 He was born in Ghana, Africa. He's written for numerous journals. I was impressed. He sent me a huge packet of articles that have appeared all over the world. And as a matter of fact, right after we had lined him up as a speaker, I opened the San Francisco Chronicle one day, and there was a half-page article dealing with Africa and the economies of Africa and some of the critiques and the hypocrisies of the Western world concerning it. Dr. Ayti is working on a book for the Cato Institute, which is tentatively called Africa Betrayed. I would like to introduce to you Dr. George Ayti. First of all, I'd like to thank Jim for a very wonderful introduction. And I'd also like to thank you for finding some time to come here and listen to me. I think any casual observer of Africa who realize that things have gone so wrong in Africa. Let me give you a few statistics. 1985, for example, 2 million Africans perished needlessly from farming. Currently, Africa imports about 40% of its food. It used to be able to feed itself in the 1950s. Now, currently, more than 10 million African peasants have fled their countries, their refugees. I'm not even counting those who are trapped in their own countries. You have civil wars. I call them senseless civil wars raging on in at least 15 African countries in Angola, Mozambique, Ethiopia, Sudan. Income per capita for many African countries today are much, much lower than what they were in the 1960s. Now, why did things go so wrong in Africa? Now, if you ask the leaders and the elites of Africa or the intellectuals of Africa, they'll tell you that, ah, it was the colonialists. It was American imperialism. It was the IMF. It was the international monetary system which was against Africa. For years and for decades, this is what we had. It got to a point where even the so-called backward and illiterate peasants got fed up with it. And this is what it said. True, external factors have played a role in Africa's crisis. But by far, the most important factors were internal. It's now come to a time where Africa has to look at itself and the leaders have to look at themselves and saying that the leaders have to look at themselves. That's not mean that you're holding brief for colonialism or for imperialism or for what. If you take, say, a cup and the cup is full of holes, obviously that cup, common sense tells you that that cup is not going to hold water for a long time. No matter how much water you put in it, it's all going to drain away. And to the extent that you have internal leaks in Africa, this is very important to the extent that you have internal leaks in Africa. No matter how much foreign aid you pour into the region, it's not going to be of any use. What do you do? Again, common sense suggests that as the first order of priority, you should plug those leaks. Now, if you plug those leaks, then the little foreign exchange or foreign aid that comes in can stay. Now, what are the internal leaks? One, incompetent leadership. Two, corruption. Three, misguided ideologies. Four, civil wars. Obviously, I cannot discuss all these internal factors. I like to pick one of them. And that one was the imposition of socialism and Africa. The socialism that we had in Africa was a very, very, very peculiar type of socialism. Now, this is how many African officials defined socialism. There was one minister in Kwame Krumas' cabinet in Ghana. One asked to define socialism. He said, socialism does not mean if you have made a lot of money, you cannot keep it. There was also another minister in Mugabe's government. He was asked to define socialism. Now, he said, in Zimbabwe, socialism means that what is mine is mine. But what is yours we share. Now, this is a peculiar kind of socialism that was imposed upon Africa, a peculiar type of socialism which allowed the head of state and a phalanx of kleptocrats to rape and plunder their state treasuries for deposit in Swiss bank accounts. Under Mobutuism, the president of Zaire, President Mobutu, has more than $8 billion in Swiss bank accounts. Now, his personal fortune alone can pay off the entire foreign debt of his country. And when Africans were starving in 1985, Mobutu, who himself boasted on 60 minutes, CVS, 60 minutes, did not lift a finger to help his own fellow African people. Why do so many African governments or leaders choose socialism? The reason why they chose socialism was because they felt colonialism and capitalism were the same. In fact, Lenin said capitalism was the extension of colonialism and imperialism. So when we gain our independence, African leaders didn't want to have anything to do with capitalism. It was exploitative. We wanted socialism because socialism was what we needed to fight the imperialists. Now, this is what Nkrumah of Ghana said. And also Nyerere of Tanzania said, well, capitalism encourages individual aquisitiveness and competition. We don't want that. We want social justice. So we want socialism. So a lot of African leaders adopted socialism as an ideology. And by that ideology, socialism meant state participation in the economy. Smarter-of-fact Nkrumah of Ghana said that under socialism, state participation in the economy was to be taken to a point of complete ownership of the economy by the government. Very, very, very frightening. And accordingly, Nkrumah nationalized all foreign companies, set up state enterprises, imposed price controls, gagged the press. Anybody who spoke out against Nkrumah was locked up. At a time of independence, Ghana's per capita income was $200 per head. And Ghana also had a respectable foreign exchange reserves of $400 million. Three years into Nkrumah's socialist experiment, Ghana was bankrupt and borrowing money. Now, when Nkrumah was overthrown in 1966, Ghana had a foreign debt of about $1 billion, with nothing to show fall. We had all these state enterprises, but they were so hopelessly inefficient that in 1983, for example, about 20% of those state enterprises were producing, using 40% of their capacity, industrial capacity. The rest were just making losses upon losses upon losses. We had a Black Star line shipping agency. And it had so much redundant stuff that in 1984, about 284 of them were paid for three years to stay home. It was not only in Ghana that you had all these state enterprises, Tanzania, Somalia. Somalia, for example, under socialism, state enterprises. Somalia built a plant to box bananas. But the amount of bananas the plant needed to break even exceeded the entire national output of bananas. A lot of the industries that were acquired under state ownership and also under state socialism were so haphazardly acquired that they were inefficient and very, very poorly designed. Ghana also built a state sugar factory. It took three years to complete that factory in 1979. And when it was completed, that factory laid idle for a year because somebody forgot to install a water supply system. If you go to Tanzania, for example, if I could give you a few statistics, many of the state enterprises established under Nyerere have been so grossly bloated. And also, many of them are simply just not paying their way. Besides state enterprises, African governments also set up state farms to produce food for their people. And the state farms that Ghana set up were so inefficient that it could not even produce enough food to feed its own workers, let alone the nation. Now, the same experience also occurred in Tanzania, where under what was known as Operation Dordomar, many peasants were uprooted and forcibly settled under some village community programs, which Nyerere called Injama. After that experiment in 1973, between 1974 and 1975, agricultural production plummeted. Tanzania used to be able to feed itself. But by 1983, it was important, close to a third of its food needs. There is no question, and I'm not going to bore you with giving you lots and lots of statistics, there is no question that the socialist experiment in Africa was a complete failure. Why did it fail in Africa? There were four reasons. One, socialism created a very huge and unwieldy state bureaucracy. And that bureaucracy was characterized by waste, inefficiency, and mismanagement. The second reason why socialism failed in Africa was because the ideology itself created a whole paraphernalia of controls and regulations. And this is important. The controls and regulations breed corruption. And the problem is, when corruption appeared in Africa because of controls, African governments wanted to correct the corruption. So they imposed more controls. As if more of the bad medicine would cure the patient. The third reason why socialism failed in Africa was because it resulted in an extreme concentration of powers in the hands of a tiny minority as the ruling elites. And this power, in much of Africa, was used to suppress. I should say that that power was abused, used to suppress the present majority. If you take a look across Africa, there are two classes. They have the elite minority, and they have the present majority in almost every African country. The elite minority has concentrated all the power in itself, and does not share power with the present majority. Now, there are 41 black African countries, and only two of them allow the present majority the right to vote. Many of these African leaders calling up on South Africa to give blacks the right to vote, which they should have. Nobody questions that. Themselves do not allow their own black African people the right to choose and vote for their leaders. The fourth reason, and this is most important, why socialism failed in Africa is because the ideology itself is alien to indigenous African culture, very important. That ideology is alien to indigenous African culture. In indigenous Africa, all the means of production, with the possible exception of land, is privately owned. The fishing canoes, the nets, the hats, the bows and arrows, they are owned by peasants. They are not owned by their chiefs. The peasants go about their economic activities on their own initiative, not at the behest of their chiefs. And when the peasants produce any surplus, they take these surpluses to village markets. And now these village markets have always been open and free. The chiefs do not impose price controls on their peasants. And when the peasants make any profit, it's theirs to keep, not for the chief to expropriate. There were free markets in Africa before the white man set foot on the continent. And there was free trade on the continent before the European colonialists arrived. Before the explorers arrived in Africa, there were free trade routes, crisscrossing. In fact, Africa was a dense web of trade routes, crisscrossing the continent. The most notable ones were those crossing the Sahara. And you have Trans-Saharan trade. These trade routes were in existence as far back as the 9th century. Africa was quote unquote discovered in the 16th century. Along the southern terminal of these free trade routes were such market towns as Timbuktu. Timbuktu was a great market town, free trade market town. And Kano, in Salaga. There were also empires in Africa. There was the Mali Empire, there was the Ghana Empire, there was the Sungai Empire, and also the Great Zimbabwe Empire. The fortunes of these empires were built on free trade. This was what was there before Africa was colonized. The peasants are enterprising individuals. And they engage in trade and sell their produce on open free markets. In the traditional system, the chiefs do not operate state enterprises. In the traditional system, the chiefs also do not lock up dissidents. In the traditional system also, the chiefs do not impose foreign ideologies on their peasants. All impose themselves on their peasants. Nor does the chief declare himself president for life. The chiefs are appointed. They do not appoint themselves, that's the difference. And when a chief does not rule, according to the will of the people, he's thrown out. In the indigenous system of government, there was participated democracy. If you go to Ethiopia or Addis Ababa, you find a portraits of Max and Lenin. It says a lot. And this is what it says. Now, here we are, black Africans. In the sixties, we said we did not want the white colonialist. So we hauled on the portraits of the European monarchs. And in Ethiopia, we put up the portraits of another set of white aliens. The peasants look at this and they say that is basic stupidity, one or one. I'd like to stop here, and if you have any questions, you can ask. I've read this book after a party, The Solution. I think it is a very important step in, as a matter of fact, I review that book. And I could send people copies of the review if they're interested. What I like about that book is its emphasis on free markets. But there are a couple of things which I didn't like about the book. And what I didn't like about the book is that the model that he proposes for South Africa is the Swiss model. And the book he says that even the Swiss model is much more appropriate for South Africa than for Switzerland, than for Switzerland itself. I didn't think that was necessary because, you see, this is what we did after independence. When we gained our independence, we never sat down and used our brains to devise a system which is suitable to our own circumstances and conditions. We hopped from one foreign country to another and borrowed, copied foreign systems and planted them in Africa. They never worked. So when Leon Laos says that here is the Swiss model which is appropriate for South Africa, I sort of hesitate. We ought to be able to create our own system which will work in South Africa. And there's one thing which I like to put across to you and that is whatever the system, whatever system that is installed in South Africa, there's one condition which must be demanded. And that is anybody who runs for federal office in South Africa must win at least 20% of his vote from a race or a tribe other than his own. Think about it. If we had done this in independent Africa and if you needed 10% of your vote from a tribe other than your own, we would have built bridges to the other tribes to try and win their votes instead of slaughtering them. There's sounds of the elites to go to school. Well, most of the socialists got their training from the West, from Harvard and from the London School of Economics and from the so-born, yes. Senegal and Botswana. Pardon? Yes, let's take Egypt, for example. Before you get a permit to build a house, you must go through 32 separate stages of getting approval. I think we should care about governments. Well, we had no chance. Most of the power was concentrated in the hands of just one individual. You know, take a look at Zimbabwe, for example. You can't criticize Mugabe. I guess the man who set himself on the course of Marxist and letting his path can't criticize him. Now, in all those African countries, there are 51 African countries, their freedom of expression is in only four of them. Four, Botswana, Senegal, Mauritius, and possibly Nigeria. Kenya is beginning to unravel. Said, I personally believe that the most effective aid that American can ever render for Africa is to help re-institute Africa's own indigenous freedom of expression. Because there are many Africans like me who would like to speak. I can speak like this in Africa, there's no way. But I'd like to be able to speak like this in Africa. It's a combination of incompetence and corruption. It is almost everybody, this is important, almost everybody realizes that things have gone wrong. And almost everybody also realizes that Africa will be indispensable to the West. Africa is a source of many strategic minerals, gold, diamonds, cobalt, some oil, manganese, bauxite, vanadium, rhodium. So the West can't do without Africa. Africa is too vital for the West, economic security. But it places, you know, ravaged by a crisis. How do you solve it? Two problems. One, the causes of the crisis have been both external and internal. Most of the African leaders, of course, would like to say that all the, would like to put all the blame on the external factors. They don't want to look at the internal factors. Now if the internal factors are important, and obviously we have to devise internal solutions for them, but we can't because the freedom for us to do so doesn't exist. So what happens? There's Americans and the IMF and the World Bank which draws up solutions and give these solutions to African leaders. But that wouldn't work because there's only so much Americans and the IMF can do in Africa without being accused of interfering in the domestic affairs of sovereign African nations. So what do we have to do? The solution lies in telling the Africans, all right, if you don't like our solutions, we'll draw one up yourself. The real solution is for the Africans themselves to come up with their own solutions, but they can't because of autocratic, you know, leaders. Oh yes, we take a look at Zaire, for example. In Zaire, of every $1 that comes in, as well as the officials take 20% off the top for their own personal cut. Foreign aid has supported and has underwritten oppressive policies in Africa for a very, very, very long time. You know, take a look at Ethiopia, for example. What are you doing in Ethiopia? Should Americans cut off foreign aid? Many would say, no, there are people starving in Ethiopia, we can't cut off foreign aid. We have to give them aid, we have to save the children, we have to save the Ethiopian people. But if you ship the foreign aid, where does that go? Men used to insist that, you know, the foreign aid has to pass through the government. And in 1985, when millions of Ethiopians were starving, this man found a way with all to import $100 million worth of Scotch whiskey from London to celebrate the 10th anniversary of Soviet imperialism in Ethiopia. Nobody said anything. I think it was more of an accident, more of an accident because, let me explain this. See, when we gained our independence and we wanted to develop, there were so many, let me use the word foreigners, who wanted to help us. Which road should we take? Should we take the capitalist road or should we take the socialist road or should we take what road? At that time, nobody had any idea of the psychological makeup of the African peasant. The majority of Africans. Nobody understood them. A lot of, there were a lot of, you know, misconceptions and myths about this peasant. Nobody even knew that there were village markets in Africa. So we had planters who came to Africa and said, well, you can't rely on the market because the market doesn't function. You can't rely on the market because the peasant doesn't respond to market incentives. What you gotta do is to have the state planters and plan that and plan that. So African governments drew up very ambitious developing projects and plans. Came to Washington, handed it over to the American government. American government said, yes, we're gonna support you. Because, you see, the American government itself didn't understand what was there. So what I'm saying is that if you wanna help the peasants, Common Sense says that you gotta understand those that you're going to help. And you gotta understand their system. What is their system? Their system is a free market system. The peasants are free enterprises. What they grow on their plots of land are for their own individual decisions to make, not for the chief to dictate to them. That system, the indigenous system, came under unrelentless assault after independence by our own leaders. As recently as 1983, the government of Ghana was blowing up indigenous markets. Yes, and burning down indigenous markets. Why? Because the peasant food traders will not sell their produce at government dictated prices. And the government was locking them up. The government was locking up and throwing up these food producers in jail. In 1984, after so many of them had been thrown into jail, the government realized that they didn't have the food to feed them. Common Sense. Of course, if you jail up all the food traders, where the hell are you going to get your food? 30 of them, by the way, died in prison. It is, both of those regimes are military. And I personally do not go for military regimes in Africa, because the military has been discouraged of Africa. If you take the African countries which are considered to be economically, the economic basket cases, Ethiopia, Angola, Ghana, Liberia, Nigeria, Zaire, Uganda, Somalia, all these are economic basket cases. They're all being ruled by military dictatorships. There's a correlation between military regimes and the economic performance. Soldiers do not know how to run economies. Even the soldiers, the military that we have in Africa, they can't even do battle with armed robbers in their own countries, let alone defend their countries. Ghana derives about 65% of its foreign exchange earnings from cocoa. Now cocoa is produced by individual peasant farmers. Now listen to this. Individual peasant farmers can sell their cocoa to only one buyer, and that is the state cocoa marketing board. Now the state cocoa marketing board sets the price. It's going to pay the producers, all right? So if you produce cocoa and you don't like the price that the state is paying here, you have very little choice. Now the price that the government of Ghana pays the farmers is politically determined. It's not determined by market forces. In 1984, what the government was paying the farmers was about 20% of the world market price for cocoa. Of course, the peasants were no fools. They took their cocoa elsewhere where they could get a better price. They smuggled it, took their cocoa to every coast. Now what did the government of Ghana do? The government of Ghana said, ha, these smugglers are nation records, they're economic saboteurs. If we catch the smugglers, we're going to shoot them by firing squad. 1985, the government of Ghana came to its senses and offered better prices to the farmers. And Cocoa Marketing Board was able to sell more cocoa to the world market. Yeah, okay? This is a philosophical question. How many economists, and I believe in the free market? How many economists and I believe in the free market system? Yeah, but when we come to development, it happens that the indigenous people are free enterprises. No, the thing is, you plant what is suitable to your own conditions. The fact that California grows apples does not mean that we should grow apples in Africa. The thing is, we have a system which is part of our culture. It wasn't perfect. Our responsibility was to take that system and you build upon it and improve upon it. What the African leaders wanted to do was, what they did was they went to China and Russia and so many other countries and borrow systems and planted them there. They were alien and they didn't survive. So we wasted a lot of money, time, energy, and so forth. So what I'm saying that, let's go to the indigenous system. What is there is free enterprise.