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There is no free lunch

[By Remmy Mwamba]

Preamble

Globally, the subject of caring for the have-nots has been a topical issue for centuries. The writings of Karl Marx and his latter-day disciples have kept fanning the flames of the welfare state to this day. On the other hand, the tenets of capitalism have their foundations built on the bedrock of profit motive and survival of the fittest. However, proponents of both sides do not seem to have a convergence point.

In Africa, leftist policies were the official economic doctrine until the late 1980s when most countries found themselves inextricably woven in the web of Structural Adjustment Programmes. The transition from socialist to market economies left much destruction in its wake.

In Zambia, we have been oscillating between the bipolar positions. Striking a balance between economic growth and poverty alleviation has been elusive to say the least. The twin problems of poverty and unemployment have been intractable without any signs of abating.

Following the landmark victory of President Hakainde Hichileam, AKA, Bally, the most topical subject hanging in the mental skies of many citizens today is: will HE Hakainde Hichilema fulfill the promise of free education? According to Bertrand Russell, “The greatest challenge to any thinker is stating the problem in a way that will allow a solution.” In laying the foundation, the article begins with two stories as building blocks for the arguments presented thereafter.

Story 1: What is economics?

“Once upon a time, a very young couple became king and queen of their country. They wanted to do good things for their loyal subjects. Above all, they wanted peace and prosperity. So, one of the first things they did was call in the country’s top economists and tell them to put on paper everything there was to know about economics. Ten years later, the economists handed the king and queen 40 volumes of fine print. Since the rulers were in the midst of treaty negotiations with another country, they had no time to read all of this material. So, they told the economists to condense their writings into a single volume.

Ten years later the economists returned with all their work condensed into one volume. But, by then, the rulers were too busy running the government to be bothered reading it. So, they asked the economists to condense the one volume into a single pamphlet. This was a difficult task, which took the economists 20 years to complete. By then, the eye sight of the royal couple was beginning to fail, and reading even a pamphlet was difficult. So, they asked the economists to condense further. Another ten years passed before the job was finished. But, by then, the king and queen were dying of old age. So, they asked the economists to grant them one final request. They wanted to hear the sum of all economics reduced to one sentence. The leader of the economists rose to speak. “Milord and Milady,” he said. “After working hard for many years, we have reduced the science of economics to one sentence.” The king and the queen were pleased to hear this. They urged the economists to tell them the one sentence.

“We have found your majesties,” said the economist, “there is no such thing as a free lunch.” Economic educator: (James Brown, 1981).

Story 2: Economic decision making

“Just as a good mechanic can teach a lot about how a car works without subjecting his listeners to a lecture on compression ratios, so a good teacher of economics should be able to explain a lot about how the economy works without subjecting his audience to long technical explanations. But the engine of an economy is different from the engine of a car in one vital way; its parts are people. A mechanic may be able to fix a badly working engine by disconnecting or reconnecting things or by discarding worn-out parts for new ones. But when you fix an economic engine, you are disconnecting or reconnecting people- to work, money, opportunity. When you throw old parts of the engine aside and put new ones, you are consigning industries, regions, and cities, to hardship or good fortune. Thus, an economist can never fix the economy the way a mechanic can fix a car. No matter whether he assures you that the economy will run faster and farther and more smoothly after he repairs than before, there are always human costs as well as human benefits involved. Changes in the economic machinery never lift everyone evenly… Usually economic remedies spread the effects unevenly, making the rich richer and the poor poorer, or vice versa; …boosting one interest leaning against another.” And so, the real challenge…is to find resolutions…that will be acceptable to the people who are the economic machinery (Robert Heilbroner and Lester Thurow, 1981).

Using the lens of the above stories, we can now trace the footprints of our country with the aim of understanding where we are coming from and the stark realities that confront us.

Looking back

Kenneth Kaunda, one of the greatest sons of Africa, believed with every ounce of his being, the nobility of government’s duties towards the poor and vulnerable members of society. His unwavering love and passion for his country, was the fountain of his philosophy: Humanism.

Following in the footsteps of Russia, Eastern Europe and China that were seemingly flourishing, KK and his colleagues embarked on the process of economic transformation fashioned in the image and character of Socialism. The creation of parastatals bears testament of his passion to give citizens to full and meaningful lives.

KK held so tightly to these views and beliefs such that even when the fault lines in the ideology became blatant, he stayed the course. A legend says that in 1986, KK went to witness first-hand, the ravages of the food riots in Kitwe. He arrived in Chimwemwe compound disguised in a military combat. Stepping out of the helicopter, he went straight to a little boy who was crying. Kneeling to the height of the boy, he asked, “Cinshi ulelila (why are you crying)?” The boy responded, “Teici cine ci Kaunda calunda umutengo wabunga nomba tulecula (It’s Kaunda who has increased the price of mealie-meal and now we are suffering).” Being the embodiment of compassion and love for his fellow human beings, KK was immediately overcome by anguish and broke down into tears. He went straight into the helicopter and flew back to Lusaka. The next day, he announced mealie meal coupons! With the benefit of hindsight, this was a band aid.

Those who lived during the days of “free education and subsidies; continue to eulogise KK as the greatest president Zambia ever had. It is therefore not surprising that when Professor Nkandu Luo removed the allowances for university students she was vilified, with many describing the decision as ‘heartless’. For me, it was a bold decision. I find the blame heaped on her to be unfair based on the following points:

Contextualising the realities

In 1967, when UNZA was inaugurated, the population of Zambia was around four million citizens. The economy was strong and could comfortably support the few students that were enrolled. Fifty-four years later, there are close to thirty thousand students! Today, there are more than six public universities as well as private universities with close to eighty thousand students without including colleges.

From 1974 to 1991, Zambia began to borrow to sustain the social and economic sectors in the firm belief that copper prices would rebound. They never did. Eventually, KK was forced to approach the IMF for a bailout plan. In essence, KK was borrowing to maintain hospitals and universities to sustain a semblance of ‘free Education’.

Our current economic position requires us to move the economy from the intensive care unit to stabilisation. Only then, can we begin the slow process of economic growth. The GDP needs to grow around 10 per cent for the next few years to begin posting real dividends to our people. Further, government must dismantle the arrears of hundreds if not thousands who have not been paid their terminal benefits as well as suppliers of goods and services

With increased students completing Grade 12, it has become clear that public universities cannot absorb all eligible learners. At inception, government was funding public universities to subsidise students on tuition fees and meal allowances. Partly, this explains the over enrolments in public universities that have resulted in the reduction of quality in our institutions that were once centres of excellence.

Facing the economic realities

Conservative estimates indicate that 70 per cent of internally generated revenue goes to paying wages for civil servants leaving a paltry 30 per cent to carter for the rest of goods and services. The turnaround time for paying terminal benefits for civil servants is somewhere around 3.6 years. During this period, a civil servant is entitled to a full salary while not contributing to the pension fund! This is similar to mopping while simultaneously leaving several taps leaking!

The National budget last year was almost 50 per cent financed by debt. Unless we graduate to a level where we can finance our own budget using internal resources, it would be a pipe dream to provide free education from primary to tertiary level.

There is a lack of prioritisation in university and college enrolments. Some programmes are over enrolled such as Business and Education. Probably, students going into STEM courses could be subsidised because these skills are in short supply and critical to national competitiveness.

The way forward

The New Dawn government must approach the competing demands with sobriety. In the last ten years, the people who were pleading with PF to live within our means became like “the voice of Him crying in the wilderness!” Going forward, economic growth must be prioritised and phased, to ensure sustainability.

Today, we find ourselves in this economic quagmire largely because of uncoordinated planning and looting of unprecedented levels. For once, let us proceed methodically. The moral of the stories at the beginning lays bare before us the immutable truth according to Newton’s Third Law, “To every action, there is an equal and opposite reaction.’’

This principle holds true in every aspect of life. For example, for every subsidy given, there must be a tax on someone. This is the reason PF ended up introducing so many subsidies which they could only sustain with more taxes, contrary to their policy of ‘Lower taxes’! It is this intellectual incoherency that must be avoided by the new dawn government at the very outset.

Conclusion

“For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it… (Luke 14:28 NKJV). Suffice to say again, “THERE IS NO FREE LUNCH.”

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