A market economy refers to a system in which economic decisions especially the pricing of goods and services are fully determined by the aggregate interactions of a country’s citizens and businesses, with little or intangible intervention from government. More innovations and technological advancements in rich nations have been successfully recorded as a result of the opportunities and provisions made available by a free market system, far much more than government policies can ever boast of.
I take America as a study case, just about a century ago, only about 4% of Americans have indoor plumbing in their homes, only 2% of homes in the United States were graced with electricity. Owning a personal computer and cell phone was totally out of the equation. There was 0% access to the internet. 1% automobiles and many wore casual clothes. The only few things that were available on the high side were maternal and newborn mortality, routine death from diseases due to lack of medicine. Without spilling any figures, you’d easily that story has long changed. America today is a world giant and this is loudly evident in the quality of lives of its people.
It is important to clearly state that government policies weren’t essentially responsible for the phenomenal improvements in America between 1900 and now. Rather market happened to the American economy. The drive to earn better and provide better life for oneself remains the brightest means to spur individuals into getting education, invest in their own development, take calculated risk, start companies, produce smart technological products others are willing to buy.
At the very primary level, the availability of electricity has encouraged gadgets that can only function with the availability of power. With the refrigerator for instance which was the brain child of an inventor who harnessed freedom. Today ordinary households can now afford not to go to market every single day since food and food materials can be stored in the refrigerator. That essentially helps to save time. And the time saved can be invested in many other productive activities. To drive home this point better, think about how many university degrees that is being lost to the time the average person uses in hand-washing clothes? Imagine the amount of time that can be diverted into self development, into staying connected to loved ones and doing a whole lot of productive activities that create a wider chain for development and economic progress.
I have lived in Lagos, Nigeria for the better part of my life. And I have always had the impression that Lagos is highly over populated. At the moment, Lagos, the fastest growing city in Africa and the seventh in the world is estimated to inhabit about 20 million people. The city is no doubt congested and suffers from constant vehicular traffic. Prior to 2001, cell phones used to be an item not just for the rich, but extremely rich. And in those days, you will have to travel miles to deliver minor messages. That was a point where every business meeting took place with physical contact only. Imagine today’s Lagos with about 20 million occupants without cell phones and internet. Just imagine the traffic on the roads!
To further buttress the fact that a free market economy creates freedom and prosperity in a deliberate and explosive manner, I will like to again touch on America’s economy and how it has recorded phenomenal success, just like I did at the beginning of this conversation. A great author and proponent of free market, Joseph Schumpeter, made a brave forecast in his book Capitalism, Socialism and Democracy which was published in 1942. In that book, Joseph Schumpeter said poverty would have died a natural death in America and a couple of other capitalist countries like France, Sweden and Germany in exactly five decades to come – 1992. He pointed that poverty has it concerns inability to feed, get a decent shelter and clothing – the three essential survival needs, just as Maslow Identified in hierarchy of needs. Like Professor George Vicksnins rightly said in one of his presentations, by 1982, poverty in this sense has been eliminated in the United States.
So from the above analysis, it’s clear that capitalism and its principles are Sine qua non to the prosperity and well-being of any nation. Whether African nations still wallowing in abject poverty will look into adopting the basic market economy is something I can only encourage and then wish for, but to doubt that the system can replicate the successes it has in other nations of the world is to waste valuable time that can be spent on producing goods and ideas that will solve more problem and create more wealth and prosperity for many.
Lanre Olagunju is an hydrologist turned freelance journalist. He has a degree in hydrology from the University of Agriculture Abeokuta and a professional diploma in journalism from the American College of Journalism. Lanre advocates on several international platforms for the prosperity and absolute well-being of the African continent. He's @Lanre_Olagunju on Twitter
