By Segun Ayobolu
Not many us would reason that there is any difference between money and wealth. After all, the popular perception is that to be wealthy is to have lots of money. But the authors of this book, ‘Financialism: Water from an empty well’, Asiwaju Bola Ahmed Tinubu and Brian Browne, insist that this is pure myth. Money may be the measure of wealth; it cannot be its definition. It is this conflation of money with wealth, they contend, that is responsible for the current unhealthy and even destructive transition from traditional capitalism to the reigning economic regime that they creatively christen ‘financialism’. Capitalism is a system of private ownership of the means of production and investment in creation of goods and services by the private entrepreneur for the purpose of reaping profit. Financialism on the other hand is the system of investing and speculating in money for the purpose of multiplying money for its own sake to reap mega profits. This is clearly an unorthodox book. It is suffused through and through with ‘out of the box’ thinking. Many of the views, perceptions, observations, illustrations, pontifications and prescriptions offered by the authors starkly contradict orthodox economic thinking.
But then, the authors, the former Governor of Lagos State and the former United States Consul-General in Nigeria, confess from the outset that they are neither professional economists nor academics. Is this not a draw back for the subject they have chosen to tackle? From what well of expertise, the reader may wonder, do they then draw the intellectual offerings they proffer as solutions to current economic challenges? Such a perspective, however, obviously exaggerates the scientific status and certitude of orthodox neo-liberal economics. How do we explain, for instance, the failure of orthodox economic experts to forsee the current global financial crisis, proffer policies to prevent the catastrophe and that they appear even more helpless in helping to chart a sustainable course towards a healthier, more equitable global economy? Tinubu and Browne can, therefore, rightly claim that, not imprisoned by textbook theories or mythical ideologies, their diverse life and professional experiences enable them to examine current global economic problems from fresh, more realistic perspectives.
We can thus understand their contention that money is not synonymous with wealth. Money, they explain, only underpins the creation of wealth when it facilitates the production of goods and services through which employment is generated and value added to society. Speculation and investment in the limitless multiplication of money for its own sake is, for the authors, the equivalent of constructing a sky scrapper on a foundation of nothing. It is this abnormality that defines the transition from capitalism to financialism, a development that is at the root of the current ruinous financial and economic disorder enveloping most parts of our contemporary world. In his thrilling forward to the book, Nobel Laureate, Professor Wole Soyinka, points out its central thrust with characteristic pungency: “It challenges the domination of print value over the material goods, a situation where the “virtual” or symbolic arbiter between commodities comes to take precedence and becomes not only valued and marketable for itself, but also tyrannizes over the enabling material base. The skewed world of economics needs to be challenged, a world where the umblical cord between produce and tally card was slashed when no one was looking”. Eminent African-American statesman, Reverend Jesse Jackson, makes the same observation when he notes in the second foreword that “The book reveals a profound fact: the dominant economic theory is more subjective than it is scientific”.
The authors realize that the economy is not an enclave insulated from the influences of society and politics. Theirs is thus an endeavour in political economy. They state right from the outset that their aim is to contribute towards a better global future through the evolution of “a political economy based on an equitable creation of wealth”. Rather than being a variant of capitalism, Tinubu and Browne claim that financialism is actually an assault against the former. But then, is capitalism itself not essentially defined and motivated by human greed as epitomized by the profit motive? After all, did Adam Smith, the father of classical economics, not famously insinuate that we do not get our dinner due to the benevolence of the baker or the butcher but their pursuit of pecuniary self-interest? If selfishness, greed and the profit motive are the underlying driving motives of capitalism itself, is financialism then not only an inevitable culmination of the accumulative logic of the capitalist ethic? Is that, perhaps why Karl Marx declared sarcastically of capitalism: “Accumulate! Accumulate! That is the law and the prophets”?
If the logic of capitalism is the maximisation of profit at all costs and the financial sector offers the best sphere for the realization of this objective, will investment including reckless speculative activity not necessarily gravitate in that direction? It is probably because of their recognition of greed as a constant factor in capitalist economic organization that the authors constantly stress throughout the book the central role of government in maintaining a sound financial system, ensuring that the financial sector sustains a viable real sector, limiting the intensity and ferocity of competition as well as acting as a pivotal economic player that promotes policies capable of fostering economic development. Not for the authors then all that neo-liberal stuff of severely limiting the economic role of the state or maximum deregulation of the economy. As they put it, “All major financial calamities are described by the lack of responsible government supervision to mitigate private avarice, easy credit, and undue optimism, leading to excessive risk-taking and spiralling asset prices”.
As the authors demonstrate in the book, cyclical crises spurred by speculative greed are intrinsic to the capitalist model of economic management. What are their diagnoses of the root causes of this problem? What prescriptions do they have for overcoming the limitations of capitalism or what they describe as its financialist variant and ensuring that it functions in a more ethical, life-enhancing way? Are the authors involved in a well- meaning but ultimately futile effort to salvage a capitalist system that has gone utterly berserk and, from all indications, offers humanity nothing but a bleak future? Is capitalism sustainable as a model of economic organization or must we continue Karl Marx’s quest for an economic system that transcends capitalist greed and create a more just, equitable, caring and human society activated by the need of the majority rather than the greed of a few?