By Abel Merawi
September 2, 2020 (Ezega.com) -- When the people cry for economic relief, the leaders speak of ethnic solutions. When despairing farmers require modern technological solutions, the leaders disguise it in racial inequality. The youth demand employment while leaders preach of regional separatisms. Without identifying the root of economic problems, we cannot begin to solve it. The individual, who is born free, faces the difficulty of even properly identifying and formulating one’s demands. It goes without elaborate discourse that individual freedom is an illusion without economic freedom. Let us be bold enough to admit that Ethiopians have economic agendas but certainly not ethnic or racial agendas. However, the incessant false doctrine of leading and opposing ‘politicians’ attempts to create it.
Freedom comes with a choice accompanied by responsibility. Such freedom comes with preliminary conditions. These conditions include an education that sparks the seeking mind; a political realm that furnishes or, at least, tolerate freedom of expression; the availability of basic public infrastructures; and an economic model that gives hope of shifting from rags to riches.
Poverty is a barrier between the individual and freedom. In poverty, the constant chase after basic needs hinders vision and volition. It is near impossible to exercise freedom when you don’t know where or how your next meal comes. It is difficult for parents to accomplish their dreams when providing the rudimentary needs of their children is a huge task. The fresh graduate couldn’t become an entrepreneur while still dependent on aging parents who require the child’s support. At school, it is difficult for an economically struggling teacher to inspire students on the value of education. In these and more ways, poverty constraints our physical and mental movement.
As the expression goes, ‘No (hu)man is an island.’ Our birth is welcomed by citizenship. Accordingly, our freedom is stretched or narrowed by the political and economic system of the country and the citizenry we are a part of. To expound the meaning of economic bondage in Ethiopia, we shall begin with a discussion regarding the nation’s political and economic situation. Politically speaking, Ethiopia is threatened by ethnic violence among the supposedly dominant groups. Verily, the unity of people is indispensable from economic growth. The recent violent mob protests and the diabolical narrative of their leaders resulted in the loss of precious human lives. They have made millions of innocent people homeless and in want of aid due to no fault of their own. The destruction of religious institutions has taken away the solace of despairing people who found hope from the Divine. The destruction of public and private properties has stolen the hard-earned money of honest and hardworking people while making investors reserved about investing in the country. In Ethiopia, the work of politicians seems to be only adding fuel to fire.
Peace and unity are essential to economic progress; however, it is not enough without a working economic system. To truly judge the effectiveness of an economic system, we should examine the prospect for growth of the lower and middle class through ingenuity and diligence. When few individuals and groups possess the capital of a nation, the rest of the people are bound to be subservient. There are natural resources in every nation, and when only a few take possession of them for generations the rest lead a secondary life characterized by servitude. Perchance a closer observation on the relationship between the employer and the employee will give us a better understanding.
In capitalism, there is a wide perception or, more likely, misperception about the rules of the game. The first assumption is that the capitalist hires the employee for a service, and so it is consensual and fair. The second assumption is that the price of goods and services increases when the salary is raised. The other assumption is regarding taxation, which is assumed to be progressive and just. Among other things, the way we understand these three points determine our economic life. Dr. Cornel West and Roberto Mangabeira Unger in ‘The Future of American Progressivism’ (1998) argue: “The hope of social mobility – the ability of the determined individual to climb the ladder of class distinctions – depends upon the economic and educational resources at the disposal of each individual as well as upon the barriers of privilege, discrimination, and exclusion he or she must face.” Accordingly, an economic system that ignores and discourages social mobility results in unjust economic inequality.
A similar assumption is held by the employer and the employee that argue: since a person agrees to do certain work for a certain price, without physical coercion, the deal is fair. I find it hard to agree with such a statement and ask: is it fair when poverty and lack of opportunity drive you to consent with whatever the employer wishes to pay? Can you bargain for salary when indefinitely unemployed? More importantly, does the payment match the profit you made for the employer? Karl Marx in his work ‘Poverty of Philosophy’ defines the cost of labor-power as, “the cost required for the maintenance of the laborer as a laborer, and for his education and training as a laborer.” In other words, the salary of the employee should not only provide for basic necessities but also for future growth.
The second assumption is that the salary of the employee is determined by the market price of the service or good. In other words, as salaries increase, the price of goods and services inflates. This, I believe, is an absurd argument since what the employee is negotiating for is the share of profit between the capitalists and the worker. In a hypothetical and simple scenario, let us assume a capitalist buys the raw materials of a single product for 500 birr, pays 100 birr for the employee, and sells it at the price of a 1,000 birr. This means, the total profit from a single production is 500 birr, from which the employee takes a 100 birr and the capitalist takes 400 birr. Thus, when the employee asks for better payment, it is from the 400 birr the employer is taking. However, the oldest trick of the capitalist is increasing the price of commodity without risking or even increasing one’s profit. Karl Marx argues, “The rise and fall of profits and wages express merely the proportion in which capitalists and workers share in the product of a day's work, without influencing in most instances the price of the product.”
The taxation system is also another misconceived concept. It is assumed that taxation is progressive, which neglects the huge difference within the tax circles. The same and more is true of the tax system for the employed. For instance, to tax a person earning 15,000 birr 35% equally with the one earning 60,000 birr is downright wrong. The same is true in taxing the same amount to the producer who profits 1 million and 10 million. Returning to the case of the employed, the tax system does not encourage saving not just because the tax rate is high but also because there is double taxation. I call it double taxation because there is taxation both on income and consumption. As Dr. cornel west argues, “A shift to consumption-based taxation may help raise the saving level by exempting saving from taxation.” Therefore, consumption tax encourages savings on income and may help the working class that is held in a cyclical life.
The aforementioned points are at the heart of Ethiopian economic disparity, but are not the only ones. Truly exploring the economic problems of our country ought to become the priority of Ethiopian economists. Sometimes, the real issue is found in the silence. When everyone engages in racial problems, the economic issue is ignored and silenced. If opposition party leaders spend more time on solving the country’s economic agendas than creating ethnic problems, we would have made much progress. As for individuals, they continue the existence of economic bondage with no one, even themselves, unable to understand and rise above it. The first step is to cease focusing on the sideshow and confronting the real problem. Let us end our discussion with the words of Dr. West and Unger who remarked:
“To understand your country you must love it. To love it you must, in a sense, accept it. To accept it as it is, however, is to betray it. To accept your country without betraying it, you must love it for that in it which shows what it might become.”
Abel Merawi is Addis Ababa-based contributor for Ezega.com. He can be reached through this form.
Other articles by Abel Merawi:
Free but in Chain. Part II: Social Bondage
Free but in Chain. Part I: Bondage of Worldview
Unemployment and Economic Growth in Ethiopia
The Underestimated Human Ignorance
Is America the Land of Freedom? (Part II)
Is America the Land of Freedom? (Part I)
Capitalism Becoming an Impediment to Morality
Ketman: Living in Disguise to Gain Acceptance
The System and the 'Criminal'
Trust as an Economic Force
Do You Trust the Government?
Our Online World
Fame Mistaken for Expertise
The Heavy Burden of Healthcare Workers
A Time to Reflect
The Plague by Albert Camus: Fiction Becomes Reality!
History of Pandemics in Ethiopia
Human Struggle Against Pandemics: Historical Perspective
You Can Make a Difference
Rule of Law for a Free Society
The Origins of Law
Determinants of Market Value: Part II
Determinants of Market Value: Part I
Your life Matters Too
Manifestations of Artistic Expression
Achievements vs Natural Accidents
The Grip of Sacrifice
Injustice is Never Justifiable
Education Demands of the Future
Job Security, Life and the Unpredictable Future
The Shift From Racism to Culturism
Sacrificing Meaning for Power?
Culture and Market Forces
Seeking Cosmic Justice
National Myths: Makers and Destroyers of Nations
Are We Truly Free?
Maturity: The Prerequisite to Freedom and Democracy
Loyalty to Truth, Not to Group
The Value of Work
The Flaws with Ethiopian Political System
Intellectuals and the People
Where Are Our Pathfinders?
The Allegory of the Cave and Its Lessons to Leaders
The Truth Behind Humanity
The Seven Virtues
The Seven Deadly Sins
What is the right thing to do?
Building National Identity
Adey Abeba and the Spirit of Change
Living the Truth as a Human Being
Hubris - The Tragedy of Not Learning from Others
The Era of Group Mentality: Us vs Them
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