Sunday, November 4, 2007

No Knowledge No Market Participation

No Knowledge No Market Participation

It is knowledge that creates goods. It can never be stressed that knowledge is the primary commodity. Knowledge is what allows us to identify other commodities, those other materials become commodities because they can be used creatively by a society.

Recently there has been much talk of less developed countries of being failed by the market. Countries will adopt policies that theoretically are market friendly but somehow the growth that was anticipated never occurs. This gives ammunition to those who do not understand economics, and immediately there are cries and shouts look the market has failed. Note that most of these cries come from people who reside in countries where the benefits of the market are seen everywhere, they reside in North America, Western Europe and many in Australasia. These are agitators remnants of an ideology that failed to deliver for the USSR and China, an ideology that only delivered military technology, brutality and empty supermarket shelves.

No the market has not failed, it has not failed because a key ingredient was missing, that key ingredient is/ was knowledge. Less developed countries have nothing to bring to the market. What they have brought to the market is what is provided by nature, raw commodities, iron ore, oil, cocoa, gold, copper, platinum, all things provided by nature. They have not added any value to these commodities, they have not, they lack the knowledge to create goods with these commodities. They do lack the knowledge, their engineers produce no machines, no electronic products either for themselves let alone export.

The market has not failed, to participate in the market one must bring something to the market. Less developed countries have nothing to bring to the market, it is not that the market has failed. If less developed countries had know how, why, they would make electronic goods to bring to the market, maybe tools, machines, ball bearings, printers, nails, no the knowledge in most cases does not exist. It is not the markets that have failed, it is the leadership of those countries that have failed to create and understand the importance of knowledge, to use the materials of the earth to create goods. A machine after all started of as iron ore, and finally an engineer creates a machine, a car, or parts.

With respecting knowledge these less developed countries will be able to create goods, but knowledge must be respected. The leaders of these countries in most instances do not believe in their own people, in trying to please donor nations they just teach their people, and encourage their citizens to merely regurgitate what the donor nations advise, because they fear if the do not regurgitate these advisors donor funding will not come. Now these donor countries do not talk of knowledge, they talk merely of opening up the market for goods and services from the donor nations, however this is in the long run is harmful to the globe, if donor countries really cared they would encourage knowledge production, there is nothing to fear, if the less developed countries become rich, it follows that the donor nations will have bigger markets, and all societies in the long run will be net gainers. It is dependence on donations that has put ‘pragmatism’ into the less developed countries, they fear that if they do not regurgitate the advise from rich societies they will get no way and their source of government expenditure will dry up.

These donors who want regurgitation are not friends of less developed countries or humanity at the least, there is good literature available from organizations that encourage the rights of the individual, because to merely regurgitate means one is not an individual but a clone, there are proper think tanks out there that encourage freedom, without freedom knowledge can not be turned into productive means, it remains theoretical, and unfortunately for remnants of communism most of these organizations happen to be associated with center right policies.

Without knowledge there is no participation in the market.

Bhekuzulu Khumalo


Mahadi said...

Botswana is currently the worlds 1st largest producer of diamonds, both by volume (mass in carats) and in terms of value of production. It is a country that produces the world’s highest quality diamonds. Diamonds in Botswana are a major foreign exchange earner and play a significant role in the socio-economic development of this nation. Botswana is dependent on diamonds. Diamonds were discovered for the first time in this country soon after independence. Ever since the discovery, this nation has never found any other significant economic activities. In 20 years from now, Botswana will run out of diamonds and the leaders in this country have a challenge to diversify the economy to sustain the country’s existence beyond the mining of diamonds. It is imperative for Botswana to start seeing themselves as price makers instead of price takers in the future. At this present moment, one of the biggest problems in Botswana is high unemployment amongst high educated recent university graduates. It would seem then that the education system does not train according to the needs of the market. Perhaps the training institutions in this country should start thinking about matching the needs of the economy with the type of training they offer the nation to ensure significant training around value addition or beneficiation of raw materials. It would be good to see Botswana get further and further beyond mining and more and more into the entire diamond value chain. Very soon in the future, De Beers will be moving the centre of gravity of diamond sorting from London to Gaborone in Botswana. This will be an impetus for Botswana’s move along this road of creating a very strong diamond industry rather than merely a strong diamond-mining industry. I hope for the sake of the citizens of this country and for the development of the African continent as a whole that there is a progressive and forward thinking leadership in Botswana that will capitalise on such opportunities and take full advantage of such.

Mahadi Ntoampe

KnowledgeCenter said...

I agree with you 100%. All these countries are changing their attitudes because of the BEE that took place in South Africa.Mugabe is trying to emulate Mbeki, and Botswana is being encouraged to move to become the center of gravity in sorting out diamonds.



Blog Archive

Bhekuzulu Khumalo

I write about knowledge economics, information, liberty, and freedom