Democratic Liberalism In Nigeria And The Tenets Of A New Social Contract

By Chima Iheke

Liberalism has taken a foothold in Nigeria and the embrace of liberal democratic principle as the rubric of a new political, social and economic ideology has been a boon to political participation and wealth creation in the country, albeit with the increasing accumulation of this wealth at the very top.

Be that as it may, (it is an inherent flaw in capitalism that can be addressed and ameliorated through state action) with the tentative steps that Nigeria has taken toward procedural democracy (multiparty elections) with its attendant benefits, it behooves our nation to take the next logical step in substantive democracy (opportunity and economic redistribution) to better secure the benefits of this attendant liberalism.

It is imperative that along with political solvency for the masses, liberal democracy foster economic solvency or else it loses one of its main attractions, the generation of wealth and subsequent rise in the living standard of the masses especially the middle class, who form the bedrock of the whole system.

To that aim, the tenets of the new social contract is the called for, to realign the social, security and economic infrastructure needs of the country. A realignment of the public sector, freeing it from its dependence on existing stakeholders An injection of a new political, economic and judicial vigor, the fostering a conducive environment aided by government action that is geared toward a redistribution of opportunity by creating an enabling environment for the masses.

With the adoption of this ideology, we invariably subscribe to the notion as enunciated by the eminent classical thinks like Mills, Montesquieu and Locke that liberalism and its tenets, the legitimacy of the state derives from the state's ability to protect the individuals rights of its citizens, and that liberalism among other things means a common welfare with constitutional guarantee of a social contract. We may then abominate the structures and ethos that underpin our shaky superstructure which has kept us from reaching our full potential which this ascendant liberalism is attempting to fulfill.

That the hegemony of liberal democratic principle and the atavistic economic growth and social change in Africa is without question, and is testament to its endearing feature. Nigeria having embarked on this path os a debt we all owe to the valiant heroes who fought and gave their lives for the institution of democracy and we owe it to their memory and to posterity to the truly transform Nigeria to the country that they envisioned, by the adoption of the new tenets in our social contract between the government and the citizenry that is germane and apposite to this new ideology. If our leaders will just eschew misoneism and complete the leap, we will get there and get it right.

We should be leery and mindful of those advocating Neoliberalism because we can cull from the experiences attendant in neoliberalism especially as practiced in the United States in the two decades preceding 2008, that for an industrial democratic state anchoring its affairs on the principle of the unrestricted individual enterprise to the exclusion of the state oversight and intervention, is the tantamount to itself destruction. Neither can be unbridled capitalism bring about any sub sequential improvement in the unequal distribution of wealth and welfare.

I will go so far as to say that it is actually a caricature of liberalism to assert that it is violation of the sacred right for the state to intervene to secure the guarantees and the rights of all. They are not mutually exclusive and neither can we allow or make inequality sacrosanct in our society.

Since the adoption and embrace of liberalism calls for the rule of law, the protection of private property, limited government and free commercial transaction and common welfare with constitutional guarantees, it follows that the stability and growth of our institutions including the democratic gains made, private enterprise and wealth accumulation depends to a large extent upon the government taking some bold steps in putting in place policies and structures to meet the needs of this new system.

If we are realistic, we shall recognize, even though it increases the difficulty of our tasks, that there is a great deal in our structure and circumstances of our country that leads straight to poverty. That said, the central dilemma of the present is how to abominate the old principles that we can no longer rely on and embrace the new without bringing down the whole edifice since they are incongruous with the new ideology that is showing so much promise and will be hamstrung if a change is not made. To that effect, a complementary, parallel institutional capital and infrastructure capital, independent of the existing ones needs to be established to absorb the shock and strain that the new system is engendering. As rudimentary as these are, their adoption will chart a path way in securing substantive democracy for our people so that they can participate in the creation and accumulation of secured wealth in the country.

It is always instructive to be mindful what the primary aim of the state is. “The reason why men enter into society is the preservation of their property” writes Locke. The property of the individual is insecure in a state of nature, to avoid this insecurity, “men unite into societies that they may have united strength of the whole society to secure and defend their properties.” When Locke says that the chief end of civil society is “the preservation of property,” he does not refer solely to economic goods, but to all the goods to which he thinks a man has a natural right----- his life, liberty, and estate.”

It follows then that our aim under this new ideology should be to advance political governance in Nigeria to a point where government is a manifestation and an expression of the public interest which under democratic liberalism calls for full participatory substantive democracy which is sorely lacking in Nigeria. This can only be remedied by an engaged governmental action in the facilitating the creation of wealth security and welfare through the adoption of rudimentary tenets of social contract.

In our special circumstance, this should include but not limited to these rudimentary capital investments.

1. Infrastructure Capital: A national public project to pave all the city streets with cobblestones, sewage and Gas lines

2. Public Institutional Capital: New Commercial Law, Judicial system and security of Estate

3. Knowledge Capital: Especially Trade and Vocational Training

First on infrastructure, the ideal will be to macadamize our streets and country roads, but in our particular circumstance, paving our streets with cobblestone will produce the most bang for out effort immediately and in the long run.

Since the Nigerian government is not willing nor is it able to provide this basic capital unaided, I am proposing a solution with the aid of the property owning class whose property value will be enhanced if there is a smooth passable street in front of their property.

My proposal is for the government to grant an imprimatur by the establishment of a parallel agency, a government corporation that can raise funds in the capital market independent of the Ministry of Works, tasked with the construction of city streets and country roads.

To help finance this nation-wide project, every building will be assessed between two hundred thousand to one million Naira depending on the value of the property with a matching fund from the federal government extracted from the states share of the federal allocation to the states.

To guard against fraud, any of the International accounting and consulting firms like Arthur Anderson, KPMG, BDO or a local firm that is already operating in Nigeria can be retained to audit the firm and contractors. In addition, the contractors involved with the project in any capacity will have to be bonded by reputable insurance companies to guard against breach of contract. This time someone will be held accountable. A provision for “Qui Tam Suits” in our legal code (suits brought against government contractors by private individuals) will also help keep fraud in check in the project.

The government can then create a guaranteed loan program to the private sector to build kilns with guaranteed purchase agreement of the bricks by the agency through its local branches. This will allow the private sector to invest in kilns to make bricks since the raw material (laterite clay and shale) is abundant and readily available all over Nigeria.

Pointing out the obvious and pedestrian might sound pedantic but is it worth noting that the employment of the agency of an army of workers in every state for the construction will br enormous and probably run into the millions since the project is labor intensive. It will make a dent in the unemployment in the country with the corresponding economic activity that it will lay sewage and gas lines that id sorely lacking in our cities.

This is something that we can and should do. All that is required is the organizational facility in execution. If the Romans can build the Appian way the cobblestones which is still extant, there is no reason why in the twenty first century we cannot pave all our streets, sidewalks and alley-ways with cobblestones. This will not just enhance the value of our property but will eliminate the dirt and dust that besmirches our whole environment.

I witnessed the rudimentary equipment workers were using to lay cobblestone on a trip to Brazil back in 1991. All they had were ropes, stakes and mallets to pound the stones into place. I watched them , lost in the reverie wondering if the same cannot be replicated across Nigeria since the cobblestones adorned streets all over the world from the rich to poor countries. From Amsterdam in Holland to La-Paz in Bolivia.

This will lead to the valorization of every aspect of the property market. With neighborhoods paved, including alley-ways and side walks, the value of real estate will increase leading to sustainable valorization through government action.

Other private property can be valorized by government action too by designing and assigning titles to private property so that they can be traded when their owners need to. A standardized title for different property will go a long way in freeing up credit locked up in dead capital both in real estate and other durable goods like cars, motorbikes an other assortment household items. It will change the economic culture of burying good money on items once they are purchased with no standardized way of freeing up their value.

If the streets are passable, it will enhance security since the police can better able to respond to calls and maintain constant patrol.

Just the absence of dust, water logged muddy streets will change the whole face of the country and allow us to master out environment and shape it to serve us and not live and work in. I hate to keep sounding like a broken record but the aesthetic benefits will be enormous and the health benefits immeasurable. Just think about the absence of ring around the collar of your shirt. The dusty feet of children and adults, the wear and tear on shoes, vehicles and the ubiquitous open sewage with their mosquito breeding, algae covered stagnant efflugence. We have to do something. Maintaining this status quo is not an option.

This one little act will transform Nigeria beyond measure since there will be an increase in the value of wealth held in real estate.

That the foundation of wealth creation is founded on real estate and well defined property right is well attested to by the Peruvian economist Dr. Hernado de Soto, when he said in his book the “Mystery of Capital,” that the security of private property, including the ability to borrow against land, represents the true “mystery of capital,” the poor in most of the developing world hold their assets, such as housing and land he says----- in defective forms, houses built on land whose ownership rights are not adequately recorded, incorporated business with undefined liability, industries located where financiers and investors cannot see them. Because the right to these possessions are not adequately documented, these assets cannot readily be turned into capital, cannot be traded outside of narrow local circles where people know and trust each other, cannot be used as collateral for loan, and cannot be used to share against investment-----[the poor] have houses but no titles; crops but not deeds, business but not statuses of incorporation. It is the unavailability of this essential representation that explains why people who have adopted every other western invention from the paper clip to the nuclear reactor, have not been able to produce sufficient capital to make their domestic capital work. We can agree with Dr. Soto because his analysis comports with the lived reality in Nigeria. This project will help to disentangle the opaque property rights in the country freeing up dead capital trapped in property.

Just by watching the market and the economy, one soon realizes that the depreciation of collateral value like real estate tend to depress the economy and the enhancement of collateral value like real estate has the opposite effect which becomes self perpetuating since a strong economy tends to enhance the asset values and the income streams that serve to determine credit worthiness. In a nutshell, in order to generate a boom, there has to be an expansion of credit. What better way to do it that through a valorization process by government action.

There might be some naysayers who may complain that this is grandiose on a national level but we should be mindful that Nigeria is approximately but the same size as Texas and Oklahoma combined. Do not tell me that we cannot pave every street, sidewalk, alleyway and country roads in a determined national effort. All that is needed to accomplish this is the political will coupled with the organizational and administrative facility of the agency charged with the task. If a country as poor as Bolivia can do this, I know we can.

The raw materials for the bricks are abundant in every part of Nigeria and two massive kilns in each statue will produce more than enough bricks for the job.

Along with the benefits accruing from the project, the government will have the chance to strengthen the laws that protect the right of private property and the sanctity of contract. This will allow the government to institute a valorization program through the issuance of titles and deeds to real property which a corresponding freeing up of credit once this is put into place. Banks will not be fearful to make loans or extend credit on real property leading to a robust real estate market.

2. Public Institutional Capital: The establishment of parallel Commercial Court independent of the existing Judicial system organized with clearly defined parameters and jurisdiction based on statuses (legislative acts). In short a “Corpus juris civilis” so that the statuses, rather than the courts provide the final answer to any question of the law. Judges may still refer to precedents in making their decisions, but they must base every decision on a particular statue and not on precedent alone.

This should encompass contract and commercial law, dealing with rights and obligation of people who make contracts. Tort law including negligence and product liability suits. Property law, law governing ownership and use of property both rights and obligations, Inheritance law or succession law setting the rules for the making of wills and Corporation law governing formation and operation of business corporation.

A well regulated commercial code that guards against and encourages the system to make effective registration of business, trading property, bidding for contract and defending contract between business and individuals will result in a business friendly environment with clearly defined commercial laws which in turn will free up the bottled up energy in the country among our people and could add one to two percent growth to our GDP not even accounting for the increase in Foreign Direct investment (FDI) that will invariably follow.

Knowledge Capital: A parallel educational system geared toward trade and vocational training and financed through a national lottery program will go a long way in transforming Nigeria. We should be cognizant of the fact that Nigeria has not been built yet and when that building starts, we will need trained electricians, plumbers, Hvac, Masonry ect. Personnel who are certified. You cannot expect to erect standard buildings without trained workers nor can Nigeria take off industrially without trained machinist, Foundry, mold makers, sheet metal workers etc. And these jobs are jobs that trade schools prepare you for.

To create jobs for these graduates, the government can institute and enforce standards in building codes that only certified personnel are licensed to perform.

From this present mercantilist era, Nigeria will invariably move to industrialization and there will be a dearth of qualified workers to man the industries. It is incumbent upon the government to prepare out people for the task ahead or else industries will locate to other areas where there are skilled labor to fill the position.

For industrialization to take hold, (Japan is case in point) trade schools prepare the support structure for industries by training workers. These workers go on to open and operate machine shops that employ from the five to ten people and provide most of the specialized parts that industries need.

For instance, Japan attained rapid industrialization by creating two tiers in their manufacturing process. There is the large firm sector which included such well known companies like Toshiba, Sony and Nissan but another part that drives this large sector is the sector comprising tens of thousands of small factories, a product of vocational and trade school. These graduates run machine shops that make parts or components for the large firms to assemble and produce finished products themselves for the local market and for export. We have all seen machine shops with the lathe and milling machines fabricating components and building engines from scratch. These are the products of trade and vocational schools. There is no reason why we cannot replicate and establish a culture of making things.

We have turned the corner, the trick is to hold forth on this ascendant liberalism and not go backward but to keep inching forward until we get over the hump. Only then will the economy become self-perpetuating like all liberal democracies which are facilitated by the capitalistic socioeconomic structure. Once established, tenets of liberal democracy tend to replicate itself within the system and it is self-sustaining because of the demands and rewards from the people.

We cannot arrive there until we have set up the basic infrastructure on which the superstructure can rest comfortably on. These three rudimentary policies will allow the masses to participate in the substantive aspect of our liberal democratic system. The adoption of these tenets will assure a more equitable distribution of the sacrifices and rewards of society.

We may not subscribe to nor agree with Hegelian Economics but he is right when he says that, “the end of the state is the happiness of the citizens------if all is not well with them, if their subjective aims are not satisfied, if they do not find the state as such is the means to their satisfaction, then footing of the state itself insecure.”

The ball is in our court and we can build a viable society with an enabling environment by the implementation of these tenets. These are the tenets we ought and should have had in place to enable our people participate fully in society.

Participation framed with the full knowledge and assurance that society is working for them and not against them. We should always be mindful that the government is part of the state, the chief institution of civil society or political community and definitely a means for securing the ends for which the state is formed.

By Chima Iheke, PhD.; Arkansas, U.S.A
June 1, 2013

Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not necessarily reflect those of The Nigerian Voice. The Nigerian Voice will not be responsible or liable for any inaccurate or incorrect statements contained in this article."