History Tour and the Price of Petrol in Nigeria

In Vanguard, (Lagos, Nigeria) Morenike Taire writes a strange piece around a theme of Adam Smith to which “Lost Legacy” might be sympathetic, but which goes off the rails at times and ends up without being clear what it was about (this may, of course, be due to references to local Nigerian events of which I am not aware).

Morenike writes:

“It all started, supposedly, with Adam Smith, and his theory that screwed up the study of economics forever. That, sentimentally arguing, might not have been the intention of the so-called father of modern economics who, by his 1776 book, The Wealth of Nations, changed the way the world functions forever.

Smith approached the issue from a totally different angle from what his capitalist descendants today approach it. He might be said to have been patriotic, seeking to reach nationalistic interests by individualistic means. His descendants, on the other hand, go about it the other way, mainly in using national means towards individualistic ends, and pretending to be sticking strictly to the ideals of their founding father.

Smith’s argument had been that the wealth of nations could be increased by allowing the individual to seek his own self interest and by removing government control over the economy.

He further proposed a deliberate minimization of the role of governments and the maximization of the role of the free market. Smith might have hoped, by his widely controversial and acclaimed theory, that the capitalism he endorsed would promote political freedom and by extension, economic freedom. This might explain why while today’s capitalists use Adam Smith’s theory as their defense, today’s socialists also borrow from him.”

See what I mean about it suggesting a broadly correct stance on the treatment of Adam Smith’s legacy? (Interesting comment following my item below on Roy Hattersely's resort to quoting Adam Smith when espousing leftwing socialism.) It continues:

“The result is the confusion of the layman, who makes up the vast majority of the world’s population today. When Smith wrote his book, the world was in a warped stage of its development.

International politics and economics where Africa was concerned for instance, centered around whether the economic justification for building the wealth of the new world by the trade in African slaves and the cheap labour it provided, ought to or ought not to supercede the moral outcry against the trade from both within the new world and outside of it.”

Smith, of course, was never sympathetic to slavery, which we should remember was not a monopoly of the New World, but had a considerable history and presence in the Old World too, especially in the Arab countries on North Africa and the Middle East (and also in Russia, parts of what we now call Germany, the Balkans and further East).

The Morenike runs two events together, separated by more than a hundred years if indeed it was ever a conscious decision:

“Eventually, the scale tipped in the European favour, and in favour of the unwritten theory that a great deal of transport costs and the nuisance of moral sentiments can be spared if, instead of shipping out the slaves, they were simply made to do the work at home and to feel good about it to boot.

Diplomacy then became the art of being able to tell someone to go to hell and they actually look forward to the trip. Democracy, then, was only for a few, and not the new religion it has now become whereby nations of the world are encouraged either to accept, or die!”

Make of that what you will. I find it difficult to disentangle it to understand what the author is saying.

“Self interest, then, did not foresee a global village, and nations had referred to the ancient concept. The world, including Adam Smith, could be excused if they had not imagined then, that the wealth of the world would one day lag on a global village as long as the wealth of Africa lags.

Can it be excused though, if Democracies in Africa do not recognize this? Can African leaders be forgiven for adhering to the evolved version of Adam Smith’s theory, which only pretends to put the nation first?”

Near the end we find:

“It is in Nigeria that Smith’s theory is corrupted to the most ridiculous level; where services are said to be totally deregulated, yet government fixes the price by fiat. The NNPC boss was even on TV to threaten those who dare to overshoot the sixty five naira mark.”

If this is an ironic stab at the doctrine of free markets up against the practice of State price regulation, it makes sense; if it is something else, it doesn’t. This seems a long way to go round – Smith’s “Wealth of Nations”, a summary of his views, the slave trade, the end of colonialism and the rise of African national states – to get to the price of petrol and the issue of price capping petrol.