20 Apr They are Deceiving Us: Economic Growth, Ideology and Africa
In a recent Debate piece, published in our journal and available to roape.net readers here, Franklin Obeng-Odoom looks at the debates on growth in Africa. He argues that most of the models in economics were formulated based on experiences outside Africa, raising questions about their relevance to the continent where conditions are markedly different to those inspiring these models. For too long growth has not been seen for what it is: an ideology invented to defend capitalism. In this blog based on his longer Debate article, Obeng-Odoom looks at the consequences for Africa of this deception.
By Franklin Obeng-Odoom
Growth is an ideology invented, among others, to make certain nations appear stronger than others. With the identity of nations tied to it and the very survival of capitalism dependent on it, growth is defended and promoted even at the expense of human life and the destruction of our planet. Neoclassical economics, in particular, is its chief intellectual toolbox. It justifies growth in whichever way it can – from offering unconvincing explanations for biodiversity loss through providing misleading analyses of global inequalities and development, to promoting a particular form of urban development that is centrally about property-based growth rather than orientated to people or planet. With a devoted group of economists as its chief advocate, ‘growthism’ has found much support in Donald Trump’s America and in recent discussion about Africa, often centred on the idea that ‘Africa is on the rise’.
Africa: Why Economists Get it Wrong
In Africa: Why Economists Get it Wrong, Morten Jerven demonstrates concretely that economists are entirely mistaken in their analyses of what is happening in Africa. Not only is their statistical information contrived, but also their description is wrong, their explanation is worse, and their policy advice is grotesquely awry.
For Jerven, economists get Africa wrong because, although they pick ideas from history, they cherry-pick this narrative and as a consequence do not really understand the totality of history. They seek, instead, to use shortcuts to become African experts and depend on downloaded data sets often without knowing either the contexts within which the data was generated or the processes that are captured in the data. Relying on unreliable data, the models pushed by these so-called experts are also ahistorical. They ignore detailed, long-term studies ask the wrong questions and, as a result, they are unable to accurately interpret economic phenomena. Even worse, these problems cannot be remedied because they are structural to the field: unless economists are prepared to abandon years of perfecting a flawed approach, the problems can only get worse.
Indeed, for Jerven, addressing the problem is only possible if the ‘grand question’ asked about Africa changes. The question needs to be reformulated from why Africa has not grown/has grown slowly, to how Africa grows and why Africa first grew, declined, and has regained growth. This reframing has two advantages: it gets the history right but also leads to a focus on the correct contemporary policy issues. So, Jerven argues, the focus for this new approach should be that Africa as a continent has experienced recurrent growth, not newly occurring growth.
For non-economists, this book gives the reader confidence to judge economists; question their assumptions, their evidence, their interpretations, and allows them to ascertain the plausibility of their ‘technical’ economic advice. Economists too will gain from reading this book, especially if they take the author’s advice seriously: ‘a bit more humility among …economists would be useful; in particular, a better understanding of the limits of their own data sets and statistical testing is needed’.
Political economists may well say, ‘we told you so,’ however, they will cringe at the near total absence of ‘the political economy of growth’ in the book. The book gives little attention to whether social progress is, in fact, accurately measured by GDP. For example in what ways GDP actually leads to a devaluation of labour in the huge informal economies in Africa, or the widespread existence of social enterprises whose activities are devalued by a ‘growth’ measure, and the direct link between GDP addiction and the brazen destruction of natural resources in Africa.
More profoundly, the book overlooks the invention of GDP as a springboard to enhance the power of Western countries and to force Africa to open its doors to plunder by transnational corporations. This ‘imperialist’ element to the promotion of ‘growthmania’ was an idea developed at length in E. J. Mishan’s classic 1967 book, The Costs of Economic Growth. In addition there is little discussion of growing inequality in Africa and much less discussion of inequality between Africa and the global economy as a whole. Indeed, even within Jerven’s own, narrow framework of technical, data-based analysis of GDP, neither the stagnant contribution of Africa to global GDP nor its implications for society, economy and environment are analysed.
In fact, the real history of GDP says something completely different. There is nothing African about the manipulation of GDP. This political statistic has always been manipulated to win wars, to maintain imperial power, to include and exclude countries from powerful clubs and to distract attention from pressing issues that confront power structures, as Lorenzo Fioramonti discusses in his 2015 book Gross Domestic Problem.
In contrast Jerven seeks a paradigmatic change on the basis that better quality technical power and numbers alone can save economics. The evidence, however, shows that growth – indeed the entire economics establishment – owes its success not to its superiority of ideas or methodology at all. Economics has attained its imperial status not because of strong and rigorous methodology or even its better use of data, but, largely, because it serves an ideological role. It is this ideology that sustains the position of ‘economic science’. As Michel De Vroey famously noted in 1975 ‘in a class society, the ruling class cannot be indifferent to the type of social science developing in the society in which it holds power.’ More recently, John Weeks in his 2014 book, The Economics of the 1% emphasises the materialist nature of measurement and economics.
Conclusion: Get Reading
Jerven’s study, its technical detail, its forthright critique of the flaws of GDP measurement is brilliant, but technical acuteness cannot be fully understood without an analysis of the political economy of measurement or of ideas more generally. Therefore, my recommendation to readers is to immediately get a copy of Jerven’s vital work, study it, but then to read recent books, especially Lorenzo Fioramonti’s, to better contextualise the ‘world’s most powerful number’, and seriously ponder the ecological limits to growth.
Franklin Obeng-Odoom is a Fellow of the Ghana Academy of Arts and Sciences. His books include Oiling the Urban Economy: Land, Labour, Capital, and the State in Sekondi-Takoradi, Ghana and Reconstructing Urban Economics: Towards a Political Economy of the Built Environment. Franklin is based at the University of Technology Sydney, School of Built Environment, Australia (Franklin.Obeng-Odoom@uts.edu.au).
Featured Photograph: Former US Secretary of State Hillary Clinton delivers opening remarks at the 2012 African Growth and Opportunity Act (AGOA) Forum to mark Global Economic Statecraft Day at the U.S. Department of State in Washington on June 14, 2012.