PUBLIC
WELFARE + PRIVATE GAIN
Adam Smith (the father of
modern economics) in the 17th century stated that we do not get our
daily bread through the kindness of the baker, but rather because the baker
needs to make money. Our own interest in eating bread is satisfied through the
greed or desire of another person. This is a clear paradox. The object of this
piece is to analyse and create a balance between private gain and public
interest. It is important to know that there is no sustainable private gain
without public interest and vice versa as the absence of either will
continually threaten the survival of the other.
Bernard Mandeville in 1705
once claimed that private vices could turn into public benefits. Years later,
the editor of Denmark and Norway’s
Economic Magazine expressed a common reaction to Mandille’s assertion that
public welfare was caused by private vices. In our current reality, these
private vices may be described as economic activities, entrepreneurship,
leadership, knowledge etc. I have always maintained that the spread of private
good is what culminate into real national success. After-all, no nation grows
beyond the quality of the people’s lives and their activities.
In his book titled How Rich
Countries Got Rich …and Why Poor Countries Stay Poor, Erik S. Reinert stated
that the formula for solving this problem and consolidating the theory of
market economy as expressed by Milanese economist Pietro Verri: ‘the private interest of each individual,
when it coincides with the public interests, is always the safest guarantor of
public happiness’. Reinert stated further that the role of the legislator
was seen as creating the policies that made sure that individual interests
coincided with the public ones.
At this juncture, I will like
to do an analysis of the roles of private citizens- individual and corporate
persons on the one hand and the public- the Government on the other hand in
mutual benefit and overall happiness.
Private vices have been
described as economic activities, entrepreneurship, leadership, knowledge etc.
We should know that the spirit of dealing in our ventures which is a reflection
of our values has effect on the general public interest. An American economist
William Baumol once distinguished between productive, unproductive and
destructive entrepreneurship. To the extent that we will agree that entrepreneurship
operates in an environment of competition and profit making, it should never be
at the expense of public good.
In the Law of Contract, there
is what we describe as Consideration which is an essential ingredient of every
contract. Consideration here simply means value which could be money, goods or
services. It is a principle in the law of contract that there must be exchange
of consideration i.e. exchange of value. This consideration ought to be
exchanged with good faith/intention. Scheming to get more than one is giving or
at the expense of any one concerned is a product of bad faith and against
public interest.
On leadership, John C. Maxwell
once said that leadership is more important than the leader. By this, he meant
that the responsibilities and purpose of being a leader is more important than
the leader’s personal gain. Leading in the right spirit of leadership will most
assuredly put an end to corruption. We should also note that leadership is
influence and it is not required that one occupies an office to be a leader.
Apparently, there are people who also influence those occupying offices of
leadership- they are also leaders as we can reasonably agree.
Ha Joon Chang, a South Korean
Development Economist described corruption as a violation of the trust
vested by its stakeholders in the holder of offices in any organisation, be it
a government, a corporation, a trade union or even an NGO (non-governmental
organisation). From this, every leader must live up to the trust vested in
him/her by stakeholders. I love the description as it exposes corruption beyond
government offices.
Knowledge is essential in
public and private good in national development. I have heard of a statement “What
you don’t know can hurt you” just as we know that ignorance of a law is no
excuse from being caught up with it. Ashraf Ghani, a former Finance Minister in
Afghanistan also said at a TED presentation in 2007 on mobilizing capital for
state building that the greatest poverty is
the poverty of knowledge. Take for instance, an entrepreneur may be doing
all to kill competition in his line of business while ignorant of the fact that
the future of the industry is in constructive competition. A knowledgeable
entrepreneur will understand that killing competition is destructive
entrepreneurship, but working more at being the best in the industry in the
midst of competition has overall public interest. Really, the interest of entrepreneurs
should extend beyond self-enrichment to the creation of national wealth and
pride.
A political leader in position
with knowledge will know that it is bad leadership to misappropriate funds
earmarked for healthcare in the state as this will increase death rate, maternal
mortality and infant mortality among others. At the end of his public service,
he might not have amassed wealth meant for public good to his or herself but
he/she would have enhanced a better society, state or nation.
Before I discuss on public
vices for private interest, I should state that when there is a balance in
private gain and public interest, not everyone will be rich to afford all the
luxuries of life but a larger percentage will live comfortably- a decent
apartment, able to afford feeding, afford education, afford healthcare among
others. A lot of the things that appear as luxuries will be common experience. For
example, an average young and employed graduate or entrepreneur being able
drive a brand new Toyota Yaris or Hyundai Accent and living in a decent Mini
flat (at least) will not be luxury (possibly through scheme or so).
Ultimately this will create an
environment that will encourage creativity and innovation for the future
prosperity for the individual and the nation. Ha-Joon Chang in his book Bad
Samaritans: The Guilty Secret of Rich Nations and Threat to Global Prosperity
said- “countries are poor not because their
people are lazy; their people are lazy because they are poor”. There is an undescribable
benefit in a level of comfort in achieving progress.
One the role of the public
vices in private benefits, I earlier made reference to Reinert’s statement that
the role of the legislator was seen as creating the policies that made sure
that individual interests coincided with the public ones. The public vices can
be interpreted as government policies, laws, programmes, development plans.
People of means naturally have
desires for comfort and will do almost anything to achieve this. It is the responsibility
of the government to see to it that these desires for comfort or affluence are
not against public interest. There is also a class of people, who seem quite
helpless on how to achieve comfort for themselves; it is still part of the
duties of the government to achieve public welfare and happiness. So the government
through laws and policies manage public good. The absence of strategic
development plan for economic progress and public interest will create a state
of chaos and perpetual disorganization in the society. Whereas, economic growth is
a major guarantor of political and social stability.
National development as
opposed to private affluence is the real solution to a balanced public welfare
and private vices. This is essentially the responsibility of the government.
The main factor in national development is resources demanding performance
which the government must utilize and manage. Optimal functioning of the
government will create an auspicious and regulated environment for private
good. When an assessment is to be done on a nation’s level of success, it is
the success of the people achieved through the enabling and regulated environment
created by the government that will be the subject of assessment.
In conclusion, the people and
the government should wake up to take responsibility for the good of one
another. This is in view of the fact that there is no sustainable private gain
without public welfare and there is no real public welfare without private
gain. This is the situation in countries known as economic powers- US, China,
U.K., South Korea, Singapore, Japan and others.
Olusola Akinyemi Esq.
President
Joseph Initiative, Lagos.
Tel: +234 80 777 26199
Email: olusola.akins@gmail.com
