Dangoteism : Failure of Social Contract Theory in Nigeria
O meziri nwata mbge nne ya nonso
Nne ya pou
O were mmiri ikwuoka chie nu nwa
O rila mma.
At this time the social contract theory is in an exponentially growing pathway and it is characteristically vast. Embryonic during the Age of Enlightenment, however, the ideology was popularised in the 17th and 18th centuries, advancing strappingly into a leading dogma of political and existential legitimacy. In Thomas Hobbes' reflection on the emergence of social contract, human life, he argued, was in a 'state of nature', referring to the nonexistence of social contract; clearly poor, nasty and brutish. In that state, however, man's freedom to plunder, rape and murder knew no restrictions. Therefore, in the bid to forestall this state of anarchism, men in their own freedom and thoughtfulness, liaised with one another to build a community co-existential within the climate of social order, understanding and culture. The rise of civil society was then premised on man's indispensable demand for survival, safety and co-existence which depended on communal bond within the human society. As a result of that, social contract became the swivel between humanity and sanity, bestowing on human life a reasonable and glossy impression.
Against the backdrop of Allen White's 2007 revision of the concept, social contract theory, that which envelopes the modern legal, socio-ethical and environmental relationships between people, corporations, government and the society, became more ideal than ever. Allenian notion of social contract, concurrent with democracy and the basis of statehood, offers a metonymic description of the concept, evidently focusing on the urgency of corporations to be socially, ecologically, legally and ethically responsible. In the social contract theory, then, corporations are expected to serve as agents of the society. As the writer is indebted to the society; his or her audience, so corporations owe the society their existence in all ramifications.
Across nations, social contracts differ, but they have conspicuously interconnected underpinnings; the society is a baby that must be looked after, and must not be badly treated or left hurting by business operating within its vicinity. The society should not be treated wickedly as in the Igbo folklore chant where the mother leaves the house, and the maid goes ahead to feed the thirsty and crying baby with water that was used to wash hands.
Through cultural and political devices, nations, therefore, are to build and carefully manage their social contract with corporations in the bid to shelter the society from excessive corporate freedom, greed and impunity. The security of the society is as important as the profitability of corporations and indeed more significant because businesses come and go, but societies evolve, therefore require more solicitous care. For example, where is Enron? Where is John Holt in Nigeria? Where are the makers of Malted biscuit?
Today, unlike before, some corporations are mandatorily and consciously becoming concerned with the social contract bestowed on them albeit naturally as they operate in the society. Yet, there remain many big corporations lethargic about social contract theory, under the impression that they are in business for profit and nothing more.
The consumerist, captain of capitalism, Milton Friedman, in his 1962 book Capitalism and Freedom, a classical and definitive speculation of the philosophy that corporations are not obliged to take care of the society as that is the function of government, opened a modern pathway for the roughest debate between corporate objective and social contract theory. Friedman supposed that, 'A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both'. That was a canticle on the inviolability of free-market and capitalism. To drag the temper of the times into the slope of greed lattice and to advocate that extreme and sardonic underlining rationale behind corporate sole focus on profit, Friedman further propagated:
'Well first of all, tell me: Is there some society you know that doesn't run on greed? You think Russia doesn't run on greed? You think China doesn't run on greed? What is greed? Of course, none of us are greedy, it's only the other fellow was greedy. The world runs on individuals pursuing their separate interests. The great achievements of civilisation have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history, are where they have had capitalism and largely free trade'.
'There is one and only one social responsibility -to use its resources and engaging in activities designed to increase its profits as long as stays within the rules of the game, which is to say, engages in free and open competition without deception or fraud'.
Whilst I shall suitably christen that a theoretic anthem for modern free enterprises, Dangote Group an example, in their greed and antagonistic pursuit of wealth, I will not hesitate to state that Friedman should not have beatified corporate greed on the grounds that several nations indulge in it, he should have curtailed his economic animalism by looking through the socially sensitive discussions that preceded his birth into economics, such as Adolf Berle and Gardiner Means' 1932 work 'In The Modern Corporation and Private Property'. In the book, they argued that the concentration of economic power brought about by the rise of Big Corporations, which insulates the Big Corporations from public scrutiny must be curtailed. They advocated accountability, transparency, and the cautious management of pecuniary interests in the corporations, while reminiscing on Adam Smith's age-long request for the corporations to be managed so as not to become free to the extent that they could be at daggers drawn with states, or allowed to constitute an economic statesmanship to the detriment of the society or even the shareholders. Today, the prognostications have come to pass, some Big Corporations are richer than their states, and indeed maintain strong hold on political decisions to the level that their focus on profit and not on the society, wreak havoc on any imaginings of sustainable development. They exactly do the bidding of Milton Friedman-make the money and damn the monks and their morality.
In 1938, Chester Barnard's The Functions of the Executive, in page 282 proposed: 'Organisations endure, however, in proportion to the breadth of the morality by which they are governed. Thus the endurance of organisation depends upon the quality of leadership; and that quality derives from the breadth of morality upon which it rests'. In contrast to Friedman, Barnard focused on a higher corporate objective which rather points towards social, moral and non-personal motives, and never considered Milton Friedman's notion of profit and the attendant generic greed. The idea of corporate morality is a definitive rendition at the crux of the social contract theory.
In vigorous continuation from where Adolf Berle and Gardiner Means, and Chester Barnard stopped, Howard Bowen in 1953, published Social Responsibility of a Businessman, which set the ball of corporate social responsibility literature rolling. His landmark thesis which did not consider business women in context, given that at that time women were not that considered in business literature, tried to disperse the ruggedness of power concentration on corporations and the corporations' attendant refutation, in their activities, of the need for social good, moral commerce and environmental sustainability.
This led to Edward Freeman's 1984 thesis Strategic Management : A Stakeholder Approach, which propagated immeasurably the social contract argument maintaining that corporations do not have to maximise profit for shareholders alone - there must be consideration of the broader social contract agencies such as the community, the customer, the political groups, trade associations, employees, suppliers, and governmental bodies. Without considering the stakeholders, corporations become myopic and thus malevolent to the humanity they are meant to serve, and harmful to the environment wherein they operate.
The idea of social contract is that corporations have huge impact on the society; therefore they are obligated to ensure that their business is sustainable so as to keep the society, the environment and people safe and sound. Any attempt to ignore the fundamental nature of corporate power and its ability to annihilate the social good of other stakeholders, quite apart from shareholders, could be detrimental. Currently, MTN the topmost Nigeria's telecommunication provider and some other telecommunication providers have been banned by the country's National Communication Commission (NCC) in the need to restore sanity in their socially brutal activities.
Take a gaze at Dangote's hegemony in the orchard of Nigeria's capitalism. From retail, manufacturing, stock market, banking, to energy, the corporation is big and baboonish. Something is contractually erroneous with the corporation's superseding monopolistic muscle characteristic of avarice. Even Enron's scandal-an American blush of greed as reiterated and propagated by Milton Friedman-underhandedly caused much harm to the society and the global village it served. A harm caused by Big Corporations' coarse possession of power and insane focus on profit, which is a violation of the Iron Law of Responsibility-an apparent derivative of the social contract theory.
Keith Davis and Robert Blomstrom in a 1975 book, Business and Society: Environment and Responsibility, argued that the Iron Law of Responsibility portends that "in the long run, those who do not use power in a manner which society considers responsible will tend to lose it". Iron Law of Responsibility reiterates the indispensability of corporations in the social contract argument. Big organisations like Dangote Group cannot hide from the world's business stage. Dangote Group cannot hide in Africa at all. Whatever they do with their policies and powers can make or mar the sustainability of the community where they trade. If they refuse to supply Indomie, cement or sugar, Nigeria would be in trouble. Consequent upon their relevance in the country's economy, if they recognise social contract systematically and play by the rules the better for their business and the society. While the likes of Carnegie, Rockefeller, Gates, and Ford have endeavoured to adopt corporate philanthropy, due to the pressure by the theorists of social contract, to cover up their failure to maintain the social contract abiding concepts, they, like Dangote, still clearly forestall the greed supported by Milton Friedman, especially in their blue chip corporations.
Multinational corporations or blue chip organisations operate in several nations. Corporations or companies in this category are Apple, Chevron, Tesco, Walmart, BP, Exxon Mobil, Dangote Group, and GlaxoSmithKline. There are several multinational Corporations that are not mentioned, however, the point remains that the dictates of the Social Contract theory impinge on all of them in significant ways.
Critically, organisations that violate the social contract theory do so at the peril of the society, and thus their business. Exxon Mobil, for example, has been alleged to sponsor studies that argue that climate change is not realistic. Climate change as a matter of fact derives from the need to curtail the use of energy in the planet due to the changes in the environment. Denying that heat waves, extreme weather conditions and environmental disaster do have direct exchange with the activities of corporations is a deception of colossal proportions. Whereas Dangote Group has not been noted to sponsor such studies, it has not sponsored any glaring research to boost climate change initiative in Nigeria. It is the responsibility of corporations in the society to offer ways of using the resources in the environment; it is their obligation to manage the resources they use in other not to cause any damage to the environment or to the planet that is vastly changing due to corporate abuse of energy and natural resources.
Firms such as Dangote Group and MTN have little interest in corporate social responsibility and by that violate the Iron Law of Responsibility and their social contract in Nigeria. The vehicles they use, the factories they build, and for the people they employ, they have shown that they think less of the need for hybridised machinery, solar/hydro energy, and ethical human capital. The profit maximisation objective is their interest- make the money and damn the monks and their morality. This implies that the common good of the society is not part of their corporate objective. Is this not an intentional repudiation of the social contract theory that will give further opportunity for the rise of shameful socioeconomic consequences in Nigeria?
By Dangoteism, a livid theory for that matter, I refer to the break of social contract by the Nigerian government, in the continuous use of Aliko Dangote in the running and ruining of our society's commerce without considering the social contract theory. The excessive believe in Dangote as the nub of government contracts and business development is economically dangerous. From Late Sanni Abacha, Olusegun Obasanjo to Goodluck Jonathan, all of them political leaders of Nigeria, the rise of Aliko Dangote in time as the government's economic stooge, repeats history, and has become a source of progressivist gloom for the nation's upcoming entrepreneur class. Should Nigerians fold their hands and watch one man become the only resounding corporate billionaire in Nigeria and Africa?
Government, through the mal-use of power can also break the social contract. They can do this to the detriment of other businesses and the dispersal upsurge of wealth creation in a country. For instance, America has hundreds of billionaires, China, India, Mexico, and Brazil have many corporate billionaires, due to the dispersal of power and the imposition of balance in the social contract, but we have just one outstanding corporate billionaire whose irresponsible deals ruin our communities' future in the corporate sector. Dangoteism, this political alliance with Dangote is ruining our entrepreneurial economy and the sustainability of our society is losing its progress rapidly.
Dangoteism, the worship and refusal to monitor Dangote's economic greed, an economic form of gangsterism, plunges the entire nation's economic relic into a pessimistic tributary, reeking of exploitation and pain. The corrosive socioeconomic inequalities it breeds; the persistent notion of progress in Nigeria's freemarket history belittled; military barbarism repeated in an economic carnage-
in Dangoteism, the past and the future oscillate between political tyranny and capital schizophrenia, one sees an intermingling of social decay in a curious cosmic melange of one man's Babylonian affluence and a great population of extremely pitiable populace.
Aliko Dangote became the 25th richest man in the world in 2013. His organisation, Dangote Group, was founded in 1977; today it is a multi-trillion naira multinational operating in Togo, Ghana, Benin and Nigeria. Fortune rises by minute in his organisation especially the cement, sugar and flour businesses. Kunle Aderinokun, in a 2013 report, stated that 'With a current market capitalisation of $20.5 billion, Dangote Cement has also become the first Nigerian company to achieve a market capitalisation of over $20 billion. With his fortune, Dangote is richer than Russia's richest man, Alisher Usmanov, richer than India's Lakshmi Mittal and running neck and neck with India's Mukesh Ambani.' This is negative and positive for Nigeria.
Aliko Dangote offers us products that in some sense lack ethical standardisation. Indomie noodles are scientifically proven to be damaging to health. His cement made from Nigeria's natural resource is expensive and its price fluctuates as if prices of the natural resource (lime stone) are so unstable, which has never been the case. His Lorries, due to bad technology and employees, kill people on our roads monthly. His alliance with fraudulent government which is the crux of the matter in view is gigantically unethical. Dangote has however, on a positive note, helped notify the world that Nigeria is a business hub. Thanks to the country's inclusion in MINT.
In a nutshell, unethical products, expensive products, unethical employees, environmental hazards, and political fraud are clear signs of failure in a social contract between the society and a corporation. Those must be reevaluated. Dangote Group must do all it can to improve on its social image by improving its human resource to ensure the people employed understand their responsibility to the communities where they trade. The organisation must endeavour to work on its pricing and product development framework. The idea that the organisation is venturing into oil is commendable. However, the corporation's entrance into the oil sector should never increase price of petroleum products, or lead to domination as the organisation has done through its government contact in almost all the products value chain it has ventured into. Dangote Group has been known to adopt monopoly as its corporate strategy. All it targets is profit, profit, profit. Forbes in 2013 reported that Dangote's 93 per cent stake in the cement company is now worth $19.5 billion. This is a confirmation of the corporation's profitability.
Dangote, who hails from Kano State, a Northern state in Nigeria, studied at the Al-Azhar University, Cairo. His unfussiness and political connections create a startling contradiction. He is the simple and reserved kind of guy. He just joined the social media fun -Twitter and Facebook, in 2014. Yet, he was alleged to have funded Nigeria's former president Olusegun Obasanjo's re-election in 2003. He contributed N200 million to the popular Presidential Library in Nigeria owing to his alliance with Obasanjo. He has mega stakes in UBA Group, Zenith Bank, and Dangote Flour Plc. Although his personal net worth exceeds $20 billion, his extensive real estate portfolio, yachts and jets make him dazzlingly bourgeoisie. Little wonder he was awarded second highest honour, Grand Commander of the Order of the Niger (GCON) by the President of Nigeria, Goodluck Jonathan in 2011, a symbol of his uninterrupted political alliance. In 2013 he grabbed the license from the present government to build a refinery, a product of political connection, which has been denied many. Just one man rising, should I say 'trillionically', in a nation of 170 million people.
Will Dangote continue to rise? Why is Dangote Group the only corporation rising to global recognition in a population of 170 million or more? Why is there no power balance in Nigeria's capitalism? Why is Dangote Group allowed to function in the same way as Walmart and Tesco?
What has Dangote Group done for the victims of Boko Haram that have been consumers of Indomie Noodles, Dangote Cement, Dangote Flour and Dangote Sugar etc etc? In a social contract scenario, the parties must consider each other in crucial times. Not just to do charitable giving, Dangote Group must enhance the standard of living of people by offering healthy, well-priced and essential products and services to the communities. Special scholarship programs for women comes to mind especially on an International Woman's remembrance period such as this; scholarships that will offer training and international experiences to women leading to their employment in specific businesses owned by the Dangote Group, and thus Dangote Group can leverage on this to promulgate a new corporate image. Dangote Foundation must clearly work on improving the lives of the less privileged children, the handicapped, and other groups could be trained or sent to school on scholarship so as to reduce the recruitment of the poor into terrorism, or better still to enhance social development. Shell Petroleum Development Company , Nigeria (SPDC) has done same for the militants and many residents in the Niger Delta. This is in Shell's consideration of the urgency on the improvement of social contract in Nigeria.
Also Dangote Group while ensuring they make profit as a corporation must ensure they secure the environment which is a crucial aspect of the social contract theory. This is because not being profitable is also failure to the social contract. While Dangote Group has been profitable as it stands now, they have not invested on the environment or the climate change agenda. Which of Dangote's factories can boast of using solar and biofuelled vehicles in the past 5 years? Yet, with power in its lap, the organisation has grown wealth like flour which it makes. Greed. The organisation is not socioecologically friendly!
The social contract theory asserts that power must be balanced. Never in the history of corporations has corporate powers been under pressure to balance by offering some of its profit for environmental development, either through their operational efficiency, ethical deals, accountability, or through strategic investment in green products, so as to offer room for sustainability - socioeconomic emancipation, environmental health and growth of the society as they make profit.
In 2002, during the dot-com crisis, the collapse of Enron and World Com exemplified how in every decade organisations have abused the social contract as well as power bequeathed to them. The aforementioned firms amassed wealth without accountability and operational efficiency, and practically met with doom in the end. Nobody prays for Dangote Group to collapse, however, its hegemony which crushes the health of the environment and the growth of upcoming businesses, by holding unto retail power and neglecting the social contract in Nigeria could have a catastrophic end.
You may ask, how is Dangote Group destroying the environment? The Heavy Duty vehicles that spread fumes across Nigeria can cause more diseases that you may not clearly point to. They have profit enough to invest in green technology that do not pollute the environment.
Extreme capitalist ideologies hold out that the business of business is business. This seriously does not allow the Iron law of Responsibility or the social contract theory to take effect. In 2001, the Federal Trade Commission in US investigated big pharmaceutical firms that blocked smaller firms from trading generic drugs. This clarifies how power of size can be used to obstruct the balance of trade and growth in business. Can Nigeria's government call Dangote to order? The Iron Law of Responsibility is not observed seriously by most organisations in Nigeria, which Dangote Group is a case in point, however, through lawsuits and campaigns by pressure groups-most especially women pressure groups- women, because they are the worst victims of corporate impunity and irresponsibility, the likes of Dangote Group could be brushed into the exigency and reality of social contract theory whether there is somebody watching them or not.
Nuria nu na echi gara aga bu 'International Women's Day' 2014!