Business

Why 'selfnomics' sounds better than Railanomics, Rutonomics

Why 'selfnomics' sounds better than Railanomics, Rutonomics

Last week, we analysed the economic models of the two leading presidential contenders, William Ruto and Raila Odinga.

The latter has not declared his candidature. Could he surprise us by not contesting and supporting someone else? Have we considered that possibility?

We argued Railanomics and Rutonomics are the two sides of the same coin. They both focus on the bottom of the pyramid, the men and women who struggle to make a living - popularly called hustlers.

They focus on giving them money, either as soft loans or stipends. There is little airtime for the wealth creators.

The two leading contenders know that we love money, and we care less about how it’s generated. This is the soft underbelly of the two models - they leave out the key economic player, the self.

What should each of us do before the government comes in?

Today, we introduce what I think is a superior model, selfnomics. It’s an economic model that puts the key economic players - you and me at the centre of economic transformation. Selfnomics demands that before we call on the government, we do our part.

Selfnomics is not new. Its key proponent was Adam Smith, more than 200 years ago. His basic argument was that by letting individuals pursue their own interests, the whole society benefits.

If we let farmers to pursue their interest (farming), we would get plenty of food. But we have to reward that interest with profit. In most countries, farmers get subsidies to ensure they keep growing foods for national security and pride.

The same applies to other entrepreneurs. The supermarket owner does not run it because he loves you. He or she probably knows very few customers, but he loves the profit. That applies to big firms and small and medium enterprises (SMEs) too.

In the public sector, we would reward the pursuit of self-interest with good salaries indexed to inflation. That is why career selection is more important than we think.

Even those who drop out of school should have some interest. That is why clubs and societies matter so much in school. They complement the curriculum in arousing the interest of the student or future entrepreneur or employee.

Where is the self in Rutonomics or Railanomics? He or she seems to be a spectator waiting for the government in 2022. Selfnomics puts the citizen at the centre of economic transformation.

He or she is the producer. He or she supplies labour, capital, and entrepreneurship. The land is held a constant. It’s just “there.” Remember the government is not really a producer.

It just facilitates the other factors of production by creating an enabling environment. It ensures there is political stability, optimal regulation, security and as a source of information for decision-makers as they combine the factors of production.

That is why the government funds research and the national bureau of statistics. In selfnomics, we need to harness and reward the self-interest of the individuals, particularly the idealism of the youth.

How do we make the citizens believe they are the transformers of the economy and not the government? How do we make them believe the government is everywhere?

When the national government is not around, the county government is there, each pretending the other does not exist. Ask businessmen.

The predominance of the government, read public sector is the thread that ties Rutonomics and Railanomics. Yet the future lies in the private sector, where the self can pursue his or her own interests to full potential.

Think of it, who are the most self-actualised citizens in Kenya, those in the private or public sectors? One of the most talked-about problems in Kenya is corruption, which is at the heart of self-interest.

Supposed we harness the self-interest manifested in corruption for the public good? Yet there are men and women who have made their money honestly, from the sweat of their brow.

It is sad that we have come to believe that you can’t make money honestly in Kenya. Let’s point out that self-interest should not be hedonistic, is pursued within a social set-up, regulated by traditions, religion and laws.

The key players in selfnomics must be men and women anchored in a well-functioning political system that is self-correcting. Regular elections are one way for self-correction. That is why rigging is so disastrous to a country.

Selfnomics is not popular in Kenya. We love passing the buck and avoiding work. We would do anything to avoid work. In fact, one reason our universities have grown so fast is because of our firm belief that by pursuing higher education, we can earn more by working less.

Who then should work?  That is why we do not want to see a graduate driving Uber or at a construction site. Without mechanisation, there will always be someone to do that work.

Rutonomics and Railanomics seem to imply that once in power, work will end. Yet there is nothing like free lunch. Economic growth is about citizens working and hopefully enjoying it. Both models should stop the chorus that the State should create jobs.

Jobs are created by you and me - either as consumers or producers. And not brokers. One fear of both models is that the wealth creators will suffer. Selfnomics require that individuals be rewarded for their ingenuity, creativity and innovation.

But we still think the rich and affluent should share their wealth, either through harambee or donations even after taxation. Failure to reward self-breed corruption and inefficiency. Counties and regions that rewarded and moderated the self-have done well. Think of the US.

It is the epicentre of capitalism but also philanthropy. In Scandinavia, they gave moderated capitalism a chance, and it has worked.

We have spent too much time talking about groups like tribes, politicians among others but not individuals and their interests. May our next president should be a psychologist or better a psychiatrist.