Detroit in Bankruptcy: What and who killed Capitalism?

by Emmanuel Omoh Esiemokhai

Over two hundred years ago, Adam Smith, Ricardo, Owen and some French liberal thinkers created the philosophical and practical foundations of the capitalist system.

Adam Smith’s “The Wealth of the Nations,” pointed the way to materialist accumulation of wealth by imaginative and innovative people, who could lay their hands on capital and could hire labour.

The back-bones of this economic order are the banking system, manufacturing of goods, efficient services, marketing, exports to foreign lands, payment of taxes to the state, which, in turn, would ensure social services and good governance.

Elections are to be conducted, to freely choose well-educated and patriotic compatriots, to govern the state, in the interest of the people.
The poorly educated the alalus homo, people with little learning, cannot hold offices in trust for the people.

No matter how much they try, they are simply incapable of running the capitalist system.
Capitalism worked extremely well during and after the industrial revolution in Europe.

In the early years of capitalism, Spain, Portugal, Holland, France and Great Britain [as it was called then}, were in search of foreign markets to sell their manufactured goods and acquire raw materials.

This led to outright colonization of the nations in Latin America, Africa and Asia. Their national resources were plundered and where they resisted were brutally killed.

Between the 15th and 18th centuries, capitalism grew into industrial capitalism and then, monopoly capitalism, which led to the intensification of exploitation of mines, plantations and other natural resources in the colonies.

Gold and silver were brought to their mints in exchange of coined money. Proceeds of seigniorage were brought into bursting exchequer. This has now become diminished.

There was unprecedented wealth and also growth in capitalist nations of Europe, which now seem to suffer karmic consequences as can be seen from their societal plights.

In Greece, Portugal, Spain, France and England, their economies are wobbling. If Britain leaves Europe, there would be further misery.

Many strategies have been put in place, which seem unworkable. The banks have been indicted for overpaying their top staff, have given unreasonable loans and have engaged in speculative investment promotions, which have failed.
The classical evidence of the decline of capitalism is the financial state of Detroit. Governor Rick Snyder told it all, when he declared Detroit bankrupt on July, 18, 2013.

Chapter 9 bankruptcies are a devastating situation for bond holders, pensioners and others, who have fiduciary relations with the City of Detroit.
A once thriving city of flashy cars and the good life, all those have “gone with the wind.”

In 1991, I visited Detroit. I was shocked to see that the effects of the 1968 violent riots were still very visible. I saw dilapidated houses, cracks on city landmark buildings, the abandonment of supermarkets. The city wore a forlorn look.

In my discussions with some scholars who published regularly in the FOREIGN AFFAIRS journal, at the University of Chicago, I wondered why the US government had been paying 1.3 BILLION DOLLARS to the Mubarak regime annually, for over thirty years, while leaving Detroit to rot.
The bail-out granted to major car producing companies in Detroit was helpful. Perhaps, more could have been done earlier.

The policy of always looking across the ocean is in need of strategic review, because if more states in the Union, especially those that have suffered as a result of natural causes or neglect, go down like Detroit, the EU-US trade arrangement could be slightly affected.

US position in the WTO, could be weakened. The WTO is responsible for one-half of the world’s economic output.

Capitalism was killed by the banking system, cut-throat competitions from socialist China, from India, Brazil, Russia and other emergent economic powers, which have adopted the eclectic approach to industrial capitalism.
Monopolistic and oligopolistic tendencies have been weakened by new economic blocks like BRICS and other economic formations like the ASEAN etc.

It can also be pointed out that aggressive foreign policies that romantically seek to rescue ancient regimes from the abyss, result in a war economy, where enormous financial investment go into the military/industrial complex, that yield little or no dividends.

Under the double impact of domestic protestations and its dwindling capitalist economy, Britain has announced that can no longer arm the Syrian rebels and has taken export licence measures against the new regime in Egypt.
The UN Human Rights Authority has asked Egyptian coup plotters to announce the whereabouts of Morsi.

These are reasonable moves against rebellion.

In Nigeria, which is neither capitalist nor socialist, the decline in the nation’s fortunes have been accentuated by the adoption of the expensive presidential system, whose paraphernalia of government, leaves little for infrastructural development and social welfare. Corruption takes the rest.
This was my view, when I spoke at the BBC Forum in Abuja on July, 18, 2013. We are on the wrong road and according to Don Williams “there is no use running when you are on the wrong road.”

Some politicians do not care to consider this danger, as long as they benefit from the system as it is.

The inauguration of the APC as a new political party, which permitted hopes of a new dispensation, has not lived up to our optimism, as we see the old corrupt brigade jostling for positions in the new party.
We are also sad that the People’s Democratic Party has become fractious and disoriented.

The party has become like a sucked orange or a milked cow. Its members, who were governors, but can no longer serve as a result of constitutional constraints or prohibition, are now seeking accommodation in APC.
There is little you can do with a sucked orange or a milked cow. Some political turn-coats are discarding the PDP.

The PDP, which was the brain-child of Dr Alex Ekwueme, the late Chief Bola Ige and other intellectuals, has long been hi-jacked by half-wits, dull, unschooled but “rich” individuals, who do not and did not possess the political sagacity to run a political party.
So, the party is in crisis!

In capitalist states, only the best brains run governments and political organizations. That is why their states have prospered for centuries.
Remember the poorly educated cadre, who took charge from 1966 and the indelible print of mediocrity that has been our plight.

We must vote for people, with human intellect, not demonic creatures, with counterfeit pretensions to intellectualism.
In Nigeria, the military killed the development of the Nigerian state, which they still see as booty.

The Al Mustafa phenomenon is likely to reveal more about the Nigerian state than we hitherto knew. Allah prevents man-made gods from having their way.
Recently, we went to borrow from China. The amount was not much.

If the Minister of Finance was quoted correctly, salaries may be hard to come by, sooner than later and that will not be a pleasant story for our feral and marginalized under-class.

The non-availability of financial resources for the small business people, excludes them inexorably from participation in the capitalist enterprise.
Africa is the place to do business in the 21st century. Re-locate those machines, factories and industries to Fugar in Nigeria and there will be hope for a new capitalist growth in Nigeria.

God has demonstrated that He alone can save mankind and not systems of rulership by man-made gods.

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