affairs. It is a collective of business (producers and industrialists, traders and service providers); regulators (public officers); and labourers.

Please now read this, www.investopedia.com/articles/investing/022415/worlds-top-10-economies.asp

Sources

[1] Public Office Charter of Zimbabwe www.facebook.com/notes/shingai-rukw...

[2] Constitution of Zimbabwe (2013) www.constituteproject.org/constitut...

[3] Economic growth www.investopedia.com/terms/e/econom... …

[4] Understanding Supply-Side Economics www.investopedia.com/articles/05/01... …