Does having a big city equal prosperity?

I read today a letter from Mr Joe Igbokwe published in the “letters” section of a Nigerian newspaper, This Day Online, on October 20th. He claims Nigerian ‘mosquitoes’ made a massive mistake to chase away whites from the country in 1960. He reckons because of the white leadership in SA, the country is the leader of Africa. He is astonished at the level of industrial and urban development in Joburg and Pretoria, and cannot distinguish between America, Europe, Singapore and SA cities. He believes black South Africans suffered miniscule death compared to the amounts of murders Nigerian leaders committed to stay in power there, and that the deaths were worth the economic infrastructure that’s been left behind to black South Africans. His conclusion is that if the whites had stayed in Nigeria for longer, Nigeria would’ve been like SA today. The piece is available below and on this link. 

Joe Igbokwe Letter to the Editor

Mr Igbokwe is quite right – the white man has historically shown an affinity to set up commercial enterprise and to improve his material state of well-being. If it’s high-rise buildings and a New York-style city that Nigeria wants, the white man is probably the right one to build it. But in order for him to build it, he requires economic freedoms. In the absence of property rights and the division of labour, these cities would never have come to the state as they are seen today. Without private ownership of property and the factors of production – land, labour and capital – these cities wouldn’t have been built. When cities have been built through forced labour and taxation – think ancient Egypt and the Roman Empire with the “crisis of the 3rd century” – in the absence of private ownership and the presence of the state with its monopoly of coercion and compulsion, these civilisations have all gone to the ‘dogs.’ It has nothing to do with race. It is a function of the intentions and the desires of the community itself, when left to their own devises.

My commentary on the piece is this: it has nothing to do with inferiority or superiority on anyone’s part. Mr Igbokwe obviously desires to live in a westernised city, and he is projecting his desires onto the world. Because this is what he believes equates to economic advancement, Nigeria has gone ‘backward’ relative to SA. This is his economic worldview.

All civilisations deal with their reality through a different structure of mind. In other words, every race has its peculiar mentality. We cannot apply yardsticks or benchmarks of achievement of a certain race to measure the achievements of other races. These are subjective value judgments, and as a result, are arbitrary. Every civilisation deals with its reality in the way it sees fit.

If a certain community, say a group of goat-herders, has total economic freedom to do whatever it pleases, and the majority of them most urgently want to raise enough goats to provide themselves with the quality of life necessary to spend every sunny afternoon from 2pm to 5pm playing a game of marco polo in the local river and catch a tan, and at the same time to live in clay huts, all of equal size – who are we to judge how this community spends their time and resources? To be sure, another community may decide that the most satisfactory arrangement of economic activity is to organise productive resource to build cities, homes, cars, and other luxury goods. But how can we say this arrangement is better than another in terms of improving the said community’s state of satisfaction?

This is exactly where governments today get it wrong: they are all Joe Igbokwe’s who reckon the best way to grow wealthy is to build big, westernised cities with industrial bases. They project their own desires onto their subjects. They don’t know what their citizens really desire, and they don’t care. Do they want more high-rise buildings or better sanitary services? Perhaps they desire to work less, live in crusty apartments, but they want play rugby in the afternoons. The only problem is, playing a game of social rugby cannot finance a government through taxes, so we get fed with propaganda and told that the only way for citizens to arrange economic activity is aimed at growing GDP, our new measure of wealth, and through the state’s monopoly of coercion and compulsion, citizens are forced to enter activities the state deems most acceptable and profitable to itself. We don’t decide for ourselves what we require anymore, the state does. Work, work, work, and spend, spend, spend. GDP, GDP, GDP. But at the end of the day, our economic freedoms are completely eroded, and we are the worse off for it. Once the community subjected to this tyranny realises what’s going on, no matter how big and beautiful their city used to be, we get a revolution.

The problem is that cause and effect have been totally confused in Mr Igbokwe’s analysis. He is not alone on this. The only way to embark on a path of prosperity for all of society is to have total economic freedom and to leave the market to its own devises.

UPDATE: Milton Friedman explains this concept pretty admirably. It’s two and a half minutes long and is worth the view.