There is a lot of chatter about the economic condition of Zimbabwe in the news these days and I think it’s a very interesting situation.
The history of the country is fairly fascinating and plays into those condition. I’m going to go over that quickly before I get onto the pertinent economic issues. Like most African nations prior to the arrival of Europeans it was a tribal state for most of its history. The region was rich in gemstones and a fellow named Cecil Rhodes recognized this and largely created the country. Current day Zimbabwe is a major of diamond exporter and Rhodes, a mining expert, saw that potential. He is also the founder of the De Beers diamond company.
The country was eventually named Rhodesia in his honor and prospered when Europeans (read whites) immigrated and began both mining and farming in earnest. During what is called the Colonial era these European subdued native (read black) rebellions and forged a self-governing British colony. This colony prospered thanks to both the diamond mines and burgeoning agricultural industry lead by tobacco and cotton. The farming industry once contributed as much as 40% of the country’s exports and was also self-sustaining in the production of maize to feed its own people. However, gemstones were and remain the main economic money-maker in the region.
Eventually the British colony fell under scrutiny for their racial inequalities and sanctions followed. The British themselves, who outlawed slavery long before the United States, were proponents of majority rule rather the status quo of minority rule. The natives eventually waged a war of independence and gained the control of the country in 1979 instituting a relatively equitable system. Whites kept their property and control of the police, civil service, and judiciary while blacks took control of the government. Clashes between enemy tribes then ensued and many blacks were slaughtered by other blacks.
On an economic front there was general despotic rule in which unions were suppressed and socialist government take-over of universities was at least attempted. This mix of socialism with crony capitalism is worth noting. We tend to lump socialists in one camp and capitalists in another but under totalitarian rule the two intermingle quite nicely. A small minority gets rich using monopolistic policies coupled with socialist takeover of industry. A mix of two bad policies leading to … disaster.
The totalitarian regime seized farmland from prosperous white farmers who controlled about 70% of the arable land despite policies designed to encourage blacks to purchase that land. This redistribution failed miserable, as might be predicted. Without experienced farmers, capital outlays, and a long-term strategy the farming community collapses. A drought didn’t help.
Meanwhile the powerful regime grew rich off the gemstone mines virtually enslaving the population. Western horror at the conditions in the mines resulted in sanctions driving the country further in bankruptcy. Hyperinflation like that in Germany after World War I plagued the country and they even created a one trillion note at one point.
Elections remain largely fraudulent. Disease, mainly AIDS, is rampant and life expectancy is currently 39 years, the lowest in the world.
There are some encouraging signs for the country but the despotic regime continues.
What’s the lesson in all this? If you read my blog frequently you know the answer. Let the best succeed. Reward achievement. If the early white settlers had been fair-minded objectivist instead of vicious racists then blacks might have joined in the economic boom times and the wealth of the country naturally distributed to those most capable. If the blacks who came to power had been fair-minded objectivist they would have rewarded those whites who stayed and worked hard it would have resulted in equitable wealth distribution and a prosperous nation.
Instead, racism, greed, and hate won. That’s what those three things will get you. Disaster. Every time.
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