No known socialist model bred economic prosperity

Friday January 25 2019

Deep in the chest of most Kenyans beats a heart that abhors corruption and unjust gain, and yearns for high quality public services.

These Kenyans are not enamoured either to the United States of America, a country whose economy is impressively built, but lives with enormous faults based on its legacy of slavery or to the United Kingdom based on the sad history of its imperial past. Soon enough, more information enclosed in the National Archives will come out and perhaps confirm that some of the colonial era policies were worse and had more devastating effects than Kenyans have thought.


In the quest to reconcile the moral contradictions that the leading world economies have, some Kenyans have the idea that Kenya should be fashioned as a socialist paradise to avoid the ''inherent violence of capitalism''. This posture is pervasive in the commentary and attribute many policy failures in Kenya to the very strong hand of capitalist interest in the country.

Epithets are often uttered against global institutions such as the World Trade Organization, The World Bank and the International Monetary Fund even by persons who should, but often do not, distinguish their roles from each other.

Whatever may be the historical or political affinity for socialist rhetoric in Kenya, those who have discussed with me agree that the 75-year socialist experiment undertaken by the Soviet Union republics was unsuccessful as a political and economic model. As a result, there is a search for modern socialist experiments at the national level. Again, the example of Venezuela demonstrates that the early years of Hugo Chavez flattered the ideologues but has unravelled under President Nicolas Maduro.


Today, many citizens of Venezuela do not accept the claim by their president that greedy capitalists have conspired with the US government to undermine the socialist paradise that they have been building for 18 years.


Confronted by the fact that the results of socialist experiments have been not only suboptimal but have been devastating for lives, the search has shifted to northern European countries of Scandinavia. Sweden, Finland, Denmark, Iceland and Norway have cultural similarities and successful economic and social policy. As countries that have attained high standards of living with significant redistribution, they are being cited as examples that redeem socialism.

One need not have visited and lived in any of the five countries to tell that the characterisation of Scandinavia as a socialist paradise is a fallacy. These countries have impressive welfare systems supported by public funds and a very transparent processes free of corruption. While socialists would like to see similar welfare outcomes, the countries that have attained them did not reach this through recognisable principles of socialism.

To start with, Sweden, Denmark, Finnish and Norwegian citizens do not live in countries where people queue to find basic commodities. A major reason for this reliability of supply is that these countries have firms that are globally competitive and government regulation is solid but no corporations receive subsidies to crate employment that nobody needs. Bearing in mind that these five countries have a total population of less than 30 million but are the original homes of global brands as Volvo, Ericsson, Tetrapak and Lego. They were not created by direct government action and have had to resize as the external market conditions have demanded.


The presence of successful private firms is essential where the cultural ethos is to create an expansive safety net for all citizens. The mere desire to protect every citizen from risks to life and limb is not sufficient to make it so. What matters is the ability to collect taxes from successful firms and individuals and to channel those correctly to the most popular public programmes. And the work does not end there because the public services have to be satisfactory to justify the higher rates of income taxation.

Meeting Swedish citizens who visited Kenya a week ago, I asked whether they would define their country as socialist. The answer was direct and unequivocal: Citizens of Scandinavia lived close enough to the Soviet Union to understand that they neither desire nor have a socialist system. And for good measure, one interlocutor asked me to check the global ranking of pro-market countries where all four countries except Finland consistently rank above the US. The parting words – ''We are clearly aware of the importance of social solidarity in our country, but whoever equates that to socialism is misinformed or mendacious.''

I keep hoping that in the discourse about policy choices consistent with aspirations, Kenyans recognise examples of successful economic and social policy, irrespective of ambivalence about their history.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi.

Twitter: @IEAKwame