Last week someone posted on social media that the six
richest men in East Africa own as much wealth as half the region’s population,
about 66 million.
The post of course invited the knee jerk reaction of disgust
at these men’s greed for owning so much when millions of East Africans are existing
on a sub-human level.
There are right and wrong.
They are right to be disgusted because such wealth disparity
is generally not healthy for economies. But they are wrong in venting against
the said gentlemen, who in many ways it’s not their fault that they are where
they are and the rest of us are where we are.
The richest men in the world, in our region, in our country
are businessmen. Some workers may be paid highly, but a high salary does not
equate to wealth. The rich are rich because they manipulate all or at least two
of the factors of production – labour, land and capital. While the worker only has
his labour which may not be entirely in his control.
Because the sum of the whole is greater than the sum of the
individual parts, you can see why the businessman will always come out on top
of the money sweepstakes.
The businessman’s ability or skill in manipulating these
factors to serve more and more people is what makes him grow richer and richer
with less and less effort. Somebody once said that turning $1m to $10m is work
but turning $10m to $100m is inevitable.
Imagine how many hours in diligent service, study and
sacrifice it would take a worker to double his salary from its present level?
We really are not in the same race.
"While creating the enabling environment for business to thrive, governments need to tax these businesses and use the money to improve general infrastructure so businesses can continue to expand and to improve on social services so the people can be better educated, given the probabilities the better educated one is the better paid they will be and healthier, more work days not interrupted by sick leave would lead to improved income....
The worker if he is lucky is increasing his income
arithmetically while the businessman in relation to his skill would be
increasing his wealth exponentially.
It is made worse by the fact that the bigger the businessman
the more the need he will have to be involved with government, to influence
policy. So again by aggregating resources he becomes someone government needs
to pay attention to.
Governments only respond to numbers.
One lone man ranting at the corner of the street may only
get detained for a few hours, but an angry businessman with thousands of
workers, serving millions of clients and paying billions of shillings in taxes
is another matter altogether.
The rich will get richer. Of course there will be those who
fall off the gravy train every so often but as a class they will get richer.
Which is not a bad thing in itself.
An economy is only as viable as its private sector. After
all it’s the private sector that creates wealth, not governments. So it’s in every well-meaning government’s
interest to see that the business community thrives. Good governments do this
by ensuring general security, macroeconomic stability and that contracts are
upheld.
In the general population not everyone is an entrepreneur
and less so those who will become spectacularly wealthy. Since the success of
choosing winners has been patchy at best, it is important to create an
environment where all those who may have an entrepreneurial inkling can try
their hand and allow the cream can rise to the top.
The few who stick their necks out and win become rich.
What we need to guard against is that inequalities do not
get too large as to destabilise the whole system.
That too is where governments come in. While creating the
enabling environment for business to thrive, governments need to tax these
businesses and use the money to improve general infrastructure so businesses
can continue to expand and to improve on social services so the people can be
better educated, given the probabilities the better educated one is the better
paid they will be and healthier, more work days not interrupted by sick leave
would lead to improved income.
With better incomes the workers may have a better chance of
climbing the wealth ladder.
Growing wealth inequalities are an indictment on the
government of the day, a reflection of its inability to distribute the benefits
of rising wealth in the general economy.
So, that there are people making money in an economy legally
is welcome and should be seen as a sign of hope for the rest, and not only
because these trailblazers are showing what is possible in our context.
In fact while the tycoons will be a tiny proportion of the
population we need to grow more fabulously wealthy people in order to get
government to think more progressively. But that is a story for another day.
