The Free Market Private Sector NOT Engine of Economic Growth

By all indications, the private sector is anything but the engine of economic growth. It is rather the engine of economic chaos in every sense of the word.

It is in the lives of ordinary people that we see its degenerative power. Overnight, in London, the private sector dismissed thousands of ordinary workers who had reported for work in the financial sector. In Ghana, it has wrecked its havoc since 1983 under then PNDC and continued under NDC and now NPP.

The decimation of families will follow with mortgage defaults and homes repossessions and divorces.

The free market private sector is not engine of economic growth for this practical reason alone.

The theoretical reason is that the private sector only organises resources towards a profitable goal. It is not interested in any wider social objective not subject to profit. Hence, it can sacrifice virtues such as equality, justice, freedom and uprightness. However, these are the values necessary for establishing a just and free society.

So what is the real engine of economic growth?

It is ordinary people with their hopes, aspirations, fears and other qualities such as initiative, creativity and entrepreneurship. In the case of Ghana, it is the ordinary poor Ghanaian Majority. Unless they are empowered, Ghana cannot grow wealthy.

Generally, there are four sectors in every society, namely, the private sector, the public sector, the international sector and the civil sector. All four sectors must be working properly for Ghana to grow. It must be clear to all that the private sector cannot have monopoly over human qualities.

The propagandistic practice so far of singling out only the private sector as the engine of economic growth is not correct in both theory and practice.

The way forward is more like a co-ordinated engine of economic growth. Someone must do the co-ordination. Whoever it is, it cannot be the private sector.

Even if the pubic sector is bad and corrupt, at least we can hold them to account at the ballot box and force change that way. The private sector is not subject to account through electoral change. The market may be seen as the final arbiter for the performance of the private sector. However, that does not make it the engine of economic growth. Markets are not democratic institutions. They must be subject to the democratic will of the Ghanaian people for instance. Most markets are either monopolies or oligopolies. Free competitive markets do not exist anywhere in the world.

Following the arguments of books like Ayn Rand’s “Atlas Shrugged” only destroys ones capacity to think sanely.

It creates a psychotic state in which conservative-liberal elites begin to believe that Government intervening in every nook and cranny of our existence is bad and weakens individuals.

In addition, it conceives only of individuals as entrepreneurs who have the capacity to save us all. These are the kind of books that people as Alan Greenspan et al read in order to fashion the current financial system now imploding.

It is sheer madness. That is what freemarket does to one’s mental sanity and behaviour.

Kwami Agbodza