PUBLIC WELFARE + PRIVATE GAIN

PUBLIC WELFARE + PRIVATE GAIN

Adam Smith (the father of modern economics) in the 17^th 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