When States Run Capitalism, There Are Some Good Lessons For Africa

Point: China is a state capitalism, enterprising and not really entrepreneurial. Here, the state is the entrepreneur. The state plans and controls the economy.

 

Lessons to Africa: World Bank and many agencies have piloted the notion that state lead capitalism is bad. Africa has passed through era of privatizations where government firms were sold to private firms. But we need to notice a small difference in China. Though the firms are financed by the state, yet it has a small element of private-driven. Government provides the money through its banks and give out to individuals to create firms. I call it a pseudo-private-led system.  This contrasts with the type in US and West where archaic and dying firms are kept alive by governments through subsidies because the former is afraid of their collapse.

 

Point: “The US was once among the leading nations in the ratio of science and engineering grads to its college-age population. Now it ranks near the bottom of the 23 nations that collect such data. We hope that Edison’s story might … inspire more young Americans to study science and engineering” Time Magazine, July 5, 2010

 

Lesson to Africa: Taking kids to school is very important. But motivating them to choose a certain career path is priceless. The old Britain was a nation of science, but when it turned to law and philosophy, it collapsed.  No major company has been founded in UK  in the last 30 years. US is following the path; pay lawyers millions, sack engineers to keep the lawyers.  Throw the engineers on the street and move their jobs to overseas. Then tell them to ask their kids to study engineering and science. Nonsense, I have seen displayed engineers due to outsourcing swore that none of their generations will be one. And the pays for these technical guys are not that great, yet they cannot even keep the jobs. To make kids think Edison way, engineering has to be respected as in Germany. You cannot make engineering a chess card in America and expect people to line up for engineering school. There is much more job security for burger fryers in McDonalds than engineers in IBM; the latter can outsource overnight.

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