The ageold sharing economies of Africa and why we should scale them Robert Neuwirth
So what I’m doing
is a thought experiment.
Now you may know of or have read
this book by this guy.
It’s probably the first
and maybe the only bestseller
ever written about economics.
And you probably know a bit
about what it says.
It talks about how nations
all over the world will prosper
through the individual pursuit
of individual profit.
Individual profit will be the mechanism
for the prosperity of the world.
But the funny thing about Adam Smith
is that he was a stay-at-home kind of guy.
He actually never went
further from Edinburgh
than France and Switzerland.
So my thought experiment is to imagine
what would have happened
if Adam Smith had visited Africa.
And fortunately, there’s
actually an easy answer,
because the Arab lawyer
and traveler Ibn Battuta
traveled down the east coast
of Africa in the 14th century,
and what he found when he got
to Mogadishu was a market,
and he wrote about it.
And basically, merchant ships
came to the harbor,
and they weren’t even allowed to land.
They had to drop anchor in the harbor,
and boats came out to them,
and locals picked them and said,
“You are my guest, I am now your broker.”
And they had to do business
through the local broker,
and if they went around that
and didn’t do business through the broker,
they could go to court,
and the deal would be canceled,
and they would be thrown out of town.
And through this mechanism,
everyone prospered.
And so if that was Adam Smith,
he might look like this guy
and say, “Ah! That’s a mutual aid society.
That’s a share-the-wealth free market.”
And when I put this question
to Christian [Benimana],
who had the stage
at the beginning of this session,
he responded that if Adam Smith
had come to Africa,
there would have been a sharing economy
long before Airbnb and Uber.
And that’s true.
So if we put this to work today,
it would be very interesting.
There would be a lot of money
flowing into the countries.
These are just figures of 10 percent
of exports in these countries.
So the interesting thing is that
this mutual aid economy still exists,
and we can find examples of it
in the strangest places.
So, this is Alaba International Market.
It’s the largest
electronics market in West Africa.
It’s 10,000 merchants,
they do about four billion dollars
of turnover every year.
And they say they are
ardent apostles of Adam Smith:
competition is great,
we’re all in it individually,
government doesn’t help us.
But the interesting reality is
that when I asked further,
that’s not what grew the market at all.
There’s a behind-the-scenes principle
that enables this market to grow.
And they do claim – you know,
this is an interesting juxtaposition
of the King James Bible
and “How To Sell Yourself.”
That’s what they say is their message.
But in reality, this market
is governed by a sharing principle.
Every merchant, when you ask them,
“How did you get started in global trade?”
they say, “Well, when
my master settled me.”
And when I finally got it into my head
to ask, “What is this ‘settling?'”
it turns out that when you’ve
done your apprenticeship
with someone you work for,
they are required – required –
to set you up in business.
That means paying your rent
for two or three years
and giving you a cash infusion
so you can go out in the world
and start trading.
That’s locally generated
venture capital. Right?
And I can say with almost certainty
that the Igbo apprenticeship system
that governs Alaba International Market
is the largest business incubator
platform in the world.
And there are other sharing
economies that we look for –
merry-go-rounds, which are found
in almost every shantytown.
They have different names in
other cultures; this is the Kenyan name.
It’s a way of generating cash.
It’s a kitty – people throw money
into a pot once a week,
and once a week, one member
of the group gets the money,
and they can spend it on
whatever they need to.
And there’s also something
called “acequias,”
and that is a Spanish word, but it
comes from the North African Arabic;
“saqiya” means “water wheel.”
And what the acequia is
is a sharing system for scarce water.
It’s migrated from North Africa to Spain,
and from Spain to the west
of the United States,
where it still is used.
And it shares water by need
rather than by who was there first.
And contrary, with all due respect,
to what Llew [Claasen] said
when he talked about blockchains
and cryptocurrencies yesterday,
there is no tragedy of the commons.
People in acequias have been
commonly managing scarce water resources
for hundreds and hundreds
and hundreds of years.
So taking this thought experiment,
I wanted to go a little bit further
and suggest that these things
are managed communally,
and they are taking care of
scarce capital, scarce cash
and scarce resources.
And it seems to me that we have
actually two kinds of capitalism.
We have the capitalism of the top up.
And these are really
interesting statistics,
because three one-thousandths
of one percent of the Nigerian population
controls wealth equal to one-fourth
of the GDP of the country.
One one-hundredth of one percent
of the Kenyan population
controls wealth equal to 75 percent
of the GDP of the country.
That’s the capitalism of top up.
And everyone else is with this guy,
selling board games
and bodybuilding equipment
in a go-slow on the highway in Lagos.
And when you’re selling board games
and bodybuilding equipment in a go-slow,
that traffic jam is really,
really, really bad, right?
Those of us in this sphere of the economy
are caught in what I call
“the capitalism of decay,”
because there’s no way
to rise up and get out of it,
because they’re lacking the resources
that we talked about
in those sharing economies.
And they’re tripped up
by the thesis of cassava and capitalism,
that cassava has to be processed
in order not to be poisonous,
and I would argue that, similarly,
the market economy needs to be processed
in order to be fair to everyone.
So we have to look at what I call
the “bottom down economy.”
These are these sharing models
that exist out there
that need to be propagated
and used and scaled.
OK?
And if we propagate these things,
we can begin to bring
infrastructure to everyone,
and that will ensure that communities
are leading their own development,
which is, I believe, what
we need in the world,
and, I would suggest,
what we need in Africa.
I wanted to quote Steve Biko,
and I thought it was really
important to quote Steve Biko,
because next month,
September 12 to be exact,
is the 40th anniversary of his murder
by the South African state.
And you can read the quote.
He basically said that
we’re not here to compete.
And I love this quote: “… to make us
a community of brothers and sisters
jointly involved in the quest
for a composite answer
to the varied problems of life.”
And he also said that
“the great powers of the world
have done wonders in giving us
an industrial and military look, …”
and we don’t have to copy
that military-industrialist complex,
because Africa can do things differently
and restore the humanity of the world.
And so what I want to suggest here
is that we have an opportunity,
that we are all here
in the mutual landscape
to be able to do things,
and that the journey starts now.
Thank you very much.
(Applause)