There is one shining point of light on the bleak African continent:
So, have we found the philosopher’s stone, Hayek’s oh-so-spontaneous social harmony by virtue of impersonal market forces?
Well, Hayek isn’t ENTIRELY off the track. There is a vague family resemblance between
successful political and economic policies and Hayek’s recommendations, in that
both are embedded in 19th-century liberal democratic traditions like rule of
law, etc. Botswana
is nothing to be seen of the drastic privatization that is often recommended
invoking (not always accurately) Hayek’s ghost. Botswana
independent in 1965 it was very poor and had almost no educated citizens. 84% of
the land is sandy desert. Its only business was cattle. It was much poorer and
far worse educated than Botswana Uganda
But it is now richer than either of them. Zambia
Various different factors have been named as responsible for this exceptional stability and growth.
1. British colonialism did not destroy pre-existing tribal political structures. The British basically ignored their colony of
, since it had no apparent
mineral wealth and was not attractive for European settlers. It served principally
as a buffer state to prevent expansion of German colonialism and Boer
2. Traditionally the native Tswana people have had political institutions that enabled free discussion of public affairs by ordinary people, and even allowed criticism of tribal chiefs. These institutions were integrated into the republic that became independent in 1965. The chief of the most powerful tribe was elected president, but he did not particularly favour his own tribe. He later greatly reduced the power of the tribal chiefs and increased the power of government.
3. Law and order have prevailed. This legal security afforded large segments of the population security in their property rights, encouraging people to be productive and thrifty.
4. After independence mineral wealth was discovered in the form of diamonds, whose export provides a steady income. In other African nations mineral wealth has been a factor of discord, rivalry and corruption, but not here.
confirm Hayek’s thesis in The Road to Serfdom? In other words, was Botswana successful because the government
is small and does not meddle with the economy? Botswana
However it has in no way followed a free-market ideology.
Government has played a big role –- but not an overwhelming one -- in the country’s economic development. The government is the sole owner of all mineral wealth. On independence the government nationalized the only industry in the country –- a slaughterhouse, and has since built two new government slaughterhouses. The government heavily subsidises veterinary medicine, vaccines and agricultural extension services for cattle ranchers. The government’s revenue from diamonds is prudently invested in productive projects.
To put it in polemical terms,
is a triumph of central planning. Botswana
 All information about
was extracted from An African Success Story: Botswana, by Daron Acemoğlu,
Simon Johnson & James A. Robinson, MIT Department of Economics Working
Paper No. 01-37, July 2001 Download at: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=18621#view1373341
Of course, Botswana has not known central planning in the striuct sense of the term, namely all production and consumption of all goods and services are planned by a central board 5 years in advance, down to the last tiddlywink. However free-market enthusiasts deliberately smear all government intervention in the economy as “central planning”.