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Truth, freedom and growth

By Wellington Chadehumbe



FOLLOWING is the keynote address delivered by Wellington Chadehumbe at the Zimbabwe Independent/FBC Banks and Banking Survey reception

held last week.



AN anonymous commentator once said: “Economists have an irrational passion for dispassionate rationality.” So in keeping with my trade, allow me to entertain you with a few thoughts on the causal linkages I believe to exist between truth, freedom and economic growth.


As some of you know, I left this beloved country in 1996. I moved to South Africa to broaden my horizons business-wise. I felt the need to operate on a pan-African stage, rather than within a single country. I am still to achieve that vision in full.


The most instructive experience so far and indeed the biggest fun has been meeting and getting to know fellow Africans from other countries. Mostly, I have been astounded by the similarities between our perspectives.


A key similarity I have noticed among us is our fixation on freedom. Of course, we must regard sovereignty as sacrosanct given our historical background. But the benefits of that sovereignty must percolate through society and trickle down to the individual. So I would like to challenge you to consider with me what sovereignty must mean for this generation and for our children, and jointly try and unravel the causal link between that sovereignty and our economic wellbeing.


I will start by stating the obvious.


Now that we have obtained political freedom, our challenge and responsibility is the judicious management of our affairs. We must understand that we cannot use the same tools as we used during yesteryears, struggling for freedom.


Instead of activism, we now need cool calculation and strategy — measured words of wisdom instead of fiery rhetoric. Otherwise, we will continue to sound and act as if we are still the hapless victims we used to be before freedom. Such behaviour could not be more contradictory and discordant with the concept of self-determination that we treasure.


The management of our affairs responsibly must include having the courage to confront our past and present failures with bold introspection, not in the indignity of shame, but with a resolute determination to learn from our errors and solve them with cogent analysis and resolute action.


I am convinced that we do have the fortitude to shoulder these responsibilities and the courage to confront truth, no matter how discomfiting. I believe that we have the wisdom and insight to know that our freedom must be under-girded by truth, if it is to be sustainable. My confidence stems from the knowledge that there is nothing intrinsically wrong with us as Africans. If other peoples have addressed similar issues time and again, similar capacity is surely within our ken.


Our sovereignty must also translate to individual freedom, and the extension of the right to participate and engage to all. This would be a worthwhile demonstration of the fact that we positively believe in, value and honour each other’s intellectual capabilities. This is also necessary for the fulfillment of all. All humans desire the opportunity for self-expression.


However, freedom and truth are not only valuable for their own sake, but are also critical for economic progress. This is the thesis of Amatya Sen’s book, Development as Freedom. To Sen, development has no value if it does not expand freedoms. He calls this concept the constitutive value of freedom.


Sen’s views, of course fly in the face of conventional thinking on freedom and growth in some parts of Asia, where Lee Kuan Yew’s legacy of capitalist dictatorship (in Singapore) treats freedom as an unnecessary nuisance that should not distract the noble pursuit of economic development.


Sen does not conceal his distaste of Lee Kuan Yew’s approach. He writes: “Some have championed harsher political systems — with the denial of basic civil and political rights — for their alleged advantage in promoting economic development. This thesis (often called “the Lee thesis”) is sometimes backed by some fairly rudimentary empirical evidence. In fact, more comprehensive inter-country comparisons have not provided any confirmation of this thesis . . . Indeed, the empirical evidence very strongly suggests that economic growth is more a matter of a friendlier economic climate than of a harsher political system.”


Like Sen, I am most sceptical about the sustainability of the so-called economic miracles taking place in some oppressive Asian countries. In fact, my own experience as a businessman has revealed to me the flaws of the Lee thesis. I have learnt that quality people can only be led, not managed and that leadership is at its quintessence when the key tools it employs are inspiration and vision as opposed to threats and intimidation. It appears as if fulfillment eludes us as humans when the God-given right to free choice is tampered with by the dictatorial tendencies of fellow mortals.


The value of freedom and truth as instruments of economic growth has also been stressed by Bernstein in his book, The Birth of Plenty, in which he argues that there are four key drivers of long-term economic growth, namely scientific rationalism, property rights, capital markets and efficient transport and communication systems.


Bernstein stresses the importance of scientific rationalism this way, “At base . . . the history of economics is the history of technology — after all modern prosperity rides in the cockpit of invention.”


It is common cause that scientific rationalism is nothing other than human beings’ pursuit of truth. Therefore, Bernstein’s quotation is synonymous with asserting that truth (or at least the quest for it), is a driver of growth.


Kitty Fergusson, the author of the book, The Fire in the Equations, takes the inviolability of truth to a higher level. She observes that by presuming that the universe is objective (as scientific enquiry does), that must mean that: “Reality has a hard edge to it and it does not cave in or shift like sands in the desert in response to our opinions, perceptions, preferences, beliefs, or anything else. Reality is not a democracy.”


Therefore truth is absolute and when we find it, one of its benefits is growth.


Let me now turn my attention to the causal link between freedom and growth. In the modern age, freedom is best measured by the civil liberties that a citizenry enjoys.


Bernstein argues that the preservation of property rights drives economic activity this way: “Innovators and tradesmen must rest secure that the fruits of their labours will not be arbitrarily confiscated by the state, by criminals or by monopolists.”


These freedoms must include the freedom to transact and exchange. In Democracy as Freedom, Amatya Sen considers the freedom of exchange so basic and normal that to him any attempt to restrict free exchange is as ridiculous as an attempt to stop people from conversing.


The economist, William Baumol, also adds credence to Sen’s argument when he writes on entrepreneurship. He advises that when entrepreneurs engage in unproductive activities “such as rent-seeking or organised crime” any attempts to resolve the problem should begin with an analysis of how the incentive structure created by the regulators might have enlarged “the payoffs society offers to such (unproductive) activities”.


I have tried to show the interdependence between truth and freedom. I have also provided arguments suggesting a causal link between these two virtues and growth. I think we all agree that growth is an imperative for Africa.


It stands to reason that we can only demonstrate our love for growth when we passionately embrace these virtues. We cannot violate these virtues and still claim to be committed to progress. Embracing these virtues is the price we must pay for progress.


As my dad used to say, I think for the love of alliteration: “Poor people prove their preparedness to proceed from poverty to prosperity when they are prepared to pay the price for that prosperity.”


Are we prepared to pay the price for prosperity through our passionate embrace of the virtues of truth and freedom?


I have also argued that of the two virtues, truth is the more fundamental because it is the begetter and benefactor of freedom — the only citadel within which freedom can finally be free to be its true self.


From this realisation, I have finally understood what the Lord Jesus means in John 8:32 when He says: “And you shall know the truth and the truth will make you free.” I therefore personally find it difficult to say “long live freedom”, in good conscience, without in the same breadth shouting, “long live truth”.


Wellington Chadehumbe is an economist and the CEO of Triumph Venture Capital (Pty) Ltd, a fund management company that manages the Southern African Intellectual Property Fund. The views expressed in this article are solely those of the author. FBC Holdings was the official sponsor of the Banks and Banking Survey.

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